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In the past two weeks you’ve heard a lot about the citrus industry on this newscast. The story so far has focused on the two principal rival groups: the Citrus Growers Association on one side and the Executive Management of Citrus Products of Belize Limited on the other. But one group we have not heard from is Banks Holdings Limited. That’s the Barbadian Beverage Giant that bought 47% of CPBL in late 2006. Well, tonight we will.

But first, some background. Banks is the other major shareholder that shares control the board of directors. As we’ve reported, the control of the board is in dispute because CGA which owns controlling interests of 51% says their directors have abandoned the association and will no longer act in its interests. They have been trying unsuccessfully to remove these directors, namely Chairman Michael Duncker, Frank Redmond and Henry Canton.

It is a matter that is before the courts – but until CGA gets the control that it claims is rightfully theirs – they will not be able to direct the board as they wish. And as Principal shareholder their wish is that the company continues to pay dividends – even in a period like last year when they lost money. In that case, the Growers Association’s leadership argues, those dividends should come from the retained earnings. And that’s because the CGA has debt obligations to meet – and they claim if they don’t they could lose their controlling interest. We’ve seen documentary evidence which suggests it is not that clear-cut – but that’s another story.

Tonight the story is that two senior executives from Banks Holdings, CEO Richard Cozier and Chairman Sir Allan Fields called us from their Barbados Corporate Headquarters to weigh in on the dispute. They say that while the Citrus Growers Association complains that it has not received dividends this year, they got four million dollars worth in years past – while Banks which invested $26 million has only gotten two million and they aren’t complaining.

Richard Cozier, CEO – Banks Holding
“Denzil Jenkins has mentioned they haven’t received dividends but in fact since our involvement they’ve received $4 million in dividends and Banks Holdings has received just under $2 million. The other thing you have to bear in mind is that unlike the other shareholders, we are the only shareholder who is not a farmer. So the only revenue we get for our investment is in the revenue from dividends and over the three years that we’ve held our shares we’ve only received $2 million which if you look at the size of the investment is a very low return on the investment. We are not in it for the short term, we are in it for the long haul and we believe that there is profitability in the industry going forward.”

Chairman Sir Allan Fields,
“You might want to ask Mr. Jenkins and his people what did they do with the $4 million they got over the last two years. Did they pay the European loan? What did they use the $4 million for?”

Jules Vasquez,
“CGA’s central assertion as the majority shareholder, it should in fact have control of the affairs of CPBL and if it needs a dividend that then should be paid as is allowed by the articles out of retained earnings.”

Richard Cozier,
“The agreement signed by the members of the CGA and the members of Banks Holdings clearly stipulate that for any resolution to pass at the board level, they have to have the support of two Bank directors, that is the first thing. That is embodied in the agreement which CGA signed their names to. The other thing is it’s all very well to talk about paying dividends out of retained earnings. Legally yes you can but CPBL has borrowed a lot of money to get involved in these new projects for the feed mill and the plant.

Now CPBL Board has not met yet to discuss paying a dividend or not but certainly we would want to take into consideration the money that CPBL needs over the next year and also where the cash would come from to pay a dividend if indeed a dividend is voted on. But to say we are not paying a dividend, they are second guessing. They still have no input in the company and yet they are seem to say we are not paying a dividend until 2013; this is Mr. Jenkins’ words. No discussion has taken place about paying a dividend in 2010, 2011, 2012, or 2013.”

And the subtext to all this back and forth about dividends is the control of the board of directors. After all, it is that body which decides whether dividends will be paid. The CGA has said it wants Duncker, Canton and Redmond removed. Banks which has a veto vote has counter-proposed that the board be reconstituted in a way that would preserve CGA’s majority while ensuring that CEO Hendy Canton stays on. That’s because as far as the Banks group is concerned his involvement is essential - and any desire on the CGA’s part to remove him is petty and counter-productive.

Richard Cozier,
“In addition to that Mr. Vasquez, let me add that we believe that Henry Canton is the correct person to be leading this company at this time. As you know in Belize like most of the Caribbean the talent pool is very small and he is doing a commendable job and we are concerned about losing his services. We would not have had a problem with the other two. We would not have been able to support the removal of Dr. Canton but the others we would have had no difficulty with, it came as a package.

You see Mr. Vasquez we can’t understand at this distance what is the resistance to increasing the board and having that additional seat be wholly and solely granted to the ICL, the majority shareholder. It would satisfy the five seats, we would have our four, and the CEO as part of his contract would remain on the board.

The only difference between our proposal and their proposal is that Dr. Canton stays on and therefore it seems to us the issue revolves around Dr. Canton. It should not revolve around personalities, it should revolve around what’s best for the company.

We had hoped, we still hope, even at this hour, if we can get an agreement to increase the board and have the additional board member be appointed by CGA, whoever they want, that we can go further and the industry can recover from this problem.”

They state that it is in the investment agreement that the Canton and other key senior managers would stay around for 5 years after Banks bought into the company in 2005. Banks has investments in the Bahamas and Guyana but at 26 million dollars the CPBL investment is their largest external holding.