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| Robert L. Bradshaw Social Security Headquaters |
BASSETERRE, ST. KITTS, SEPTEMBER 6TH 2006 - The Christopher and Nevis Social Security Board said Wednesday its decision to invest EC$29 million in a local company was made after a comprehensive analysis of the investment proposal.
"This represents less than 4% of the total investments of the Fund of nearly ¾ of a billion dollars and well within our prudential guidelines of no more than 5% of investments to be invested in any one company," the Board said in a statement to announce its decision to decline the proposal at this time.
The Board said before a final decision on the investment proposal could be made, confidential documentation, the property of the Social Security Board, was leaked to the press. "The Social Security Board takes strong objection to this act of leaking confidential files and documents," said the statement.
In what it said was an opportunity to provide relevant information regarding the recent activities of the Board pertaining to the possible acquisition of additional shares in a local company, the Board said the matter has been the subject of intense discussions in the public domain in the past few days.
The Social Security Board pointed out that it has fiduciary responsibilities over the Social Security Fund. As such, the Board is legally responsible to manage the assets of the Fund and is vested with the authority to discharge the duty to make decisions regarding the finances on behalf of all insured persons who are the OWNERS of the Fund.
It said Section 40 (6) of the Social Security Act, provides the Board with the mandate to invest any moneys forming a part of the Fund in accordance with the Second Schedule of the Act. Furthermore, the Board has established an Investment Policy Statement to guide its investment decisions.
The Board said that in accordance with its policy, the Board conducts an analysis of all proposals before making any decision.
"With respect to the proposal to invest further in the publicly traded company, S. L. Horsford & Company Limited, all of the criteria established in the Second Schedule of the Social Security Act as well as in the Investment Policy Statement were observed," said the Board.
It pointed out that Social Security Fund presently owns 400,000 shares in that company representing 1.4% of the total number of their issued shares of 30.14 million.
~~Adz:Right~~Recently other shareholders of the company representing as a block 10.6 million shares or 35.2 per cent of the issued shares made an offer through a broker to sell this block of shares at a price of $2.10 per share which was eventually reduced to $2.08 per share. The Social Security Board was asked to indicate an interest in the acquisition of this block of shares along with other smaller shareholdings which (with its existing interest of 1.4% of the company) would give it a total shareholding of 46%.
The Board said it carried out a comprehensive analysis of the investment proposal which would have cost about $29 million.
"This represents less than 4% of the total investments of the Fund of nearly ¾ of a billion dollars and well within our prudential guidelines of no more than 5% of investments to be invested in any one company," said the Board's statement.
The Board said that subsequent to the exposure of this confidential document to the media, at its recent regular meeting, it has decided to decline the proposal at this time.
"The decision was based on new developments in the matter and the fact that all the conditions outlined for the investment could not be met," said the statement, which regretted any inconvenience caused to the potential share vendors.
