Shagoury: I did not know

William Shagoury, under whose board chairmanship the Airports Authority of Jamaica (AAJ) and a subsidiary bought US$3m (J$409) worth of shares in First Rock Capital Holdings, said he did not know that his deputy Fay Hutchinson was also a director of the St Lucia-registered company.

But Shagoury is insisting that had he known, the situation would not have been tolerated at the state entity because “that would be a conflict of interest”, a view not shared by the AAJ and the Robert Montague-led transport ministry which has declared being “satisfied” there was no such dilemma.

Hutchinson, who has one million shares in the start-up private equity firm, has been an AAJ board member since April 2016, rising to deputy chair in May 2019 before taking over from Shagoury in November 2020.

The former chairman also appears to recall few details about the second of the two share purchases, raising even more questions about the investment that has triggered a call from Julian Robinson, the shadow finance spokesman, for an investigation by the Integrity Commission.

“I didn’t know about that,” admitted Shagoury when asked whether he was aware that Hutchinson took up the First Rock board appointment that the company announced on March 3, 2020, just over a month after the AAJ and NMIA Airports Limited bought US$2m worth of shares.

Shagoury, who said he learnt about the directorship from The Gleaner, said he should not be blamed for not knowing.

“We can’t know who is on a board. We don’t know unless you tell us,” said Shagoury, the custos of Clarendon, who served as chairman from 2016-2020.

Hutchinson did not reveal her First Rock directorship, the AAJ confirmed in a June 10 statement provided by Audley Deidrick, the president and chief executive officer.

“This was not construed to present a conflict of interest. Therefore, no declaration was made,” the AAJ said.

The insurance sales executive, who has close ties with the ruling Jamaica Labour Party, even serving as an officer, resigned from First Rock’s board on March 17, one year after her appointment, reportedly under pressure from officials at the transport ministry.

Hutchinson does not believe her overlapping directorship posed any conflict of interest.

“No personal benefit or interest was being derived,” said the businesswoman, who was vague when asked what role she played in the AAJ’s decision to invest in First Rock.

“As a director of the AAJ’S board, the board made the decision,” she answered.

That was unlike the clearer statement from the Ministry of Labour and Social Security which said Hutchinson’s son, Andre Hutchinson, declared his interest and recused himself from deliberations at the National Insurance Fund (NIF) on whose board he sits.

The NIF, the state’s pension fund, has 10 million units of First Rock shares which it bought for US$1.1m in a January 2020 IPO.

The opposition’s spokesman on Tuesday tabled 12 questions on the issue in the House of Representatives for Finance Minister Dr Nigel Clarke to answer in 21 days.

Among the matters raised are whether the AAJ’s First Rock investment followed government policy; whether there’s a cap on the amount of money for those investments; and the extent of similar transactions by other public bodies.

Shagoury, meanwhile, has dismissed comments from his predecessor Dennis Morrison that the AAJ should not have had have enough money to invest in “non-core” ventures because it had to take loans to cover some of its basic functions.

“It (AAJ) had to go and borrow money to do work on the runway at Montego Bay airport and at Norman Manley, too,” said Morrison, whose latest chairmanship spanned 2012-2016, the period of Portia Simpson Miller administration.

Shagoury, who revealed that the private equity investment was a first for the AAJ, said things changed after he took over.

“Maybe under his (Morrison’s) tenure, it never had enough money, but under mine, it did,” he said, noting that the authority had money “sitting in the bank not making anything” and the board wanted to earn money for the authority.

The AAJ Act allows the investment of money “not immediately required” for the authority’s functions.

Shagoury said there was no contemplation under his leadership to sell the shares, but suggested that Gleaner reports about a planned dumping of the shares may be linked to the impact of the COVID-19 pandemic which left economies reeling and grounded planes for almost a year.

The AAJ Group has declined to confirm the reports.

Hutchinson bought her shares in February 2019, the same time the AAJ and the NMIA Airports Limited bought their first stake. The entities bought a second set in the January 2020 IPO.

Regarding the 2020 purchase, Shagoury said he’s trying to get details on the transaction. “I don’t have too much recollection,” he said on Tuesday.

With approximately 14.3 million shares each, the NMIAL and the AAJ were listed as the third- and fourth-largest shareholders, respectively, in First Rock, according to the company’s unaudited financial statement for the quarter ending March 31, 2021. The NIF is ranked seventh.

It was also revealed that a board member of the NMIAL recused himself from investment considerations, a development confirmed by the AAJ, which declined to confirm whether it was Newlyn Seaton, the then board chairman whose brother, York Page Seaton, is a founding director and shareholder of First Rock.