What AAJ and NMIAL board minutes said about the US$3m investment

AAJ BOARD MEETINGS

January 23, 2019

• Proposal discussed to amend the AAJ Group Investment Policy to allow for investments in stocks and IPOs.

• Discussion of investment offers from Sterling Investments Limited (SIL) and First Rock Capital Holdings (FRCH) which “recently approached” with proposals.

• AAJ analysed both financial institutions using its investment policy principles.

• Sterling’s investment found to be “suitable for consideration; however, “investment in the stocks of FRCH was not recommended at this time because of limited financial and operational history. As a company just being launched, there was no financial data on which to assess the returns obtainable from this investment”.

• Director Claudette Ramdanie said she would facilitate investigation into FRCH; AAJ Director of Finance Samuel Manning asked to submit information on the analysis.

• Board members present: William Shagoury (chairman); Claudette Ramdanie; Denton Campbell; Tanya Bedward; Juliet Mair; Leroy Lindsay; Epsi Cooper-Morgan; Dudley Beek

March 27, 2019

• Board chairman Shagoury said there was delay in communicating with finance committees of AAJ and NMIAL, a subsidiary.

• A majority of both boards approved investment in First Rock at a retreat in St Ann but the decision was not routed through the finance committees. The finance ministry was also advised of the changes to the investment policy to allow the transaction after the transactions. Each entity bought US$500,000 worth of stocks.

• AAJ Group CEO and President, Audley Deidrick, said members of finance committees of both boards were aware of the investment and the approvals.

• Board member Juliet Mair queried whether the AAJ Act was breached, to which Deidrick replied that these types of investments were not uncommon within Government

January 22, 2020

• Board ratified round-robin approval for second shares purchase in FRCH (US$1 million). NMIAL made similar purchase.

• AAJ in accordance with its investment policy periodically adjusts its investment portfolio to optimise the return it receives on investments. A business case was presented for an adjustment in the investment in First Rock Capital shares. (Both AAJ and NMIAL bought an additional US$1 million worth of shares, each, bringing total investments in FRCH to US$3 million.

February 24, 2021

• Deidrick said NMIAL board was considering best course of action regarding that entity’s shares in First Rock in light of need to contribute its portion of special J$5 billion distribution by AAJ Group to the Government.

• Board member Canute Sadler expressed concerns about the AAJ/NMIAL investment in a start-up company with no history.

• Board member Ian Dear proposed that the finance committee be allowed to review the investment. Sadler, chair of the NMIAL board, said the finance committee at his agency was also doing a similar review. AAJ Chairman Fay Hutchinson supported the decision.

March 24, 2021

• Board member Dear said the finance committee met March 23, 2021 and assessed that the FRCH investment was “in keeping” with the investment policy. Needed more time for in-depth evaluation.

• Deidrick said he met with principals of First Rock and advised of AAJ’s decision to sell some of its stocks and to respond to Government’s request for financial support. First Rock committed to assisting AAJ in identifying suitable buyers for the stock.

• Sadler said AAJ may need to court large investment firms to help

• Sadler and Dear confirmed the First Rock investment was a risky one. Dear said AAJ should independently seek a buyer. Sadler said he identified and negotiated sale with a large and well-known firm which inexplicably cancelled at the last minute.

March 31, 2021 (AAJ FINANCE COMMITTEE MEETING)

• The disposal of NMIAL shares was absolutely necessary since the funds in NMIAL are all earmarked to be completely distributed to the Government by March 2021 of which $2.5 billion had already been distributed and the $1.2 billion, which included First Rock investment, should be distributed to the Government by September 2021.

• Deidrick said he and the AAJ chairman met with principals of First Rock and the NMIAL chairman with BARITA investments.

April 28, 2021

• Deidrick said discussions still ongoing with FRCH principals to identify buyer. Agreed that AAJ would not dispose of stocks by fire-sale (low price).

• Deidrick confirmed that it was NMIAL’s portion of stocks slated for divestment by September 2021 in order to fund its share of the $5 billion special distribution to the Government.

June 17, 2021 (AAJ FINANCE COMMITTEE MEETING)

• Deidrick said principal of First Rock advised AAJ wanted an initiative to dispose of a significant portion of stocks. He said it would be prudent to aggressively pursue the disposal of the stock after a dividend payment for June 11, 2021 was received by AAJ and NMIAL. Said discussions underway with Mayberry and Victoria Mutual Investments/Victoria Mutual Wealth Management.

June 23, 2021

• Deidrick said he was still in dialogue with CEO of First Rock as well as a representative of Mayberry Investments regarding the disposal of NMIAL’s shares.

• Board noted recent newspaper articles on the First Rock investment.

NMIAL BOARD MINUTES

March 5, 2019

• Board requested and later approved changes to investment policy to allow the NMIAL to invest in stocks and IPOs.

April 10, 2019

• Board member Kent Gammon said he was not aware, in his capacity as chairman of the finance committee, of the decision to investment in First Rock and before the amendments to the policy which facilitated the investment.

• Deidrick responded that the matter was “substantially directed” by the AAJ board leading up to and at the February 7-9 board retreat. Said deadline date for investment was presented at the retreat and it was on the basis of the approval by the members of the board that the funds were invested and the policy amended.

• Gammon said the finance department had emailed the matter for approval by round robin. However, it was later discovered that the details were sent to an incorrect email address.

• Board member Julia Moncrieffe Wiggan (Transport Ministry representative) said she was not aware that the decision was taken at the retreat to invest in FRCH and amend the policy and therefore reference to the board should be corrected to indicate that only some members of the NMIAL gave approval.

• Moncrieffe Wiggan also pointed out that scheduled NMIAL board meeting on February 6, 2019, that was held, was the opportunity for the matter to have been raised and deliberated. She said a caucus of the board, excluding herself and director Gammon, met to approve the investment, notwithstanding their presence at the same retreat.

• It was observed that documentation for the investment was signed by then board chair Newlyn Seaton and member Leroy Lindsay.

July 4, 2019

• Board members Gammon and Moncreiffe Wiggan in their capacities as members of the finance committee were made fully aware of the First Rock investment. The board approved, on the committee’s recommendation, the investment retroactively from February 2019. Board approved.

January 24, 2020 (NMIAL FINANCE COMMITTEE MEETING)

• AAJ Group Director of Finance Samuel Manning said round-robin request made of the committee to approve acquisition of additional First Rock shares. Said initially it appeared a “sound investment” but with finance ministry request for annual $5 billion, NMIAL’s cash resources would not be increasing at expected pace.

• As the AAJ was investing with FRCH, should NMIAL also invest in that instrument was the question

• Member Lloyd Pommells said his investigation showed the investment was high risk.

• Member Leroy Lindsay said he supported the decision proposed by Manning to put this investment on hold for now.

• Deidrick suggested to committee that this investment be put on hold while the AAJ goes forward.

• Committee chairman Kent Gammon countered that based on the FRCH’s portfolio and the team behind the company, he did not see the investment as high risk; it was a board decision. He recommended that NMIAL invest but perhaps not at the level currently being proposed.

January 29, 2020

• Board ratified a round-robin decision to buy additional shares (US$1 million) in First Rock.

January 25, 2021

• Chairman Sadler requested Deidrick provide the board with a report on the performance of First Rock investment so a decision can be taken on its future.

February 22, 2021

• Sadler said although First Rock’s financial statement for 12 months to December 2020 showed company made reasonable profit, the NMIAL’s investment was a risky undertaking as the company was a start-up with no performance history. Board member Thomas Chin agreed. Sadler said upon appointment of finance committee, the issue should be foremost on the agenda of the first meeting.

• Sadler observed that a director of First Rock’s board was also a director on the AAJ board.

• Deidrick said the investment was thoroughly discussed and approved by the previous boards.

• Sadler agreed that the finance committee should conduct a detailed study of the investment portfolio, specifically the First Rock investment and make a report to include recommendations on whether it was in NMIAL’s best interest to continue the investment.

• Deidrick said the funds may have to be liquidated in any event to fulfil the NMIAL’s portion of the special distribution to the Government. Chin agreed with the proposal from Deidrick for a sell order where necessary.

April 7, 2021

• Sadler told board he received letter dated March 23, 2021 from the transport and mining minister who directed an investigation of NMIAL’s investment portfolio to ensure all investments were done in accordance with finance ministry regulations.

• Sadler told board he contacted reputable firm to help with sale of First Rock shares.

February 2019 shares purchase

Decision made by majority board members at a joint AAJ/NMIAL board retreat on February 8

AAJ board members present:

William Shagoury – chairman

Fay Hutchinson – deputy chair

Epsi Morgan-Cooper

Tanya Bedward

Julliet Mair

Denton Campbell

Leroy Lindsay

Claudette Ramdanie

Dudley Beek

NMIAL board members present:

Newlyn ‘Neil’ Seaton – chairman

Kent Gammon

Leroy Lindsay

Donna Reid

Julia Moncrieffe Wiggan

William Shagoury

Ludlow Johnson

January 2020 IPO First Rock Investment – AAJ

Approval given through a round-robin method. Position of members not disclosed by AAJ but it revealed the position taken at the March 2020 board meeting to ratify the approval.

William Shagoury – chairman – approved

Fay Hutchinson – deputy chair – approved

Dudley Beek – approved

Leroy Lindsay – approved

Denton Campbell – approved

Epsi Morgan-Cooper – approved

Donahue Martin – approved

Pauline Bowla – abstained

Tanya Bedward – approved

January 2020 IPO First Rock Investment – NMIAL

Approval given through a round-robin method. Position of members not disclosed by NMIAL but it revealed the position taken at the January 2020 board meeting to ratify the approval.

Newlyn ‘Neil’ Seaton – chairman – recused*

Kent Gammon – approved

Leroy Lindsay – approved

Donna Reid – approved

Julia Wiggan Moncrieffe – absent

William Shagoury – approved

Lloyd Pmmells – approved

Thomas Chin – approved

Mark Hart – absent

* Seaton is the brother of York Page Seaton, a founding director and shareholder of First Rock.