Court cases won’t impede Cornerstone reorganisation, says interim Barita boss
Published:Friday | August 25, 2023 | 12:08 AM
The ongoing Supreme Court case relating to stock market pioneer Rita Humphries-Lewin will not impede the reorganisation of Cornerstone and its affiliated companies into a single financial group, says interim CEO of Barita Investments Limited and Chief Risk Officer of Cornerstone United Holdings Jamaica, Dane Brodber.
Barita is a listed company that’s majority owned by Cornerstone.
“The court case doesn’t present any structural impediments to us getting the financial holding company licence, and we continue to go along,” said Brodber.
The banking laws require a separation of banking or deposit-taking operations from other entities within a financial group, and Cornerstone is currently in the process of transforming into a financial holding company. The privately held company, headed by Chairman Mark Myers and Deputy Chairman/CEO Paul Simpson, owns regulated entities Barita, which is a securities dealer and brokerage, and Cornerstone Trust & Merchant Bank, which is designated as a banking entity.
The reorganisation will also see MJR Real Estate Holdings and Barita Finance Limited being brought under the group structure. They are currently held off-balance sheet.
Cornerstone already hurdled one of the early rounds of the reorganisation when it received a non-objection letter from the Bank of Jamaica on the structure of the operation, but with the proviso that the off-balance sheet operations be brought onto the books.
At an investor briefing hosted by Barita Investments on Tuesday, Brodber said Cornerstone United Holdings Jamaica Limited and Cornerstone Financial Holdings Limited took “proactive” measures by submitting a claim in the Supreme Court in regard to the ongoing allegations against it.
The matter involves market pioneer Humphries-Lewin, who, in 2021, sold 28.2 million shares in Barita, and also purchased 1.4 million stocks in Cornerstone. Deborah Mordecai Edwards, a niece of Humphries-Lewin, charged that her 87-year-old aunt was suffering from dementia, and was deceived into the transaction. It’s a claim rejected by Cornerstone.
Barita holds capital of $35.5 billion and total assets of $124 billion, its June financial report shows.
Net profit totalled $3.1 billion for the nine months ending June, down 20 per cent from $3.8 billion in the prior year.
Barita described the results as reflective of the “headwinds of the market and business cycle downturns”.