Tony Vieira's Comments
18 October 2017

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Banks DIH
(Aired 13 December 2004)

   Over the past few days we have been inundated with letters, articles, objections, denials, patriotic calls and picketing about the Trinidad Company Ansa Mc Al's efforts to take over Banks DIH, this is what is commonly called a hostile takeover. i.e. Ansa is planning to take Banks over by buying 51 percent of their shares in the stock market, as opposed to an agreement of merger between the two companies for the mutual benefit of both.

   I am not going to deal with the behavior of the Supervisors at the Guyana Securities Market and their actions in this matter, they suspended trading of Banks' shares without justification and later apologized for it, but it is evident that there was disturbing behavior among some of the members supervising the Securities Market in this country, which will not stand up to scrutiny and leads me to believe that the guidelines as to who should be administering the Securities Market in this country and how they should be doing it, may not be clear enough or enforced properly enough, to maintain a clean Securities Exchange and it may just be, like everything else in this country, riddled with irregularities. But as I have told you before, if you have a cowboy legal system you will have a cowboy stock exchange, cowboy politics, everything will be affected.

   So who is this Ansa Mc Al and why do they want Banks DIH, now I am not going venture into the realm of patriotism in this matter; at least not directly but it will come up, it is inevitable, this is however mainly an economical matter pure and simple; the shareholders of Banks DIH will in the end probably sell their shares to Ansa if the price is right, an act that will benefit their pockets and not what is right or patriotic.

    As Guyanese we have to decide, now, if we are going to allow this kind of investment in our country, and if we are then there will be many takeovers in the future, some companies that will be taken over by the wealthy Trinidadians may be somewhere where you are working now. So those of you with shares in Banks DIH must decide if a few extra dollars for your Banks shares is worth putting yourself or your fellow Guyanese in jeopardy later. Since if we know anything, we know that Ansa is not renowned for their philanthropy when it comes to the treatment of their employees, whilst Banks have proven over the years to be a fair and just employer.  

    Ansa is not coming to help us build the hydro electric plant we so badly need, they are not coming with an offer to invest in and help us to rehabilitate, the GEC/GPL line losses, they are not coming to help us with our problems with the Demerara Estates and they are not coming to help us build a road to Brazil, they are coming to take over a perfectly healthy private Guyanese company and I for one, see no necessity for this, but the matter gets far more complicated and sinister as one looks at Ansa's agenda more closely.

     Ansa owns Carib Beer, Banks' main competitor in the Guyana market, so by allowing this takeover we will be allowing Ansa a monopoly in Beer in this country. It is also conceivable that Ansa may even close the Banks beer plant in Guyana and remove their main competitor in the Guyana marketplace; in any event they will by virtue of producing Carib, Stag and Banks Beer charge what they want for a beer in this country, that ladies and gentlemen is the very nature of a monopoly. And I don't want to hear about our government intervening in  this matter to protect us, they have proven by their own actions that they don't care who has a monopoly in this country and the adverse consequences on our people, they have established beyond any doubt that they don't have even the most fundamental understanding of anything that has to do with economics or business, the Co-Op Bank is a good example they had a responsibility to sell that Bank to someone who wanted to run it as a Bank thereby creating more competition within the banking sector, but they sold it to NBIC for 3 billion Guyana dollars, when there is substantial evidence that another company from Toronto was prepared to offer far more for it, and to run it as a Commercial Bank in competition with other Banks in Guyana, so we can easily conclude that the PPP do not care to protect local businesses, also since the electrical costs in Trinidad is six [6] times less then it is here, Ansa may decide not to produce Banks in Guyana at all, but pay the consumption taxes to bring the Carib beer here from Trinidad, this means that the cooperate taxes for our national treasury can go down by over a three billion dollars a year leaving you and me to fill the gap with our taxes. Ansa may be interested in only two things at Banks, XM Rum and Citizen's Bank.

   In none of its 70 subsidiary companies, does Ansa deal with food so we may very well find that the fast food section of Banks, Demico House etc. will be sold to some other company that deals in fast food, there are unsubstantiated rumors that negotiations have already started along these lines with pigs waiting in the sidelines to move in, creating more monopolies.

   Having looked at all of this and notwithstanding that Ansa is a company owned by Mr. Anthony Sabga, a Lebanese like me, I have decided, given all the data at my disposal, that we must not allow this particular take over, not only for patriotic reasons, that goes without saying, but for purely economic reasons.

     We have a lot of areas in this economy which can yield returns beyond your wildest dreams Mr. Sabga, especially in the power sector and I for one would welcome your investment to help us develop it, but not in this one case sir, there are too many areas of conflict and your agenda is suspect.

   So let us see what has to happen for Ansa to take over enough shares to control 51% of Banks DIH.

     Banks has 881 million shares at present, the board of directors control 41 million shares or 5%, I am informed that the employees and their families at Banks hold 12% of the shares that's 17%  which will not be available to Ansa, Demerara Life holds 10.8% of the Banks' shares and the Trust Company Guyana holds 5.1 %; now Trust company Guyana limited is Demerara Bank owned by Yesu Persaud who also owns DDL; so between Yesu Persaud, Demerara Life, the board of Directors and the employees of Banks DIH we can easily say that 33% of the shares will not be available to Ansa, Yesu Persaud must understand that if Ansa takes over Banks DIH, Mr. Dupree from Clico is coming for him next, Dupree has already expressed more than a passing interest in Guyana's molasses, so if DDL wants our help at that time, and we will give it, fair is fair, so they must stand with Banks DIH now! Demerara Mutual must also understand that there are Guyanese who are patriotic enough to take their insurance business away from them if they do not thread carefully in this matter, and their potential losses can be far, far greater than by simply holding their Banks shares, so if 33 percent of the banks Shares will not be sold then Ansa must buy 51% of the 67% remaining shares on the stock exchange, a daunting task in itself, but consider this, if Banks obtains 150 million shares financed by credit lines from Demerara Bank and Citizens Bank a total of 1.2 Billion dollars if the shares are selling even as high as 8 dollars a share, then they will control 50 % of the Banks DIH shares and make it impossible for Ansa to obtain 51%, it also goes without saying that even if Ansa gets 51% of DIH they may in all possibility leave 49% of the rest of their shareholders completely ticked off with them, it is an important point that must never be misunderstood by Ansa, you cannot run a company when 49 % of your shareholders hates your guts.   

   What is incredible is that Mansoor Nadir the leader of Peter D'Aguair's political Party the United Force, and which formed the spring board to launch him into the Minister of Trade position in the PPP, has not said one word in this matter, in fact the hypocrite may even be formulating plans to facilitate the takeover.

    This is not my last word on this matter by a long shot, it is just my introduction to it which lays the groundwork for future comments.

   Finally ladies and gentlemen I am not in favor of sabotaging Ansa Mc Al by instigating the public to not buying Carib Beer; the time for such drastic action has not yet come. Let's say that Ansa has underestimated our patriotism and give them time to think about this some more before we instigate such drastic action.