OUT THE DOOR

After months of deafening silence over the scandal bedevilling the Airports Authority of Jamaica (AAJ), Transport and Mining Minister Robert Montague told Parliament on Tuesday that he had dissolved the board of the public body over the FirstRock Holdings investment debacle.

In an about-turn after forestalling 21 questions on the AAJ's $450-million stock purchase in the St Lucia-registered firm, Montague told lawmakers that most members of the AAJ board and its subsidiary, Norman Manley International Airport Limited (NMIAL), have already offered their resignations and he has “every intention” of accepting them.

Following a Sunday Gleaner article in July on the scandal, Finance and the Public Service Minister Dr Nigel Clarke revealed in Parliament that the entities broke the law in the first of two investments because they did not get his ministry's permission.

Additional reporting showed that the AAJ board disregarded an initial recommendation not to invest in FirstRock Capital Holdings because the start-up had a limited financial and operational history.

First Rock started operations in March 2019, a month after the initial investment was made.

The second investment took place in January 2020.

Montague confirmed that Fay Hutchinson, the AAJ board chairperson, did not declare that she bought personal shares in First Rock in 2019.

He also said she did not declare that she had joined the board of directors of FirstRock after the second investment in January 2020.

The AAJ and NMIAL together bought US$3 million worth of stocks in FirstRock.

Current AAJ board members who were involved in at least one of the FirstRock investments are Hutchinson, Denton Campbell, and Epsi Cooper-Morgan.

Pauline Bowla, who joined the board after the first investment, abstained in the vote on the second investment.

Current NMIAL board members who were involved in at least one of the investments are: Donna Reid, Leroy Lindsay, and Thomas Chin.

Montague told the House that the AAJ did not “deliberately or knowingly breach the PMBA 2017 regulations”.

The transport and mining minister also commented on questions of conflicts of interest that had been raised in relation to the FirstRock investment and certain board members.

He noted that “as it relates to the AAJ board, one member of the board who is a minority investor in First Rock, but as this represents a minority stakeholding of less than one per cent, it was not considered material and hence not deemed to have created a conflict of interest”.

However, Montague said that the member informed some directors of the board about the investment.

Montague said that in March 2021, he was informed by a director of NMIAL that the acquisition of shares by AAJ and NMIAL was not in keeping with the PMBA Regulations.

The minister said he then penned a letter to both chairmen ordering an investigation to safeguard the risk.

However, Julian Robinson, MP for St Andrew South East, questioned the appropriateness of the minister asking members of the board to investigate themselves when they approved the investments in FirstRock.

“You are asking Caesar to investigate Caesar. It can't be right. The board has to approve these investments and particularly where there was an issue around conflicts of interest that you are asking the same chair of the entities to investigate themselves,” he said.

Robinson also took issue with the claim by the minister that there was no conflict of interest because a member only held one per cent of the shares.

“Who would have determined that there was no conflict of interest? Again, the same persons who are involved in the transactions are making the decisions surrounding themselves. That can't be right either,” said Robinson, the opposition spokesman on finance.

Montague also told his parliamentary colleagues that the shares purchased by AAJ and NMIAL in FirstRock were not acquired “for speculation given the nature of the real estate business in which the company is involved”.

He said a reconsideration of the investment was being done.

The minister divulged that the trading price of the shares had suffered some decline since the onset of COVID-19.

“There is no intention to hurriedly sell at a loss,” Montague said.

Phillips said he was also disappointed at some of the minister's responses to the AAJ's violation of government regulations.

He quoted from the AAJ's parent law at Section 10 (3).

According to Phillips “a director who is directly or indirectly interested in a contract made or proposed to be made by the authority shall disclose the nature of his interest and shall not take part in any deliberation or decision of the authority with respect to the contract.”

The Manchester North West MP also insisted that the ministry put measures in place to avoid a recurrence of the breaches by the AAJ.

Montague backtracked on his insistence, last week, that he would not answer the 21 questions posed by his opposition counterpart, Mikael Phillips, citing a purported anti-corruption probe as his shield.

But Prime Minister Andrew Holness made it clear on Tuesday that a minister of government was obliged to answer questions posed by the parliamentary Opposition.

His comments appeared to be a sharp rebuke aimed at Montague and House Speaker Marisa Dalrymple Philibert, who had ruled that the minister should not respond to the queries because of the alleged probe by the Integrity Commission.

However, Montague made no reference on Tuesday to the Integrity Commission following last week's upbraiding by chairman of the oversight body, Justice Seymour Panton, who reminded lawmakers that neither they nor others could announce a probe by the investigative and prosecutorial body.

Section 53(3) of the Integrity Commission Act bars the commission from announcing an investigation until a report is tabled in Parliament.

EDITOR'S NOTE: Fay Hutchinson has filed a lawsuit against The Gleaner Company (Media) Limited alleging that previous articles defamed her. Those issues have not been ventilated in this piece.

editorial@gleanerjm.com

Current AAJ Board Members:

Fay Hutchinson - Chair

Denton Campbell

Pauline Bowla

Epsi Cooper-Morgan

Natalee Mirander

Clifford Blake

Ian Deer

Ricardo Lynch

Canute Sadler

NMIAL Board

Canute Sadler – Chair

Arielle Brown

Jinelle Jones

Donna Reid

Ronique Rhoden

Thomas Chin

Leroy Lindsay

Egwugwu Priestly

Lloyd Waller