Sagicor Group Jamaica has totally different authorized battles to deal with in 2025.
SAGICOR Group Jamaica Restricted faces two high-stakes authorized battles exceeding $1.7 billion mixed, as disclosed in its 2024 monetary filings, with one case difficult the interpretation of post-acquisition funds tied to the controversial $3-billion Alliance Monetary Providers deal and one other alleging shareholder dilution in a Barbadian monetary entity.
The disputes — in opposition to former Alliance house owners Peter and Robert Chin, who has a plus $1-billion declare, and Cornerstone Monetary Holdings Restricted, which has a $761-million potential write-down threat — coincide with revelations that Jamaican taxpayers, not Sagicor, footed a multimillion-dollar settlement from a separate Privy Council ruling involving Sagicor Financial institution’s predecessor liabilities.
Alliance Monetary battle
Following the April 2022 sale of Alliance Monetary Providers to Sagicor Group Jamaica, former house owners Peter & Robert Chin together with their affiliated firms have introduced a declare for greater than $1 billion in opposition to Sagicor. The Sagicor financials said, “The Claimants and their related firms introduced an motion in opposition to SGJ alleging that the Firm [Sagicor Group Jamaica] breached the Share Switch Settlement along with breaching the discount of share capital provisions of Part 71 of the Firms Act. The Declare surrounds a contractual dispute regarding the interpretation of a contractual clause regarding the put up transaction earn out. The sum in dispute exceeds $1 billion.”
Alliance Monetary is a cash providers firm that offers in remittances, invoice funds and overseas change buying and selling. The corporate sought to go public in December 2020 the place two of its shareholders would have acquired $1.99 billion from the preliminary public providing (IPO) at a pre-listing valuation of $10 billion. Nevertheless, that IPO was placed on pause attributable to a matter regarding a separate entity related to the Chin brothers.
After costs have been laid in opposition to Alliance Finance Restricted (now Oxford Finance Restricted) and Alliance Funding Administration Restricted, the Financial institution of Jamaica (BOJ) suspended the licence of Alliance Monetary Providers to function its cambio and remittance enterprise in December 2021. The BOJ additionally revoked Alliance Monetary’s potential to function in its fintech regulatory sandbox.
After a failed injunction listening to within the Courtroom of Attraction and Alliance Finance pleading responsible to the fees laid in opposition to it, the Chin brothers and their related firms determined to promote their shares in Alliance Monetary to Sagicor Group and Alliance Funding Administration’s securities vendor e-book of enterprise to Sagicor Investments Jamaica. Sagicor Group paid an preliminary money consideration of $2.6 billion (US$16.8 million) and had a contingent money consideration of as much as $3.4 billion (US$22.6 million) primarily based on particular efficiency standards.
Sagicor Group’s audited numbers revealed that the money and contingent consideration on the time of the April 2022 acquisition was $3.27 billion and it paid $3.16 billion by the top of 2022. That resulted in Sagicor Group recording a $116.72 million in different earnings in its financials. Through the first three months of 2022 when Alliance Monetary Providers was unable to function, it generated no core income and had internet internet losses of $1.59 billion. After Alliance Funding Administration acquired US$0.1 million from Sagicor Investments Jamaica, it surrendered its securities vendor licence to the Monetary Providers Fee (FSC).
Peter Chin, Robert Chin, Alliance Funding Administration Restricted, Melwood Holdings Restricted and Willo Capital Restricted filed their declare in opposition to Sagicor Group in June 2024 with their particulars at over 90 pages. Sagicor Group filed their defence in August 2024 and an amended defence in November 2024. Final Monday, Justice David Batts had a digital case administration convention amongst the events concerned within the case.
“The goodwill on acquistion of Alliance Monetary Providers Restricted was written down by $700,000,000 at 12 months finish attributable to decline in revenues from a pointy decline in remittances to Jamaica from the USA and declining overseas change margins,” said Sagicor. Goodwill in Alliance Monetary was marked down from $2.67 billion to $1.97 billion.
Alliance Monetary introduced in $1.25 billion in income throughout 2023 for Sagicor Group which is near the $1.47 billion it earned in September 2020. No provision was listed by Sagicor Group in its financials associated to this case.
Cornerstone combat will get underway after three-year wait
The trial between Sagicor Investments Jamaica Restricted and Cornerstone Monetary Holdings Restricted will get underway later this 12 months when the Barbadian trial is held on September 23, 24 & 30. Sagicor Investments filed its declare in December 2021 for damages of US$4.06 million associated to dilution of its shareholdings in Cornerstone Monetary from two rights points. That declare was filed within the Barbadian Supreme Courtroom with Cornerstone Monetary as the primary defendant with Paul Simpson, Arnold Aiken, Hugh Coore, James Godfrey, Nigel Chen See, and Mark Myers as defendants.
Sagicor Investments’ audited financials revealed that it didn’t take part in Cornerstone United Holdings Jamaica Restricted’s (CUHJ) July 2020 rights situation. Cornerstone Monetary subsequently allotted shares to the buyers who participated in CUHJ’s rights situation at a fraction of its e-book worth. That resulted in Sagicor Investments’ stake being reduce from 4.5 per cent to three.46 per cent. Sagicor Investments’ financials said, “CFHL has argued this was justifiable due to an settlement to take care of related shareholding buildings. A second rights situation was achieved on the same foundation thus lowering the corporate’s shareholding to 2.77 per cent.”
Whereas Sagicor Investments’ financials said that authorized opinions give it a excessive likelihood of success in its case, if the Barbadian courts have been to rule in opposition to Sagicor Investments, it must write down its worth in Cornerstone Monetary by US$4.88 million or $761.83 million.
The trial will start a number of months after the scheme of association to make Barita Investments Restricted and Cornerstone Belief & Service provider Financial institution Restricted subsidiaries of Barita Monetary Group Restricted is accomplished. Considered one of Cornerstone United’s 15 shareholders voted in opposition to the scheme of association on the extraordinary basic assembly (EGM) held on January 20. Sagicor Investments is a type of 15 shareholders and requested a variety of inquiries to the Cornerstone workforce, together with queries surrounding Rita Humphries-Lewin, the founding father of Barita.
GOJ pays YP Seaton
Regardless of Sagicor Financial institution Jamaica Restricted being the entity which misplaced its case in opposition to YP Seaton, Earthcrane Haulage Ltd and YP Seaton and Associates on the Privy Council in December 2022, the Authorities of Jamaica (GOJ) is the physique that paid Seaton’s closing settlement on October 11.
Seaton had a part of his enchantment allowed by the Privy Council which resulted in his unique United States {dollars} (USD) account balances and certificates of deposit (CD) balances getting used as a substitute of the Jamaican greenback (JMD) quantity. Additionally, Seaton benefited from the account balances benefiting from compounded month-to-month rates of interest with month-to-month rests with the USD CD steadiness benefiting from curiosity being compounded quarterly. Seaton’s 4 mixed accounts had US$428,882.23 and the USD CD had US$65,880.22.
Nevertheless, Sagicor Financial institution Jamaica was successfully absolved by the settlement signed by FINSAC Restricted to totally indemnify RBTT Monetary Holdings Restricted and RBTT Worldwide Restricted when it acquired Union Financial institution. Sagicor Group acquired RBC Royal Financial institution Jamaica Restricted in 2014 and benefited from that indemnity which additionally included a GOJ assure on a full indemnity foundation.
