As Banks celebrates its 50th anniversary in Barbados, it has been running several full page ads in the press outlining its achievements, which are real and for which the “Beer of Barbados” can be justly proud.

However, one ad highlighting the beer company’s financial history seemed to me strong at the beginning, but weak at the end.

Banks’ financial story may be unique in the island’s history: Fired up by an evangelising businessman from then British Guiana, Peter D’Aguiar, Bajans of all walks of life invested in the start-up company’s shares, helping to give it enough capital to build its first brewery. 

It was truly phenomenal. Equally so, when the money was raised and the brewery up and selling product, was the personal love and loyalty for the brand felt from top to bottom of the organisation. 

But today, despite all that, Banks Holdings Ltd., is a foreign-controlled company.

A few years ago Banks Holdings’ then-largest shareholder - with over 20% of the shares - Barbados Shipping & Trading Co. Ltd., became a wholly-owned subsidiary of TT’s Neal & Massy Group; a bit more recently, the Trinidadian company which bottles the Blue Waters brand of water got a fairly big stake in BHL in return for its shares in a Belizean citrus grower; an accompanying rights issue was poorly subscribed locally so BS&T took up the remainder, further adding to N&M’s control.

Last year, the Banks Holdings board agreed to issue 20% in new convertible debt to a investment company called Latin Finance (through a subsidiary called SLU Beverages), which did the conversion to shares faster than a sno-cone can melt in the hot sun. A resolution was then passed at the AGM a few months later changing the legal basis on which Latin Finance /SLU had been allowed in. As a result, no new BHL shares can be offered to anyone without the new investor agreeing.

You may remember how upset many local shareholders were at the time, but it was perhaps inevitable that foreign capital would have to be found to help fuel the group’s expansion into a multi-million-dollar new facility being built at Newton, Ch. Ch.

It was just the way it was done that seemed like a betrayal of the Banks legacy, that of a public company rising from nothing thanks to the hard-earned money invested in it by the average working man. Last year they were not even given a chance to increase their stake in the company, which in my view shattered the mythology that Banks had created all through its youth and maturity. Today, it is just another location for corporate investment. 

In mitigation, the case that could be made by BHL as it celebrates its flagship company’s 50th birthday was made to me by Sir Allan Fields in his strong defence of the board’s actions.

He told me last year that over the near quarter of a century that he had been associated with Banks such dilutions of shares had been done six times.

“In April 1991 we had a 5.4% dilution when we took over BBC. We issued shares; we did not seek shareholders’ permission. In 1998 we had a 19 percent dilution when we bought Pine Hill Dairy because we equity-financed it without any shareholders’ approval.

“In Banks DIH in Guyana 2005 we had a ten percent dilution when we used equity financing to acquire shares in Banks DIH. In 2006 when we took over CPBL (Citrus Products of Belize Ltd.) we had an 11.4 percent dilution without any approval of the shareholders.”

Sir Allan noted that Banks had had foreign shareholders long before SLU Beverages had come on the scene, with major shareholders in Trinidad, Guyana and further abroad. “I trying to educate people to understand that we now live in a global world. You can’t have borders and work only within them. We can’t ask government to let us invest in the Bahamas, Guyana, Belize or London, all of which we’ve done, and don’t want those people to come and invest our country. It’s a global stage that we’re on now. While we can invest outside, the outside people have to be able to invest in here, otherwise it just simply would not work. The whole system would fall down.”

It is a fair argument, a practical one in a world completely different to that of the early 1960s, but I have not yet seen it made in the 50th anniversary advertising. Maybe it is somewhere in the fine print.

But in my view, the storied Banks Beer and its parent BHL must proudly embrace all of its financial history, even the controversial parts.

ends