WEDNESDAY, OCTOBER 26, 2016
business@tribunemedia.net
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Unions seek 20-fold employer fines rise By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Bahamian trade unions are pushing labour law reforms that will impose a 20-fold increase in financial sanctions on businesses and an exorbitant redundancy cost burden - while simultaneously removing restrictions on their operations. The proposals are due to be discussed for the first time by the National Tripartite Council, which also features private sector and labour representatives, when the body meets on November 3 next week. Business community execu-
Want long-serving line staff pay to equal managers Massive business cost burden, as unions freed-up Labour law reforms set for November 3 talks tives yesterday again warned that the proposed amendments threatened to increase private sector costs to the point where they would “stop people want-
‘Intricate fabrication’: Sarkis blasts process for selling Baha Mar By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Sarkis Izmirlian has slammed Baha Mar’s transfer to a special purpose vehicle (SPV), controlled by its Chinese secured creditor, as “an intricate fabrication” designed to mask the failure of the project’s sales process. The project’s original developer, in an October 24 letter to China Export-Import Bank’s president, Liu Lange, argued that the lack of transparency surrounding the Baha Mar sales process was to blame for failing to attract a buyer. He added that the Supreme Court’s approval for the bank’s SPV, Perfect Luck Holdings, to purchase Baha Mar was also intended to camouflage the inability of the Deloitte & Touche receivers to find purchasers willing to make the Beijingowned institution ‘whole’. Mr Izmirlian’s letter See pg b5
Says ‘SPV sale’ designed to mask failed buyer search Developer brands no response to offer as ‘bizarre’ Others questioning ‘sincerity’ of sales process
Sarkis Izmirlian
Three local insurers earn ‘A grade’ ratings ByNEILHARTNELL Tribune Business Editor nhartnell@tribunemedia.net Three Bahamian insurance companies yesterday received ‘A grade’ ratings from the industry’s leading international rating agency. A.M. Best placed financial strength ratings of A- (Excellent), and issuer credit ratings of ‘a-’, on each of Summit Insurance Company, Family Guardian Insurance Company and Colina Insurance Company. All three were assigned a stable outlook. Summit Insurance Company, the only property and casualty underwriter of the three, retained the leading rating despite the fact that Hurricane Matthew-related claims will likely slash its 2016 profits - possibly pushing it into a loss. “Significant recent damage and losses from Hurricane Matthew will tarnish overall results for 2016,” A. M. Best said of the company. “However, Summit’s catastrophe reinsurance programme adequately protects surplus from such events, and the balance sheet is expected to remain strong.” It added: “The ratings reflect Summit’s supportive balance sheet strength,
Summit hits peak despite Matthew results ‘tarnish’ Rivals Colina and Family Guardian also at ‘A-’ A. M. Best concern on mortgage portfolios historically favourable operating results and leading market presence in the Bahamas. “These rating strengths are partially offset by the company’s geographic and underwriting risk concentration, and the challenges that weakened economic conditions and strong competitive market pressure have created for Summit’s overall operating performance and growth opportunities.” Summit, the carrier through which Insurance Management places most of its property and casualty business, was formed in response to a lack of market capacity following Hurricane Andrew in 1992. “The company enjoys excellent brand recognition See pg b6
ing to be in business”, and drive away potential foreign direct investment (FDI). They implied that the devastation wrought by Hurricane Matthew on the Bahamian economy, coupled with this nation’s latest slippage in the World Bank’s ‘ease of doing business’ rankings to 121st spot, provided further reasons to hold-off on implementing any legislative changes. These include removing the Employment Act’s existing ‘12-year cap’ on severance/ redundancy pay, and a mandatory 60-day notice period that employers must give the Government and relevant bargaining agents - trade unions
- when they intend to make 10 or more employees redundant. Tribune Business, though, can reveal for the first time the extent of the trade union movement’s demands, which go much further than what has been revealed publicly to-date, and threaten to price the economy - and businesses - out of the market. When it comes to redundancy pay, the Employment Act currently mandates that employees receive two weeks’ notice or pay in lieu of notice, plus two weeks pay’ for every year worked up to 24 weeks. This effectively ‘caps’ redundancy pay for line staff at a sixSee pg b4
Sarkis ally admits Chinese, Govt are saying: ‘Go to hell’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A key Sarkis Izmirlian ally yesterday conceded that his attempts to regain Baha Mar’s ownership will likely prove futile, given that both the Government and Chinese were telling the original developer to “go to hell”. Dionisio D’Aguilar told Tribune Business that the stony silence from Beijing showed the China Export-Import Bank had no intention of “engaging at all” with Mr Izmirlian, despite the latter’s pledge to beat any rival Baha Mar bidder’s price. The former Baha Mar director added that last week’s statement from Prime Minister Perry Christie’s office, calling on Mr Izmirlian to ‘engage’ with the bank and its Perfect Luck Hold-
Concedes likely futility of latest Baha Mar bid D’Aguilar: PM’s engage urgings are ‘hollow’ ‘Mind boggling’ original developer being ignored ings vehicle, “rang hollow” because the Government knew the Chinese wanted to freeze the original developer out. Mr Izmirlian’s camp yesterday released another letter to the China Export-Import Bank, imploring it to engage “in a serious discussion” over his latest offer and promise to trump any other See pg b6
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VAT drops Bahamas to 121st in ‘ease of business’ rankings Perilously close to world’s bottom third in key survey Chamber chief surprised at 73spot fall over taxes World Bank says eight working days spent on VAT By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Bahamas is now perilously close to dropping into the bottom third of the World Bank’s ‘ease of doing business’ rankings, after the country was ranked 121st out of 190 nations when it comes to facilitating private sector activity. Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, expressed surprise that this nation had tumbled 73 places in the global rankings when it came to the ease of ‘paying taxes’. Pointing to the initiatives undertaken to improve tax collection efficiency and administration, Mr Sumner said the Chamber - via a public private partnership (PPP) style Edison Sumner approach - would work with the Government and its agencies to obtain a better understanding of the World Bank’s findings. “We’ve made improvements in the tax system,” he told Tribune Business. “I’m surprised in those numbers, as I believe we’ve improved our tax collection system.” The plunge in the Bahamas’ ‘paying taxes ease’ ranking, from 22nd in the world to See pg b6
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