About NICA

Background

This report on the affairs of the National Investment Company of Anguilla Limited (NICA) covers the years from 1995 to 2010. In 1995 the Company was six years old, having been established in 1989. NICA experienced a rocky start to its operations. At start up, the focus of its business plan was on the establishment of three significant business enterprises. They were:

  1. A wholesale and cash and carry trading operation at Sandy Ground - National Wholesale;
  2. A bookstore - National Bookstore; and
  3. A housing project at Gibbons Estate - Gibbons Estate Housing Project.

NICA also invested in the shares and other financial securities issued by companies in Anguilla, the Caribbean and internationally, particularly the United States, as part of its overall business strategy of diversifying its investments.

Expectations ran high among shareholders in 1989, when NICA was established. This was in part because the Company was promoted by the National Bank of Anguilla (NBA). At the time, NBA, established in 1984, was earning its shareholders satisfactory returns in the form of cash dividends and increases in the value of their shares. NBA had acquired the Anguilla Branch of Bank of America in 1985. The branch was already profitable, when it was taken over.

NICA, as a start-up company, had to build its business from scratch. Three to five years of successful operations were needed before the Company could earn significant profits from its business operations. Instead the Company faced major challenges from the start of its operations:

  1. The National Bookstore lacked effective management. It also faced aggressive competition from the other businesses involved in supplying school text books and stationery, office stationery, printing and copying supplies.
  2. National Wholesale was established to fill wholesaling and bulk buying gaps in Anguilla's trading industry. Its long range goals included promoting greater cooperation and joint venturing by Anguillian retail merchants in purchasing and wholesaling. This would enable them to take advantage of the benefits of bulk buying and lower wholesale prices. NICA's long term aim was to minimize or remove the likelihood of one or more foreign bulk purchasers and wholesalers establishing operations on Anguilla in competition with and posing a major threat to Anguilla's indigenous merchants and traders. National Wholesale lacked management with experience in bulk buying and wholesale merchandising; it operated with insufficient working capital, and in particular, faced opposition and hostile competition in the market.
  3. The Gibbons Estate Housing Project would break new ground in housing development in Anguilla. It was imperative that it be carefully planned and effectively executed. With no precedent to look to in Anguilla, NICA decided to proceed cautiously with this project. In addition, it needed to secure the services of professionals experienced in developing successful and profitable housing projects and to arrange project finance as well as funding for home buyers, wishing to purchase houses in the estate. Planning for the development of this project which was to be the lead venture for NICA and which aroused much interest progressed slowly. The project eventually became stalled because for various reasons it was not possible to put in place the necessary institutional arrangements, financing and project management and to generate the essential market demand for housing project residences to actually undertake the construction of the housing estate.

The Period 1995 - 2010

The National Investment Company of Anguilla (NICA) faced major challenges by 1995. The management structure that was in place had been ineffective. National Bookstore and National Wholesale had accumulated significant losses. While most of NICA's investments in shares and other securities issued by companies in Anguilla and elsewhere earned it significant returns, in one or two instances significant losses were suffered.

In response, the Board of Directors closed the wholesale operation, reorganized the bookstore and laid off the senior management in order to prevent further losses and reduce overhead costs. The Company, going forward, was managed by the Board of Directors on a voluntary basis. The Board met on a monthly basis and in between as needed and endeavoured to run the affairs of the Company in that way. Some success was achieved. The financial bleeding caused by the wholesale operation was stopped and the administrative and overhead costs were reduced to a minimum. NICA achieved break even and/or realized a small profit in the succeeding years. A number of major deficiencies persisted.

Annual General Meetings (AGM's) were held infrequently after 1995 with prolonged intervals in between. The Company was not honouring some of its fiduciary obligations. When an AGM was occasionally held, shareholders expressed their disappointments and frustrations in strong terms. The atmosphere was usually tense and charged. In such situations, shareholders usually opted to make drastic changes to the membership of the Board of Directors, in the hope that the fresh membership would be able to accomplish more to their liking and expectations that the directors they replaced. Later it was seen that this practice did not help but hurt NICA, further preventing the Company from stabilizing its operations and eventually growing.

NICA had wisely invested in a number of companies, some Anguillian based, while some were based off island. It is a shareholder in the Anguilla Electricity Company (ANGLEC), the Anguilla Mortgage Company (AMC), the St.Kitts-Nevis-Anguilla National Bank (SKNANB), Malliouhana-Anico Insurance Company (MAICO), and the Eastern Caribbean Home Mortgage Bank (ECHMB). All of these are vibrant companies, in which NICA's Board of Directors wisely invested over the years. These investments allowed the Company to be visible to the corporate world in the Caribbean.

The Company was alive but not functioning properly. Shareholders were in the dark because of the failure of the Board to hold AGMs regularly. Change had to come. This change came in the form of a court case whereby some of the concerned shareholders took NICA to court. The High Court ordered an investigation, which resulted in the Avondale Report. This Report clearly outlines what took place, makes findings, presents recommendations and the expected outcomes that would be desirable. Today, most of the recommendations have been followed and significant progress achieved. The Company has been able to audit some thirteen years (13) of unaudited accounts; the land at Gibbons has been valued and an updated valuation obtained. Varied suggestions for future land use are received from time to time and are checked and reviewed; the matter relating to Kennedy Hodge is presently being reviewed; plans for an upcoming AGM are being put in place.

A number of interim changes were made to the membership of the present Board, since it was reconstituted by shareholders at the Special General Meeting of shareholders a few years ago. At that meeting shareholders had elected Ms. Joyce Kentish to the Board. The law firm "Joyce Kentish & Associates" is the Company's law firm. Ms Kentish, who attended Board meetings for a short time, saw this as a situation of conflict and thus resigned from the Board. Following her resignation, two other members resigned, Mr Othlyn Vanterpool and Rev John Gumbs. They felt that the Company was not progressing and they no longer wanted to serve on the Board. An interested shareholder with much experience gained from corporate life in America showed interest in becoming a board member. Later a resolution was passed and Mr. Seymour Hodge was co-opted and made an interim member of the Board. Though not meeting regularly each month, the Board has been able to function and to conduct NICA's business with a reasonable measure of success and progress, despite the continuing challenges.

The National Bookstore (NBS), whose operations were reorganized after 1995, did not achieve the turn around in business that was the objective of the reorganization. It had been incorporated, after some years, as a wholly owned subsidiary with a view to finding investors to participate or acquire the business. The company was losing money. The Company operated in rented premises, first at the Social Security Complex and later at a building owned by Mr. Albert A. R. Lake opposite the Albena Lake-Hodge Comprehensive School (ALHCS). It was decided to close the Bookstore. It was decided to purchase two containers and move the books from Lake's building into the containers, which would be stationed next to Anguilla Rums Limited's blending and bottling factory in Sandy Ground, on NICA's property. This move proved to be a wise decision.

Anguilla Rums Limited, during the latter part of 2010, gave notice of the closure of their operations at the factory building leased from NICA in Sandy Ground and their planned relocation to Guyana. The closure of the Anguilla Rums Limited operation resulted in NICA losing approximately US$5,500.00 per month in rental income. The factory is now available for rent. The remaining Company land in Sandy Ground has a problem relating to encroachment by the Government cemetery. The company's lawyer is presently working with Lands and Surveys to resolve this matter.

Stewardship of the Board of Directors

Shareholders in a Special Shareholders Meeting held at the Stoney Ground/Orelia Kelly Primary School, had given approval for members of the Board of Directors to be paid a Director's Fee to manage the Company's affairs. The Board later decided to forego the fee and to use the Corporate Secretary to carry out a number of functions for the Company. It was decided by the Board to pay the Corporate Secretary for a limited time to ensure that some of the Company's critical and urgent matters could be dealt with. The Board has always been careful in the use of the Company's finances.

The Board found it necessary to have the Company's Accountant play a more pivotal role in guiding NICA to the point where it has reached presently. Records, in particular financial records, are now in order. Thirteen years of accounts have been audited and the office has found it necessary to employ a young graduate from the ALHCS to do some work in preparation for having the company's affairs placed online. Much work is needed to complete the proper transfer of shares from deceased persons to new shareholders and to new owners as a result of sales and other changes. It was perceived that with 13 years of accounts, it would not be cost effective to print booklets for distribution to all the shareholders. It is hoped that with a special resolution, the shareholders will allow the financials to be placed on NICA's web site for download by shareholders and to be transmitted via email by the Company Secretary to shareholders.

Looking to the Future

It is hoped that the upcoming AGM will be different from the most recent AGMs by being conducted in a civil and business-like manner. It is also hoped that positive attitudes and optimism for the long term future of NICA will prevail and that the meeting will end with shareholder decisions designed to chart NICA successfully into the rest of the 21st Century. The Company needs a skilled, effective and motivated Project Team to develop Gibbons. NICA also needs an effective Management Team to lead and direct business operations. It needs a dedicated and visionary Board of Directors to keep one and all focussed on the big goals, while working away on the details of day to day operations.

It is essential that appropriate and effective mechanisms are put in place for future success. Once they are in place and access to the necessary development and operating capital is achieved, the obligations of the Company will be met, the Company's corporate administration will be kept current and the financial statements and annual returns will be completed and filed in a timely manner. It is also hoped that in the not too distant future that NICA will be able to pay dividends to its mostly patient and long suffering shareholders.