08 January 2018
| James Pearce
A shareholder in Cable and Wireless's Jamaican arm has launched legal action against the firm, claiming financial transactions to its parent company have impacted the regional unit.
Eric Jason Abrahams holds 60 million shares in Cable and
Wireless Jamaica (CWJ) but is seeking to launch derivative
action against C&W in a Florida court, according to reports
The action would be in the name of and on behalf of CWJ,
alleging that both the parent company and some of its directors
both past and present acted in breach of fiduciary duties to
Abrahams is seeking $500 million in assets to be returned to
CWJ’s books, the Jamaica Gleamer claims, citing
his legal team. The lawsuit would help boost the value of the
local unit, argues Abrahams in a filing.
"If the derivative claim is successful, the directors and/or
CWC UK will likely be required to pay hundreds of millions of
US dollars to CWJ," wrote Abrahams’ legal team
from Hart Muirhead Fatta in a letter seen by Gleaner
"Quite clearly, this will materially affect the value of the
company's shares. In our opinion, the existence of a lawsuit
designed to restore hundreds of millions of dollars of value to
a public company is highly material and price sensitive - yet,
CWJ has not so far seen fit to disclose the information to the
market," the law firm said.
CWC CALA and affiliate Kelfenora Limited together hold 82
per cent of CWJ, which trades as Flow Jamaica. CWJ says it
intends to vigorously oppose the application when it comes up
for hearing on April 19 this year.
Liberty Global, which acquired Cable and Wireless
Communications in 2016, has made an offer of $1.45 per share to
buy all minority shareholding in CWJ, with the offer due to
close on 31 January.
Cable and Wireless,