Shareholder in Jamaican unit sues Cable and Wireless
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 from Jamaica.
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 benefit C&W.
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 Business.
"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.