Monday, June 30, 2008

'Profits driving corporations'

Published: Monday June 30, 2008

INSTITUTIONAL INVESTORS are profit hounds willing to gobble up individual investors to accrue dividends and capital gains.

In fact, "profitability seems to count for more in Caribbean public companies than corporate governance, price of products, human resource development, and environmentally friendly plants and products," says Douglas Skeete, president of the Barbados Association of Corporate Shareholders.

He recently lashed out at dominant shareholders in the region at the Caribbean Investor Conference held at the Hyatt Regency Hotel in Port-of-Spain, Trinidad, and told BARBADOS BUSINESS AUTHORITY that the most small investors could do was try to protect their investment.

"There are few individuals in the Caribbean with the required financial resources to dominate and control the large public companies in the Caribbean.

"Consequently, we are likely to see a continuation of the situation where Caribbean multinationals preserve their role as dominant shareholders . . . ," Skeete told conference participants.

He said that by marginalising smaller counterparts, shareholders with at least 51 per cent of shares in a company were defeating one of the stock market's objectives – a more equitable distribution of wealth.

"This matter of marginalisation of small shareholders is an important one when one realises that the number of Barbadians owning shares in public companies in Barbados hardly exceeds 15 per cent of the population.

Skeete blamed "the mad rush by public companies to ramp up their size" on their strategy to handle global competition.

Source: Nation Newspapers

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