IC: Hutchinson’s conduct harmed reputation of AAJ
The Integrity Commission (IC) has scolded Fay Hutchinson for breaching the conflict-of-interest policies outlined in the board charter and corporate governance guidelines of the Airports Authority of Jamaica (AAJ).
IC Director of Investigations Kevon Stephenson said Hutchinson was a shareholder in FirstRock Capital Holdings Limited while serving on the AAJ board when she voted in favour of the AAJ’s investment in the then start-up company.
She was appointed to the FirstRock Capital Holdings Limited board on March 4, 2020, while she was serving on the AAJ board as deputy chairperson.
“This conduct on the part of Mrs Hutchinson is egregious and has no doubt caused significant damage to the credibility and reputation of the AAJ,” Stephenson said in a report to Parliament, which was tabled on Friday.
He indicated that Hutchinson failed to formally advise the board of her personal investment in FirstRock Capital Holdings Limited at the point of being made aware of the investment opportunity.
The IC said that Hutchinson failed to then recuse herself from voting on any decision concerning AAJ and FirstRock Capital Holdings Limited in keeping with the procedures of the board charter.
“The foregoing is further aggravated by the fact that Hutchinson also served as a member of the finance committee of the AAJ board, the committee which made the recommendation for the acquisition of the shares in FirstRock Capital Holdings Limited to the full board,” the report added.
In his conclusions, Stephenson said that Hutchinson breached Section 17 of the Public Bodies Management and Accountability Act (2001).
He arrived at this conclusion on the basis that Hutchinson voted in favour of the acquisition of the shares and in so doing, inter alia, indicated to her colleague directors that she had invested in FirstRock Capital Holdings Limited.
“The foregoing raises concerns as to whether Mrs Hutchinson acted in good faith consistent with her obligations under the referenced provision,” he said.
He said the utterances of Hutchinson may have prejudiced or influenced the decision of the other board members to invest in FirstRock Capital Holdings Limited.
At the same time, the director of investigation concludes that the AAJ board, specifically the chairman, William Shagoury, failed to address the referenced conflict of interest concerning Hutchinson with the level of seriousness and urgency warranted in the circumstances.
“The director of investigation’s conclusion is premised on the pronouncement made by Mrs Hutchinson that she advised the board of her own personal investment of (US$100,000) in FirstRock Capital Holdings Limited at the joint board retreat,” said Stephenson.
Notwithstanding her indication, the director of investigation has found no evidence to suggest that any action was taken by the chairman – or anyone else – to engage the policies and procedures of the entity which were available to them at the material time with a view to managing or resolving the conflict-of-interest situation.
Stephenson noted that Norman Manley International Airport Limited (NMIAL) director Newlyn Seaton had declared a conflict of interest and recused himself, even though he had a less direct interest in FirstRock Capital Holdings Limited when compared with Hutchinson.
He indicated that the boards of the AAJ and NMIAL ought to have contemplated the need for formal declaration of conflict of interest and recusal on Hutchinson’s part .
The AAJ and NMIAL each acquired 14,259,000 shares in FirstRock Capital Holdings Limited during the period February 2019 to January 2020, at a cost of US$1,499,972. The total value of the shares acquired by both equated to nearly US$3 million.
Following a Gleaner exposé into the AAJ-FirstRock matter, Hutchinson and other members of the board resigned in November 2021.
Finance and the Public Service Minister Dr Nigel Clarke revealed in Parliament that the entities broke the law in their first of two investments because they did not get his ministry’s permission.
EDITOR’S NOTE: Mrs Fay Hutchinson has filed a lawsuit against The Gleaner Company (Media) Limited alleging that previous articles defamed her. Those issues have not been ventilated in this piece.