The pro­posed hos­tile takeover of re­gion­al con­glom­er­ate Las­celles de­Mer­ca­do is be­ing in­ves­ti­gat­ed by Ja­maica's se­cu­ri­ties reg­u­la­tor, the Fi­nan­cial Ser­vices Com­mis­sion, Las­celles chair­man Ger­ald Yet­ming said yes­ter­day. Speak­ing on CNC3s morn­ing show, Yet­ming, who al­so chairs the CL Fi­nan­cial board, said the hos­tile takeover of­fer was "de­fi­cient" in many re­spects and that "those mak­ing the of­fer were privy to in­sid­er in­for­ma­tion" which was be­ing "probed by the FSC in Ja­maica. Black Sand, the group mak­ing the hos­tile takeover bid, is led by William Mc­Connell, who was the man­ag­ing di­rec­tor of Las­celles un­til his re­tire­ment on June 30.

Black Sand pub­li­cised its first takeover of­fer on Ju­ly 28, less than a month af­ter Mc­Connell's re­tire­ment and on the third an­niver­sary of the clos­ing of the CL Fi­nan­cial ac­qui­si­tion of Las­celles. CL Fi­nan­cial, which was then run by its founder Lawrence Duprey, ac­quired Las­celles by pay­ing a to­tal pur­chase price of US$676 mil­lion. CL Fi­nan­cial owns 86.87 per cent of the or­di­nary shares of Las­celles, whose main as­set is the rum-pro­duc­ing com­pa­ny, Wray & Nephew with its in­ter­na­tion­al­ly know brand, Ap­ple­ton.

While CL Fi­nan­cial paid US$8.10 an or­di­nary share to ac­quire Las­celles, Black Sand is of­fer­ing to buy back Las­celles for US$3.86 a share.

In or­der to fi­nance the trans­ac­tion, CL Fi­nan­cial raised US$342 mil­lion by is­su­ing short-term notes to in­vestors in Ja­maica and T&T. CL Fi­nan­cial has been forced to resched­ule pay­ment on the notes on three oc­ca­sions and Yet­ming ad­mit­ted on CNC3 yes­ter­day that the Port-of-Spain-based con­glom­er­ate had de­fault­ed on the US$320 mil­lion oblig­a­tion. Mean­while, Ja­maica's Fi­nan­cial Ser­vices Com­mis­sion, which re­fused to com­ment on the re­ports of the in­ves­ti­ga­tion in­to Black Sand, is­sued a pub­lic no­tice on Wednes­day stat­ing that the Black Sand takeover bid cir­cu­lar was now com­pli­ant with Ja­maica's Se­cu­ri­ties (Take-Overs and Merg­ers) Reg­u­la­tions, 1999.