Noble: Minding our business; how Massy’s performance affects everyone

Every child of a certain age would have grown up with a parent who taught them, “Drunk or sober, mind your business!”

The lesson being imparted was, “Do not get distracted. Stay focused. Do not get caught up with other people’s drama.”

 

Image: The lighter side of macoing.

The sound and fury around Massy’s encounter with former employee Angelique Parisot–Potter (APP) is an excellent example of being distracted from what is crucial.

This episode is not about rich people sorting out their differences. We need to understand that the debacle affects us all in our pockets. We need to look away from the excitable narratives that sell newspapers.


Which of us has not been affected by escalating food prices? We all struggle to pay our bills, buy groceries, and support our families.

Photo: A woman does her shopping at a supermarket.

Which of us has not been observing the shift in power between the independent supermarkets (Independents) and the Massy Stores chain, which is a part of the Integrated Retail arm of the conglomerate?

Massy made the subtle yet significant shift from being a retailer to a logistics-driven distributor in the food business. This business has become extraordinarily important, representing nearly half of the Group’s profit before tax, invested capital, and earnings per share. (Massy Annual Report 2023, p. 36 – 37).

But in so doing, they gave up being the neighbourhood’s favourite food store with a direct connection with farmers and customers.

What’s on the menu?

Have you observed that their fruit and vegetable offerings are now all pre-packed? This is the central packing station at work. Have you seen the product range being offered? It is mainly an inter-company business funnel.

This transformation has allowed the Independents to gain power in the retail space. The retail experience has significantly improved in those stores. Massy Stores no longer own the “Fresh and Clean” retail positioning.

Through clever location decisions, the Independents have checked the reach and influence of Massy stores. Have you ever thought about Xtra Foods’ location choices? Or JTA’s? Or Westbees?

An Xtra Foods sale.

The Independents can now increase prices and, at times, become just as expensive as Massy stores. This shows their increasing confidence.

We should be discussing whether there are limits to Massy’s growth in the integrated retail business. What drives volume in the retail trade? Is it the strength of a strong distribution chain or the allure of the physical stores and their tailored offerings?

If all the retailers go to the flagship food shows and sufficient capital is available, what will deliver the defining edge for the shopper?

A Massy Stores branch.

What retailing knowledge will Massy bring to bear on their recent USA acquisition? What does the rise of the Independents mean for us as weary grocery shoppers? Will strong retailing expertise, which is distinct from distribution skills, find a new prominence in the Massy domain?

These shifts in competitive strategies in the Trinidad retail business impose another concerning aspect.

The National Insurance Board (NIBTT) is a significant shareholder in Massy. This investment is probably ranked only behind their investments in financial institutions like Republic Bank.

The National Insurance Board logo.

NIBTT is a systemically important financial institution. Such institutions are described as “too big or important to fail”. However, the NIBTT has a billion-dollar financing gap (the difference between its contributions received and payments made).

One way it attempts to close the gap is to raise the retirement age. The other is to increase the contribution rates from the working persons. The performance of the equities it holds affects how it can close that gap.

Massy is an income stock, meaning its dividends are better than its peers. Should Massy’s performance falter, there will be a direct impact on the NIBTT’s investment portfolio’s ability to help with the billion-dollar gap.

Photo: A pensioner is lost in thought…

The NIBTT investment portfolio has been under pressure. The gap has caused the NIBTT board to dip into its investments to finance the shortfall. In 2016, that sum was $261.54 million, which then rose in 2022 to $1.259 billion.

In short, the objective of the investment portfolio now is to mitigate the fund’s liquidity risk and provide the necessary liquidity support to the National Insurance operations.

This potential impact should not escape our attention because of the shenanigans. We must mind our business.

Ex-Massy Holdings general counsel Angélique Parisot-Potter.

The battle royale between Icarus (Gervase Warner) and Don(na) Quixote (APP), superintended by a largely passive board, is not helpful to us as customers, shareholders, and retirees.

The board’s press release from their commissioned investigation left several unanswered questions. The potential loss of $100 million in the NiQuan debacle (Express, 28 April 2024) offered by APP gives a glimpse of a CEO who believed he could fly without restraints.

Perplexingly, Warner and the HR Head allowed the reported negotiations about Mrs Potter’s future in the organisation to span from 2019 to 2023. How is this explained?

Former Massy Holdings CEO Gervase Warner.

It does suggest a protected core of high-level employees, which, despite APP’s protestations, may have included her. Such a practice makes a mockery of the claim to practice conscious capitalism, which seeks to treat all stakeholders fairly.

“Conscious leaders emphasise a we rather than a me mentality to drive the business.”

APP’s response of “Poppycocks!” to a damning allegation about her demands on the organisation is equally baffling. As a lawyer, she must recognise the potential defamation (if the allegation is untrue).

A shopper peruses snacks at Massy Stores.

Then, there was a leaked video with more confidential information, including executive compensation details, that had nothing to do with the core charge of her whistleblowing expedition. Who could have the motivation to leak a video with an audio of insider information about the training?

While we do not have whistleblowing laws, these disclosures go beyond Rule 1.6 of the USA jurisdictions’ Model Rules of Professional Conduct.

In-house counsel can only reveal confidential or privileged information “to the extent the lawyer reasonably believes necessary… to establish a claim or defence on behalf of the lawyer in a controversy between the lawyer and the client.”

Ex-Massy Holdings general counsel Angélique Parisot-Potter.

The disclosures are broader than are necessary to support her initial claim of obeah and indiscriminate use of foreign exchange, neither of which are crimes.

In times of uncertainty, the role and prominence of a board and its chair increase. The continued frenzied trading of the Massy shares raises concerns about whether the company is in good hands.

This board has yet to reassure the general public and investors that there will be an uninterrupted vision and leadership flow. They keep chinksing. Can they steady the ship?

Massy Holdings chair Robert Riley.
Photo: Massy

They have compounded the error of not dealing decisively with APP as an employee from 2019 to 2023 by allowing the unfettered disclosure of confidential information. Why?

This tale demonstrates how rot seeps into our private sector. The vulnerable shoppers and the NIB retirees will pay the price.

“A force for good”? Spare us the rhetoric. We will drink our water and mind our business!

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