BUSINESS PAGE is dedicated to providing objective information and issues of intrest to the business community and the public at large. The articles in Business page are prepared and contribuated by CHRISTOPHER RAM. Christopher Ram is the Managing Partner of Ram & McRae. Chartered Accountants, Professional Services Firm.

Introduction

Yesterday, our cricketers in whom Caribbean people express their collective dreams and who so often disappoint us finally came good to win the triangular one-day finals against India in Zimbabwe. While one-day cricket is often a matter of the tossing of the coin, a win is a win particularly when it is over a team that has just beaten you not once but twice. Business Page congratulates the team even though it is unlikely that in the midst of this rare opportunity for celebration any member of the team will be reading this column. Business Page today looks at the financial administration of West Indian cricket and touches on the wider issue of its management which over the past few months has witnessed the resignation of its president and vice-president and some troubling news about significant stock market investments.

The promotion

During the recent tour by South Africa, the WICB unveiled its strategy aimed at injecting fresh enthusiasm and blood in the game by an ambitious youth development programme and encouraging the supporters back into the stands and on their feet. With a spanking new cartoon character (Clarence the Crab) and a pumped up theme (Answer the Call) it expects that interest in the game would start building right here at home. You can judge for yourself the success of these initiatives by trying to recall the details of these efforts.

Kiddy Cricket, of which Clarence is the main attraction, focuses on the under 10-age group, the future of our game. This is no ordinary mascot. Developed in the studios of Walt Disney, Clarence has been with the team throughout the Caribbean and was not only entertaining the kids (and crowd too!) but teaching them the basics of the game too.

The character was developed mainly to galvanise kids to the game, especially in light of the growing popularity of soccer and the increasing threat of North American basketball in the Caribbean. In addition to the cartoon character, the WICB has been promoting several hot tunes to keep the cricketing crowds of the West Indies on their toes. 'Answer the Call,' 'Are you there?' and 'Our time, Our team' are being promoted by the board. The theme 'Answer the Call' was used in the recent SA visit.

The genius of Mr Lara

Unfortunately the genius of that other character Mr Brian Lara has not been able to help the senior team to recover from the depressing and prolonged slump which we have had to endure. In fairness to Mr Lara however, it has to be said that his colleagues in the team leave what is appearing to be an unbearable burden for him, and his fitness and lifestyle add to his woes. Meanwhile, consultants carry out studies to examine the failures both on and off the field and other consultants are appointed to examine why the recommendations and efforts of the first group did not produce the desired results! This is so similar to the case of bananas in the Eastern Caribbean that one has to be forgiven for thinking that it is uniquely Caribbean.

The board

Like so many of our regional organisations, the West Indies Cricket Board (WICB) of late was dominated by the character of its president. Its former president, Mr Pat Rousseau is no doubt an accomplished lawyer but his management expertise and style revealed some unfortunate weaknesses which did not win him many friends and which eventually cost him his reputation and the job. It is a measure of the manner in which the affairs of the board are managed that there is no one carrying out the functions of the president while the search for a successor goes on. Like so many regional organisations as well, insularity will dominate this process and it is a safe bet that the best person will not get the job.

The money

During the month of June, i.e. after his resignation, Mr Rousseau alleged abuse by two senior officers of the board. Chief Finance Officer Richard Jodhan and outgoing Executive Secretary Andrew Sealy came in for direct criticism from Mr Rousseau. The comments arose out of an investment on the American stock market apparently made by Mr Jodhan through stockbrokers Merrill Lynch. The WICB suffered the fate of many who believed that the US stock market would defy gravity and lost out on a significant investment. Did none of these committed regionalists think it would be a sign of its confidence in the region by investing those sums at home?

This disclosure caused the board to carry out an investigation which in a statement said that no evidence of dishonesty was found. This is a serious indictment of the entire board for it clearly demonstrates an absence of control. After all, it is not a matter of dishonesty but one of management. The board has employed expensive, professional management and ought not to tolerate this type of ineffective management. What does it say about the people who manage such large funds who need an investigation to discover that, "there was general agreement among board members during discussions of this issue that accountabilities and procedures within the WICB need to be fully documented"?

Such a statement makes one wonder whether there is a lack of governance procedures, so important for transparency and effective results in situations where assets are held in trust for the people of the Caribbean.

There are two issues surrounding this matter which are not entirely satisfactory. Mr Rousseau knew of the matter long before his resignation but chose to go public only after he resigned over another issue. The manner in which Mr Rousseau has chosen to disclose this matter does him no credit. The other issue relates to Mr Jodhan being appointed to the Management Committee after the adverse comments on the finance functions by the investigating committee.

Financial performance

The West Indies Cricket Board Inc. is not registered in any of its member territories but in the British Virgin Islands. This is probably for tax reasons but it is hard to believe that it could not obtain similar treatment in any of the member countries. Is there no sense of loyalty?

The audited financial statements for the year ended September 30, 2000 revealed a loss of US$5.4M compared with a profit of just under US$1M in the previous year. There was a dramatic fall in revenues from tours and tournaments (37%) while tour expenses fell by a mere 1 per cent. The statements which are audited by the international accounting firm of PriceWaterhouseCoopers is a model of stinginess of disclosure which is most inappropriate and for which our board's representative has to accept some blame. Does the board have no sense of duty to provide to the West Indian public information that allows it to analyse why with income of only US$9.4M we carry "indirect expenses" of US$8.1M?

Over US$5M was received as advances on a media contract with British Sky Broadcasting Limited, ensuring that the WICB ended its financial year with a positive cash flow. With its liabilities exceeding its assets by over US$2.6M, the WICB is not in a healthy financial position. Assets total US$6.6M while liabilities amount to US$9.3M. Significant assets include cash resources of US$3.4M, marketable securities of U$1.65M while a bank overdraft of US$1.3M, short?term liabilities of US$2.4M and deferred revenue of US$5.5M make up the liability side of the balance sheet.

Investments

The board doubled its investment in marketable securities during the period. US Government securities amounted to US$253K as compared to US$806K in the previous year, representing a decrease of 69 per cent. Investment in equities amounted to US$1.4M as compared to a mere US$14K in 1999. The risks in the board's investment portfolio is obviously high and although the auditors' opinion was issued in May 2001, the market value remains higher than the cost. It is not clear whether the decline in the equities markets mentioned above were taken into account in arriving at the market value at September 30, 2000.