Banks DIH
Editorial
When Peter d'Aguiar founded Banks DIH Limited as a public company in l956 he touted it as an example of people's capitalism whereby the small man would be able to have a stake in major companies by virtue of the shareholding mechanism. He would have been delighted to know that after recent share issues Banks DIH Limited now has ll,507 shareholders of whom 7l3 are employees, about half the employment force. The company has been a shining example of what private enterprise can achieve and shareholders have benefited over the years from good dividends and several bonus share issues. Chairman Clifford Reis correctly described it now as a national institution which makes a substantial contribution, $l.7 billion last year, to national revenue. The company raised $426.5m in a share issue late last year of 30,000,000 ordinary shares with a nominal value of $l.00 to shareholders at $l4.00 and the public at $l6.00. The offer was oversubscribed. If we treat the value of the shares as at least $l6.00 (independent accountants had estimated $20 -$25) then the yield last year on a total dividend of 45% would be about 3%. The shareholders also accepted the directors recommendation for a l for 2 bonus issue based on the capitalisation of part of the amount standing to the credit of General Reserve from which the new shareholders benefited. Dealing at some length with the offer by what he described as "the bullish company" to pay $9.50 for a Banks DIH share he questioned how this price had been arrived at. He examined some of the considerations that should be taken into account in share valuation and called for stock exchange legislation to protect the small shareholder. The Chairman referred in his report to the shareholders to the upgrading of equipment for the company's core business, continued diversification (premium beer and the proposed Sheriff street Quik Serv) and expansion (new branches and outlets). The company has also pioneered housing programmes for employees including D"Aguiar's Park at Houston. There is, too, a sophisticated employees share ownership scheme and D'Aguiar Memorial Scholarships for future employees to attend university. The Chairman complained of the high taxes on beer compared to rum. He also pointed out that flour could be imported much cheaper from Trinidad and said that the high price of local flour had severely affected the company's biscuit sales. Why is the Ministry of Finance refusing permission to import flour? Is that compatible with regional free trade? Without the long digression into state control of the economy that has contributed so substantially to our present plight Guyana could have had, by now, some forty years after Peter D'Aguiar first took the plunge, l00 Banks DIHs. Peter d'Aguiar himself had many other plans which he abandoned. We could now have had an economy at least on par with our Caricom sister countries, given our natural resources. We have learnt our lesson the hard way and a large part of the former business and managerial class is in exile. That is why rebuilding will not be easy. What we need now is to encourage more entrepreneurs and more investment, as quickly as we can. 
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