NASSAU, BAHAMAS- ArawakX, the country's first crowdfunding platform is defending its valuation methods as being based on "world-class standards" amid concerns by its regulator, slamming the winding-up application against it as "ill-conceived" and based on a false premise.
In an October 6th affidavit, Winston Rolle, ArawakX's Chief of Equities contended that the company has at all material times been driven by a "combination of world-class technology and qualified personnel."
Rolle noted, "In the absence of a Sandbox environment like other jurisdictions, the respondents' collaboration with regulators has resulted in modifications to the operationalization of the governing legislation. This was evident with respect to the investor onboarding process, moving from a multipage document and numerous attachments to a more streamlined process that reduced the time to less than seven munites."
He further noted, "The Respondent's issuer evaluation was based on world-class standards with a maximum scorecard target before an issuer could be considered for listing. This scorecard is an extended and localized venture capital-type scorecard with a focus on sustainability, growth and return for the investors. As many of the companies were start-ups or early-stage companies, the traditional valuation methods were not applicable. The respondent established a policy based on proven industry research, validated by the Harvard Business Review analysis of public company growth and valuation over a ten-year period. This was then compared to the traditional methods for further valuation."
Kenneth Donovan, the company's Acting CFO in an October 5th affidavit contended that the practices employed by the former CFO were in his opinion "inappropriate " for the type of business being operated and not sensitive to the operating cash position of ArawakX. Donovan claimed that he implemented various procedures including the daily reconciliation of bank accounts and daily executive reports on bank balances. He asserted that there was no co-mingling of client funds and that the Securities Commission had made unfair, unreasonable, and prejudicial representations to have the company wound up.
"The Respondent remains a viable company with significant commercial prospects that are being stymied by the applicant's oppressive and unreasonable eleven-month investigation as compounded by the present application," he stated.
The Securities Commission has filed a petition to wind up ArawakX, citing concerns about solvency, governance issues, and regulatory violations. A court hearing is scheduled for October 13th. ArawakX's Chairman and CEO, D'Arcy Rahming Sr., claimed a conspiracy to take control of the platform and called for an investigation into the Securities Commission's actions. The Commission, in response, revealed its investigation into ArawakX due to solvency concerns. The SCB has stated that it found substantial evidence to justify winding up the company, citing insolvency, governance irregularities, regulatory breaches, and possible criminal infractions.
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