Yesterday was hailed as a new chapter in the business world as BGA and the Phoenix Group changed hands. The new owner, Wendall Brown, is described as a man of of vision and insight. Mairi Mallon reports The Bank of N.T. Butterfield and Son's Chief Executive Officer Calum Johnston has stated "categorically'' his bank has never been approached by any Government representative to finance the purchase of the Phoenix Group and Bermuda General Agency (BGA).

He also said he was "outraged'' at an article published in the Mid-Ocean News last week in which it was implied the deal had been done with the bank in exchange for political favours.

And he said they bankrolled the deal -- estimated to be worth well over $12 million -- on the merits of the business venture in which Ward Young sold the family business to black businessman Wendall Brown.

In an article in Friday's Mid-Ocean News it was implied that one of the banks (not naming the Bank of Butterfield) had been offered a "quid pro quo'' deal by the Progressive Labour Party Government.

The article said that any lifting of the 60/40 rule -- which limits the foreign ownership of local companies to 40 percent -- involved the "banks facilitating the fast-tracking of black Bermudian entrepreneurs who want to enter the traditionally white-dominated retailing and wholesaling mainstream''.

Yesterday the Bank of Butterfield responded strongly to the article, after refusing to speak on Friday.

The bank also arranged a Press conference yesterday to announce the deal between Mr. Young and Mr. Brown, but cancelled the event at the last minute.

It invited only photographers to take pictures of the deal being signed by Mr.

Brown and Mr. Young, issuing a written statement on behalf of the new business.

The statement said Mr. Young sold his family's company to Mr. Brown because he had a "brush'' with cancer and because no members of his family wanted to keep on the business.

The statement from the bank said: "With regard to the article in last Friday's Mid-Ocean News, substantially repeated in today's (Monday) Royal Gazette, Bank of Butterfield President and Chief Executive Officer Calum Johnston stated categorically that the bank was never contacted by the Government or anyone on the Government's behalf, with regard to any arrangement for financing the purchase of the Phoenix Group and BGA or any other business.'' Mr. Johnston is quoted as saying: "The transaction was authorised on its merits for the benefit of the vendor, the purchaser and the bank. Mr. Brown is a respected and successful businessman who owns several businesses. To categorise him as only someone who runs a betting shop is simply one more misleading impression to add to all the others in the article.

Bank expresses confidence in BDC2000 deal "I am shocked that a reporter would write such an article without contacting any of the participants in the deal and outraged that an editor would publish an article with such serious implications without any attempt at investigation and verification.

"The bank's involvement in this purchase simply reflects our belief in supporting the legitimate aspirations of members of the community.'' On Friday, Finance Minister Eugene Cox also categorically denied that a deal had been done with any of the banks in exchange for political favours and exemption of the 60/40 rule.

The article on Friday by veteran journalist Patricia Calnan, was headlined "Shock multi-million dollar BGA sale''.

Ms Calnan, who said her sources for the story were reliable and came from various sectors, reported that Mr. Young had sold the business which was founded by his family at the turn of the century for more than $12 million.

The story said that Mr. Brown ran a betting shop, and had an unnamed source stating the "deal was a curious one''.

It is believed Mr. Brown runs at least three very successful businesses -- the Sunshine Gas Company, Triple Crown Racing as well as the Sung Sing Chinese Restaurant, all located at the corner of Victoria and Court Street. He is also listed as incorporating a local company called the Corner Market Ltd.

Attempts to contact Mr. Brown by The Royal Gazette failed on both Friday and yesterday.

The Mid-Ocean also stated the "source'' said that the deal had received "huge'' financial backing from an unspecified local bank.

The source was quoted as stating: "It seems that this has been just one of several deals being pursued by the Progressive Labour Party Government as part of its determination that more major businesses come under black ownership.'' The article read: "The BGA deal is seen as just one thrust in efforts to diversify ownership of the local economy prior to a planned relaxation of the 60/40 Bermuda ownership regulations. The two main local banks -- The Bank of Bermuda and the Bank of N.T. Butterfield -- are in the forefront of efforts to achieve this. It is understood that the PLP Government's quid pro quo for any such lifting of the 60/40 rule involves the banks facilitating the fast-tracking of black Bermudian entrepreneurs who want to enter the traditionally white-dominated retailing and wholesaling mainstream.'' A statement released by Bank of Butterfield on behalf of BDC Ltd and C.T.

Famous Ltd yesterday said: "Today marks a new chapter in Bermuda's business world as the Phoenix Group and the BGA Group of Companies changes hands. Ward Young, President of BDC Ltd announced the purchase of BDC2000 (which holds the two companies) by C.T. Famous Ltd, owned by Wendall Brown. The transaction is structured by the Bank of N.T. Butterfield and Son Ltd.'' It quotes Mr. Young: "We have great faith in Mr. Brown's ability to take the company to a new level. We met with just a few prospective purchasers and it was only Mr. Brown who got the picture before we had finished talking. He has an insight and vision that is intuitive, exactly what the business needs to grow into the twenty first century.'' Commenting on why he decided to sell the business, he said:"After a 1995 brush with cancer, I decided to get my family involved in the business to give me more free time for personal endeavours. But because they were all settled in other jobs all over the world, they declined. It was then that I sought outside investors and talked to Wendall Brown. And the rest is history.'' The statement said that under the terms of the agreement Mr. Young would act as a consultant and remain on the board of BDC2000, now a subsidiary of C.T.

Famous Ltd.

The statement also said that Mr. Brown said that he had formed C.T Famous specifically for the purpose of the transaction and that he was pleased to have the opportunity to uphold the business' long-standing tradition of success in Bermuda. Mr. Brown expressed his appreciation to Bank of Butterfield and particularly to Bob Wilson of the bank's corporate banking group for his assistance in structuring the transaction.

The statement quoted Mr. Johnston as saying: "Bank of Butterfield believes that one of the main functions of a community bank is to marshall the savings of the community and to mobilise them in support of the legitimate aspirations of members of the community. We are pleased to facilitate the purchase of the Phoenix Group and BGA and look forward to continued growth.'' ON THE DOTTED LINE