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Once a catalyst, underperforming miner needs one now
When the recent proxy fight broke out over CP — whose repercussions continued this week with the resignation from the CP board of Rick George — my colleague Terence Corcoran cited another all-too-rare example of a catalyst investor taking on the Canadian corporate establishment. It was Ian “the Smiling Barracuda” Delaney’s successful 1990 fight for control of Sherritt, an historic but failing fertilizer and nickel-refining company based in Fort Saskatchewan, Alta.
In fact, the CP link doesn’t end there. Mr. Delaney subsequently guided Sherritt into Cuba, where he declared that he would make the company the island’s answer to … CP! Unfortunately, he spoke truer than he knew. Although Cuba now accounts for only a fifth of its assets, Sherritt has been a less than stellar performer over the past two decades. Meanwhile Mr. Delaney’s adventures as Fidel Castro’s “favourite capitalist” remain one of the more controversial aspects of the company’s recent history.
After Mr. Delaney expanded his Cuban ambitions to embrace a joint venture at Moa Bay, a cucaracha appeared in the ointment in the form of Helms-Burton, U.S. legislation that allowed its citizens, including naturalized Cuban-Americans, to sue anybody “trafficking” in assets expropriated by the 1959 Castro revolution. That included Moa Bay. The right to sue has been suspended by presidential decree ever since, but Mr. Delaney — who remains Sherritt chairman — is still not permitted to enter the U.S.
Helms-Burton came on top of the 1960 U.S. embargo, which has increasingly been seen as a tactical error by the U.S., since it provided Cuban apologists with a ready-made excuse for the island’s disastrous centrally planned economy.
During the Trudeau era, Canada had an ardent love affair with the Castro regime. The dictatorship has since become less fashionable in left-liberal circles, although radical environmentalists such as David Suzuki continue to celebrate the island’s small carbon jackboot print.
One suspects that Stephen Harper never had pictures of Che Guevara on his dorm wall. Earlier this year he attracted criticism from a chatter of caudillos at the Summit of the Americas when he joined President Obama in vetoing an invitation to Cuba to join the next summit. Mr. Harper is likely a good deal more genuinely ideologically opposed to the Castro regime than Mr. Obama, whose main consideration is the powerful Cuban exile constituency in Florida. Indeed, when Mr. Obama came to power he promised to ease relations with Cuba. Nevertheless, the embargo has stayed, and Mr. Harper has made clear that Canada still does not support it.
For the rest of this article, please go to the National Post website: http://opinion.financialpost.com/2012/06/28/peter-foster-sherritt-as-cubas-cp/