NEWSDAY APRIL 04, 2 K 14 AG handling FCB IPO By JULIAN NEAVES and Clint Chan Tack Friday, April 4 2014 CABINET has referred the First Citizens Bank (FCB) Initial Public Offering (IPO) to Attorney General Anand Ramlogan. This was disclosed yesterday by Finance Minister Larry Howai to reporters at Piarco International Airport, after he joined other People’s Partnership parliamentarians there to welcome Prime Minister Kamla Persad-Bissessar home from Panama. Howai told reporters that the Price Waterhouse Cooper audit into the IPO was discussed at the weekly Cabinet meeting at the Office of the Prime Minister in St Clair, which was chaired by Labour Minister Errol McLeod, who was acting for Persad-Bissessar while she was abroad. Howai said Cabinet decided the IPO should be referred to Ramlogan for his consideration and any subsequent action. “The AG took charge of it. He is dealing with it fully,” Howai said. Stating the IPO is no longer being handled by his ministry, Howai said all further queries on this matter should be made to Ramlogan. Approached by reporters as he left the airport, Ramlogan declined to comment. “I’m late for a meeting,” he said as he was escorted to his waiting vehicle by his bodyguards. Meanwhile the board of First Citizens Bank (FCB) reported that group chief risk-officer, Phillip Rahaman, was fired after findings from an audit into the initial public offering (IPO) caused the bank to lose confidence in him. Rahaman, who purchased 659,588 shares in the IPO (costing $14 million) and then sold it on January 14 for a $12 million profit, was fired from the group on March 25. The FCB Board addressed the issue in a print advertisement published in newspapers yesterday. “After an extensive investigation, the Audit Committee presented its findings to the Board of Directors. The investigation revealed findings that resulted in a loss of confidence in, and subsequent termination of, the former Chief Risk Officer. Given the multiple ongoing investigations, it would not be appropriate for the Board to make any further comment at this time,” the Board stated. On Wednesday, Howai, reported that the PWC audit into the FCB IPO will go to Cabinet, and then to Ramlogan. In the statement the Board reported that the Government of Trinidad and Tobago owned 96.5 percent of the bank, and took the decision to divest approximately 20 percent of its shareholdings in an IPO. The allocation policy for the IPO of First Citizens was recommended by the Divestment Secretariat (Strategy Management Office) of the Ministry of Finance, and approved by the Cabinet, and this was the same model that was used for the IPO of National Enterprises Limited, an investment holding company operating on behalf of the Government. The Board also noted that the allocation policy and the IPO Prospectus were reviewed and approved by the Trinidad and Tobago Stock Exchange, and the Trinidad and Tobago Securities and Exchange Commission, prior to the offer being available to the market. “The approved allocation policy/prospectus did not include limits on employee share purchases,” the Board pointed out. The Board reported that, in accordance with the terms outlined in the IPO prospectus, employees could submit only one application for share purchases. All employees were given the opportunity to purchase 5,000 shares at a discounted price, and any amount in excess thereof at the standard offer price. “During the subscription period, due to the required confidentiality, the board had no oversight of the allocation process. Therefore, the board did not have any knowledge of the quantum of shares employees, or any other prospective shareholder, would receive,” the Board stressed. “As soon as the Board of Directors became aware of the former Chief Risk Officer’s purchase of significant shareholdings, it requested that the Audit Committee on the Board investigate the matter.” The Board reported that the Audit Committee conducted a full investigation into the allocation process for employee purchases, and the scope of the investigation was to “validate the integrity and soundness of the allocation process as per the allocation policy and identify any potential breaches of bank policy.” Following the findings of the audit, Rahaman was sacked. “The Board of First Citizens Bank continues to be committed to upholding the integrity of this institution, and is mindful of its responsibility to share relevant information with its employees, customers and other key stakeholders to ensure trust in our cherished institution is maintained,” the statement concluded. Questions have also been raised in this matter about the role played by Bourse Securities, whose managing director Subhas Ramkhelawan is an Independent Senator and chairman of the Stock Exchange. A relative of Rahaman is also employed at Bourse Securities.
Posted on: Fri, 04 Apr 2014 11:19:18 +0000