Home' Trinidad and Tobago Guardian : April 4th 2014 Contents EXPECTANT NICOLE
Friday, April 4, 2014 www.guardian.co.tt Guardian
Plans by Government to intro-
duce a public offerings pro-
gramme to encourage wider pub-
lic participation in share
ownership have been put on hold
following the Initial Public Offer
(IPO) controversy at state-owned
commercial bank First Citizens,
a source told the T&T Guardian.
The sale of 634,588 First Citizens
shares by the bank s former chief
risk officer Philip Rahaman
exposed flaws in the process, the
Plans for the public offering pro-
gramme were outlined in a Sep-
tember 30, 2012, Ministry of
Finance memo which said the First
Citizens IPO would be followed
by another for the T&T Mortgage
Bank---a merger of the T&T Mort-
gage Finance Company (TTMF)
and the Home Mortgage Bank
According to that document, an
IPO was to be executed in the
amount of 20 per cent sharehold-
ing of First Citizens Bank and of
no more than 49 per cent of the
T&T Mortgage Bank. There were
also plans for a Phoenix Park IPO.
The plan was to "adopt an allo-
cation policy for promoting the
widest possible participation in
share ownership for each enterprise
for which shares are being sold on
the T&T Stock Exchange."
Locally based investment advi-
sory firms were to be retained to
assist the Finance Ministry in exe-
cuting the first wave of the pro-
A June 27, 2013, Cabinet minute
confirmed the commencement
date for the First Citizens IPO as
July 15, 2013 and trading in the
shares was set to begin on Sep-
tember 16, 2013.
The 48,495,665 shares offered
for sale were from Government s
96.5 per cent shareholding in the
bank and the purchase price was
set at $22 for one ordinary share.
Finance Minister Larry Howai
announced plans for the IPOs in
his 2013 Budget presentation.
According to the source, the
allocation policy adopted for the
IPOs was modelled after the
National Enterprises Ltd (NEL)
offering in 2001 and "was not
amended to meet modern exigen-
cies, including the amended Secu-
rities and Exchange Commission
"The said allocation policy is
the ministry s documented plan,
which was going to be used for
the T&T Mortgage Bank and the
Phoenix Park, had not Mr
Rahaman s trade revealed systemic
weaknesses in the ministry s desire
to promote the widest possible
participation in share ownership,"
the source said.
Rahaman s job was terminated
on March 25 when investigations
by the FCB board revealed that he
had sold all but 25,000 of the
shares he purchased in the IPO to
his nephew Imtiaz Rahaman, his
aunt Alia Rita Rahaman and five
family-owned companies, includ-
ing Rahamut Service Station Ltd.
Employees of First Citizens were
allowed to buy a specified mini-
mum allocation of 500 shares and
could purchase up to 5,000 at a
discount of ten per cent of the
offer price. There was no limit on
the number of shares an employee
could purchase overall.
However, the shares allocated
to employees were heavily under-
subscribed and only 3.7 million
shares were taken up, including
the 659,588 purchased by
Rahaman. In the end, almost 50
per cent of the shares were not
taken up by the employees.
Opposition MP Colm Imbert
says Independent Senator Subhas
Ramkhelawan should not have
been appointed chairman of the
T&T Stock Exchange.
The issue was raised last month
by Opposition Leader Dr Keith
Rowley and minority shareholder
activist Peter Permell after news
broke that First Citizens chief risk
officer, H Phillip Rahaman, bought
659,588 shares during last year s
IPO for about $14.5 million.
Ramkhelawan is also managing
director of the brokerage firm
Bourse Securities Ltd.
Speaking at a press conference
at the Leader of the Opposition
office, Charles Street, Port-of-
Spain, yesterday Imbert said the
current issue shows clearly that
politically exposed person as direc-
tor of the Stock Exchange. I think
that was an oversight. That was
Imbert said Ramkhelawan now
has "to defend himself against alle-
gations of conflict of interest and
allegations of a far more serious
Imbert argued that
Ramkhelawan "should not be in
that position. The chairman of the
Stock Exchange should not be in
a position where his brokerage
house could be investigated by the
Stressing that he was not casting
any aspersions on the Independent
senator, Imbert said it was a bad
move and he should not have been
called upon to investigate himself
as it was a very embarrassing
Ramkhelawan on Tuesday said
that as far as he was concerned
no laws were breached in the pur-
chase of the shares by Rahaman
nor did he believe his integrity
may have been compromised in
Imbert said the transaction
appeared to be in breach of the
Financial Intelligence Act and the
matter must be dealt with properly
by the Government, as confidence
remains essential to the success
of a bank and many shareholders
were very unhappy about the share
He added: "It is one of the few
institutions that lives or dies on
confidence. One of the things I
want to see is FCB get out of this
Imbert said the bank must be
willing to demonstrate to the public
it was willing to deal with the mat-
ter in "a responsible, fair and trans-
parent manner and they are not
engaging in any cover- up."
As a citizen he was calling on
the Government to do everything
to restore confidence in the bank.
"Do not sweep this matter under
the carpet," he said.
He noted that despite claims by
many, the law may have been bro-
ken by some in the purchase of
shares in First Citizens IPO.
(See Page A11)
Congress of the People leader
Prakash Ramadhar says it is time for
political parties to have a registration
process similar to businesses.
"We want to codify that (registra-
tion process) so it is operated like a
business, where you would have
accounts and everything, and the pop-
ulation would know who is going up
for election and who is funding them,"
He felt that would remove the sus-
picion that when political parties got
into power there was some sort of
payment for financiers.
"This is the openness and trans-
parency that we are all talking about,"
He envisioned a future where polit-
ical parties would be required to pub-
lish financial accounts for public
Ramadhar made the recommenda-
tion yesterday while speaking to media
moment s before he delivered a doc-
ument, called The People s Charter,
to the Elections and Boundaries Com-
mission, Frederick Street, Port-of-
The document provides recommen-
dations on a code of conduct for peo-
ple in public office.
Ramadhar said the issue of integrity
and conflict of interest was highlighted
in the document.
"When we take an oath in the Par-
liament as members of Parliament,
we take an oath to make decisions
without fear or favour.
"Outside of the Parliament we need
to, in our daily lives, be exemplars,"
Ramadhar said issues, such as man-
ners, aggression and the words used,
needed to be looked at.
He noted the protest outside Par-
liament last Friday, where Sport Min-
ister Anil Roberts chose to walk
through a large group of Opposition
supporters and was heckled.
He said: "That kind of mob-like
behaviour ought never to have hap-
"For too long the silent majority
feel that they have no voice and we
must give them that voice."
After fiasco at First Citizens...
Govt halts planned IPOs
Register political parties
Imbert: Wrong man heading Stock Exchange
Imbert quoted Section 136 (1)
of the Securities Act, which
says: "A person who is
connected to a reporting issuer
shall within five business days
of the day that he becomes
connected to the reporting
issuer file a report in the
prescribed form with the
commission disclosing any direct
or indirect beneficial ownership
of or control or direction over
securities of the reporting issuer
He said the law also says
anyone who fails to supply the
required particulars commits an
offence and is liable on
conviction on indictment to a
fine of $500,000 and
imprisonment for two years.
Imbert said the law also
provided for the individual who
may be holding an interest other
than as beneficial owner and not
reporting it to undergo a similar
penalty and for the bank and the
broker to have compliance units
to ensure due diligence before
the transaction was completed.
Nicole Dyer-Griffith, Inspector of Missions at the Foreign Affairs Ministry,
who is three months pregnant sports her baby bump outside Elections and
Boundaries Commission (EBC), Scott House, Frederick Street, Port-of-Spain,
before a meeting between Congress of the People (COP) members and
Election and Boundaries officials yesterday. PHOTO: MICHEAL BRUCE
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