FCB IPO

[kjaglal76]

But the big question is where does a Risk Manager working with FCB get his hands on $14MM to purchase these shares.

he cudda easily borrow that from a big boy padna

[pete]

Surely the special loan would have a cap. How much would you need to leverage a $14M loan? Could a teller there have gotten a $1M loan?

[antlind]

I guess that is why the rich get richer and the poor stay poor. Anyone who could get his hands on $14MM have to be living the good life. I struggling to get my hands on $14,000.

[cornfused]

This is but one question here :

Surely the special loan would have a cap. How much would you need to leverage a $14M loan? Could a teller there have gotten a $1M loan?

Surrounding this is the inequality that becomes apparent when employees don't take up the 5k offer . How many of FCB mangers were able to buy more than $1Mn in shares. This after some are reported to be limited by the company and not being able to buy as much as they wanted.

Bought at $20 sold at approximately $40. Well done, insider benefit maybe . How many employes were afforded this ?

[acesinghit]

The gentleman in question who purchased the $14M in IPO shares is FCB's GCRO (Group Chief Risk Officer) probably equivalent to a GM (General Manager) post. He reports to the deputy CEO and the acting CEO. They would have had to approve this before the purchase was final. I think the CBTT Governor and Minister of Finance ought to have known as well but this I cannot confirm.

As far as I see it, there was an opportunity and it was taken!

[kjaglal76]

I guess that is why the rich get richer and the poor stay poor. Anyone who could get his hands on $14MM have to be living the good life. I struggling to get my hands on $14,000.

shoulda study yuh book in skl

[Country_Bookie]

It’s possible that he didn’t borrow $14M from FCB. He could have borrowed it from another financial institution. They would not have a problem lending it to him once he pledged the shares to them as collateral, especially if they believed that there was no chance that the shares would drop to less than $19.80 (his purchase price) before they could be repaid.

Also possible that Gita Sakal is his GF, and she just had the money sitting in a drawer!

[ray d saint]

no loop holes!!

1. The individual in question made use of a financing facility afforded to him by a non banking financial institution.

2. The 5000 'min' that was placed for employees of FCB, simply means that, "up to the initial amount of 5000 shares the employee would pay the discount rate, however if the employee wishes to purchased more that the 5000, the amount in excess of the 5000 would be bought at the IPO rate of 22.00

3. No insider trading as this is an IPO and the shares are delivered via an allocation and or allotment basis and did not cross the floor of the TTSE.

As it was said before, a opportunity was seen and taken.

[kl122]

A lot of ppl here are jus vex dey didn't get to buy d shares lol ray is correct and when d audit is done everyone will know the truth, no way possible cud he have purchased the excess of 5k shares at the same price, he could not have only applied for 14m$ in shares , he would have had to applied for double that and only got a percentage i.e d 14m$ worth.... The excess of shares not allocated in the staff bucket was spilled over to the public bucket, that meant more shares were available for u dumbasses to buy...as to why employees didn't buy their 5k guaranteed shares is pure lack of investment knowledge as d bank offered 0% staff loans.... And by now dat loan wud have been paid off and pocket fat ... But carry on wid the usual careless ole talk it humors me lol

[zoom rader]

^^^ I dont think its a case of being Vex, its more of a case of knowing if you want to invest or pay down on a mass costume or buy the lateness blinged out vigo.

[ray d saint]

some more stats for the ones who missed out or jus misinformed.

- The IPO was over subscribed 3.125 times
- Employees took up 7.8% or the 15% available
- Nationals took 26.5%
- Pensions - 25%
- Mutual Funds & TTUTC - 20.7%
- NIB - 10%
- Registered Co's - 10%

[ray d saint]

IPO Details
48,495,665 shares at $22=$1.1B (20% of Government’s 100% stake)

Key Points
-12,435 applications for 151,557,147 ordinary shares
-Oversubscribed in its entirety with total subscriptions of $3.329 billion

[PapaC]

Took a look at the financial report for FCB for last year, and the share allotment for senior management and members of the board were published. The person in question just bought the most he could.

fcb.JPG

If you wait for the media to inform you then you will continue complaining how is coruption, but the man just made a good investment.

[jusjase44]

dam good investment, multiply that share holding by 1.09

[airuma]

The gentleman in question who purchased the $14M in IPO shares is FCB's GCRO (Group Chief Risk Officer) probably equivalent to a GM (General Manager) post. He reports to the deputy CEO and the acting CEO. They would have had to approve this before the purchase was final. I think the CBTT Governor and Minister of Finance ought to have known as well but this I cannot confirm.

As far as I see it, there was an opportunity and it was taken!

Just out of curiosity, exactly what is his role as GCRO? and is extracting 12M+ from the organization that you are responsible for protecting acceptable whether a loophole/ opportunity exist or not? Surely he can't say that he didn't see this risk becoming an issue. Furthermore, assuming that he has his position because he is qualified in the area of risk management, 14M is a huge risk to take and alot of liquidity for someone with knowledge of what to do with that $$. I can be certain that he was 100% certain of the outcome of his 14M investment since the 10% discount, according to another poster, did not apply to those shares in excess of 5,000. I don't know much about IPOs but I am of the opinion that organizations do this to make investments which are beyond their financial capacity. If this was the case, then this person did not help his organization along the way.
If anything, he may be the next Prime Minister or Attorney General since we as a country seem be convinced that a "sly man" is actually a "smart man" when in fact we fail to realize that we are just too stupid for our own good!

[antlind]

Posters have said that this trade is legit. But the optics of the matter do not benefit the bank nor the individual involved. As a financial institution FCB should be concerned of the publics view. Do you guys remember about a year ago several PWC Partners were named in a deal where it was claimed they purchased condos at a reduced rate? It turned out that the transaction was legit, but do you know that all of the partners involved were let go from PWC because of the negative publicity that they caused the company. Again....optics is important.

[Country_Bookie]

Lemme use a 2nr analogy for allyuh. Imagine a powerseller come here and offer airuma, antlind & ray each the chance to buy 10 iphones at $100 apiece. ray buys the 10 iphones but airuma & antlind decline the offer. ray then offers to buy the 20 iphones that were offered to airuma & antlind but not purchased and the powerseller agrees to sell them.

When ray resells his 30 iphones for $5,000 a piece, was he guilty of corruption & insider trading? Or is it that he took advantage of what he saw was a profitable opportunity, whereas airuma & antlind were not interested in making money.

[acesinghit]

I found Mr. Rahaman's background online, it appears he was employed with SBTT then left for FCIB and now to FCB.

See below:
H. Philip Rahaman has been appointed as the General Manager, Credit Risk Management, after
having returned from a one-year assignment at the Bank's Head Office in Toronto, Canada. In his
new capacity, he is responsible for maximizing profitable growth in both the commercial and
retail credit portfolios of Scotiabank Trinidad and Tobago Limited, its subsidiaries and affiliates
by proactively adjudicating on credit applications, assessing overall credit management, ensuring
the maintenance of high quality loan portfolios, and the delivery of service consistent with
ScotiaService standards to both internal and external customers.
Mr. Rahaman joined the Bank in 1996 as a Management Trainee and has served in successive
senior roles over the years, with the most recent being the Head of Finance and Treasury for the
Scotiabank Trinidad and Tobago Group. He is a graduate of University College Dublin, where
he obtained a Bachelor of Commerce Degree, with a major in accounting. He is also a Fellow
of the Association of Chartered Certified Accountants and holds a MSI from the Securities and
Investment Institute of London, as well as being an Associate of the Risk Management
Association. He is currently pursuing his Fellowship at the Institute of Canadian Bankers.
(21/9/06)

In some circles this Gentleman is considered one of the best in the industry.

[Redman]

This is worrisome to say the least.

With his position it is easy to believe that he had material nonpublic info on the client.
With the client(First Citizens) OWNING the broker (FCBAS) who would have advised on the volume of shares,IPO price/valuation,have every indication of the demand pre IPO and the orders post IPO,
Rahaman would have had access to all this info before hand.

To then take a massive amount of money-(3X the next largest officer of FC) and buy the IPO is really bordering on insider trading.
This would not go unpunished any where else.

[antlind]

Not Insider Trading. He did nothing illegal. It was all legitimate. Just that the numbers put him in a bad light. But hey, that's why the rich get richer. More power to him. Ah hope nobody doh decide to kidnap his arse now that we all know his worth.

[airuma]

Lemme use a 2nr analogy for allyuh. Imagine a powerseller come here and offer airuma, antlind & ray each the chance to buy 10 iphones at $100 apiece. ray buys the 10 iphones but airuma & antlind decline the offer. ray then offers to buy the 20 iphones that were offered to airuma & antlind but not purchased and the powerseller agrees to sell them.

When ray resells his 30 iphones for $5,000 a piece, was he guilty of corruption & insider trading? Or is it that he took advantage of what he saw was a profitable opportunity, whereas airuma & antlind were not interested in making money.

Very poor analogy on many accounts! Let me put this another way, Lets say Country_Bookie hired a security guard to protect his valuables from potential threats. One day Country_Bookie comes home tired and after talking to a neighbour over his fence wall, leaves an envelope with valuables on the wall. The guard only notices the envelope about 30 mins after Country_Bookie went inside. What is the acceptable thing for the guard to do?
1. Keep it safe for Country_Bookie
2. Convince himself that it's not his responsibility (on the fence) and take it for himself because somebody else might benefit from it.

His behaviour is of the nature of an autoimmune disease or parasite IMHO.

Question, could anyone in the General public (not an employee of FCB) get $14M in shares?

[zoom rader]

Men beating up cause a man make ah money legal the way. It was not only him that saw the opportunity others did it aswell.

[ray d saint]

Lemme use a 2nr analogy for allyuh. Imagine a powerseller come here and offer airuma, antlind & ray each the chance to buy 10 iphones at $100 apiece. ray buys the 10 iphones but airuma & antlind decline the offer. ray then offers to buy the 20 iphones that were offered to airuma & antlind but not purchased and the powerseller agrees to sell them.

When ray resells his 30 iphones for $5,000 a piece, was he guilty of corruption & insider trading? Or is it that he took advantage of what he saw was a profitable opportunity, whereas airuma & antlind were not interested in making money.

Very poor analogy on many accounts! Let me put this another way, Lets say Country_Bookie hired a security guard to protect his valuables from potential threats. One day Country_Bookie comes home tired and after talking to a neighbour over his fence wall, leaves an envelope with valuables on the wall. The guard only notices the envelope about 30 mins after Country_Bookie went inside. What is the acceptable thing for the guard to do?
1. Keep it safe for Country_Bookie
2. Convince himself that it's not his responsibility (on the fence) and take it for himself because somebody else might benefit from it.

His behaviour is of the nature of an autoimmune disease or parasite IMHO.

Question, could anyone in the General public (not an employee of FCB) get $14M in shares?

^^^^^^^ yes u could have! all u had to do was place a bid for shares in excess of the 14m and when allocation is made u get ur allotment.

[Conrad]

This is worrisome to say the least.

With his position it is easy to believe that he had material nonpublic info on the client.
With the client(First Citizens) OWNING the broker (FCBAS) who would have advised on the volume of shares,IPO price/valuation,have every indication of the demand pre IPO and the orders post IPO,
Rahaman would have had access to all this info before hand.

To then take a massive amount of money-(3X the next largest officer of FC) and buy the IPO is really bordering on insider trading.
This would not go unpunished any where else.

Trickidadians complain about corruption in public office but aren't ready to accept some of the basics of good corporate governance.

[ray d saint]

Men beating up cause a man make ah money legal the way. It was not only him that saw the opportunity others did it aswell.

We'll said!!!!

[Conrad]

Men beating up cause a man make ah money legal the way. It was not only him that saw the opportunity others did it aswell.

We'll said!!!!

Karen Nunez Tesheira saw an opportunity too

[kjaglal76]

some one else bought over 200k shares, nobody beating up

[ninjabilly]

Amazing ZR post without a reference to the PNM.

[airuma]

Men beating up cause a man make ah money legal the way. It was not only him that saw the opportunity others did it aswell.

We'll said!!!!

This is why we cannot progress! We seem to be incapable of thinking about the bigger picture and are comfortable with the notion that as long as we are not breaking any laws, we are not doing anything wrong! We absolutely subscribe to the "smart man" misnomer and continue to believe that if something is legal it must be ethical, or at least some posts in this thread suggest so.
My other questions, to ray d saint (since you seem to know much about this stock trading thing), what was the purpose/s of the IPO? did it serve the purpose/s? and if it did not serve the purpose/s, did Mr. GCRO (and others like him) contribute to it's failure?
I just hope the FIU and DEA are doing their checks with respect to how he got this $14M and I wonder if the bank is satisfied with his explanations of how he got it.

[Redman]

He would be guilty of Insider Trading if he did access info that was nonpublic.

His Job,access to info,position in the bank,the fact that the BANK owns the Broker that managed the IPO means that it is easy for him to access it. Did he???? Dont know and Dont care.
Could he have gotten preferential access to non public info-YES
Could he have known the IPO was under valued-YES
Could he have gotten preferential access to shares-YES
Could he have accessed preferential financing-YES


We need to develop rules that govern this LOCALLY.


There are strict controls on how officers of a co behave during an IPO -in developed markets.
Elsewhere if this were discovered he would be heavily sanctioned and investigated.

Not here.