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kaylex
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Re: FCB IPO

Postby kaylex » March 30th, 2014, 6:07 am

Rahaman sold shares to family
By BY Asha Javeed CCN Senior Multimedia Investigative Journalist
Story Created: Mar 29, 2014 at 10:05 PM ECT
Story Updated: Mar 30, 2014 at 12:05 AM ECT
On the morning of January 14, businessman Imtiaz Rahaman, chairman of Bourse Securities and the cousin of former First Citizens executive Philip Rahaman purchased 377,000 shares of the State banking group.
His mother, Alia Rita Rahaman, bought 33,000 FIRST shares.
Both Imtiaz Rahaman and his mother have the same Vistabella-registered address in their share ownership of First Citizens at the Share Register of the Trinidad and Tobago Stock Exchange (TTSE).
On that same day, five companies owned by the Rahaman family, which comprise the Rahamut Group, also bought blocks of FIRST shares:
• Rahamut’s Service Station, with a registered address of 1 Shafik Drive, Cross Crossing, San Fernando, bought 25,904 FIRST shares
• Olympic Manufacturing Ltd, with the same registered address of 1 Shafik Drive, Cross Crossing, San Fernando, bought 65,000 FIRST shares
• Caribbean Metal Industries Ltd, of the same address, bought 40,000 FIRST shares.
• Cedi Holdings Ltd, of same address, bought 48,229 FIRST shares.
• Olympic Rentals Ltd, of same address, bought FIRST 45,455 shares.
The total share acquisition, through seven trades by the Rahaman family and the Rahamut Group, in companies with interlocking directorates, on that January 14 morning was 634,588.
That was the day Philip Rahaman, former chief risk officer of the bank, disposed exactly 634,588 of the 659,588 FIRST shares he’d purchased during the company’s Initial Public Offering (IPO) on September 6.
“This was very sophisticated in its orchestration and implementation,” an industry source explained.
Rahaman, who had paid $14.5 million for the shares, sold the 634,588 shares for $26.7 million, making a profit of approximately $12.2 million.
In addition, he had also pocketed $718,950.92 in dividends from the bank in December.
Rahaman was fired from the bank last Tuesday following an internal audit by the bank on his purchase of 659,588 FIRST shares and the subsequent sale of 634,588 of those shares four months later. The bank said it had lost confidence in its chief risk officer.
He had acquired the shares from the undersubscribed employee bucket when the government divested 19.3 per cent of its stake in the bank.
Of the 48.5 million shares for which the stake amounted, 15 per cent was allocated to employees. First Citizens employees could acquire up to a maximum of 5,000 shares at a ten per cent discount of $19.80 (while the public was sold shares at $22) at a zero per cent interest loan.
The block of shares Rahaman had disposed of went principally to his relatives. Imtiaz Rahaman is the vice chairman of the Rahamut Group of Companies and chief executive officer of Ramco Industries Ltd.
Given that the public bucket was oversubscribed by nine times when the IPO was launched, the shares would not have been dumped onto the market in that bulk.
On January 14, the market spiked with the volume of FIRST shares traded. (See TTSE graph).
The TTSE recorded 646,214 trades at a price of $42.15. To date, it is highest volume of FIRST shares traded since the stock was launched.
“By the volume of shares which they have acquired, the group has become one of the largest shareholders of FIRST shares,” an industry source explained.
The transaction, the Banking and General Workers Union (BIGWU) alleges constitutes insider trading, has come under scrutiny given the position Rahaman held and how it was conducted.
It is the subject of investigations by the Securities and Exchange Commission (SEC), the TTSE and PricewaterhouseCoopers (on behalf of the Ministry of Finance).
The Central Bank’s Inspector of Financial Institutions Carl Hiralal has also written to the bank seeking answers from the Bank’s board and management on whether the transaction and Rahaman met the “fit and proper” test.
Last week, Finance Minister Larry Howai confirmed he had received a draft copy of the PWC investigation, which he said, “could be a criminal investigation at this stage”.
First Citizens chair Nyree Alfonso said yesterday she preferred to wait until the PWC report was completed and presented before she commented further on the matter. She observed that the board had taken swift action when wrongdoing was unearthed but that it would not be prudent to discuss the matter at this time.

Bourse Securities at the centre
Rahaman used Bourse Securities, at which Imtiaz is a former director and is now executive chairman, as his broker for his transaction.
The Sunday Express understands that in this transaction, Bourse was the broker for both parties—the buyers (the Rahamans and the Rahaman companies) and seller (Philip Rahaman).
Bourse Securities is headed by Subhas Ramkhelawan, an independent senator, who is also chairman of the TTSE.
The Sunday Express understands that for senior officers or directors who own shares, the sale of those shares has to be done in the open market and not by private treaty.
Rahaman’s sale price for his shares, the Sunday Express understands, was priced at $42.15, above the average $35 which FIRST shares were being traded on the market, which made it unattractive for other investors.
But it was picked up by his cousin and the family companies.
The sale was executed in the early morning as soon as the TTSE began trading that day, the Sunday Express learnt.
Contacted yesterday, on the facts unearthed in the Share Registrar, Ramkhelawan said he could not discuss matters with regard to client information.
“I cannot seek to break client confidentiality. I cannot comment on the trade or trades that took place with us,” he said.
The Sunday Express tried to contact both Imtiaz and Philip Rahaman through multiple phone calls, text messages and e-mails but was unsuccessful.
The Sunday Express also asked Ramkhelawan to request an interview with Imtiaz Rahaman on his family’s shareholding.
“I believe Bourse and (Ramkhelawan) have high standards that it adheres to, and I believe there has been nothing wrong done. I am sure this review (and those by other regulatory institutions) will do what is within their remit. I am confident when it runs its full course the answers will be clear. A lot of speculation and has not helped the process. I have confidence, confidence in financial services is important in process,” Imtiaz Rahaman had told the Express in an interview on March 18.

First Citizen’s Internal Audit
The volume of share purchases of Rahaman came under scrutiny during an audit conducted by the bank on the IPO Share Allocation for source of funds declarations.
The Sunday Express obtained a copy of the audit.
Rahaman had applied for his shares, about 17.4 per cent of the shares allocated to employees in July 31, 2013.
The audit, which was dated March 24 and and compiled by the bank’s chief internal auditor Anthony St Clair, noted that 1,073 employees subscribed for shares.
St Clair noted that with 70 employees subscribed for more than the allotted 5,000 shares with 39 of the 70 between 5,000 and 10,000 shares and another 19 between 10,001 and 20,000 shares.
There are now 11 employees (including CEO Larry Nath), as well as Rahaman, with over 20,000 shares.
“Based on our understanding of the allocation policy, all requirements were adhered with, it should be noted that there were no stipulations for a maximum allocation per individual,” St Clair said.
Under the heading “Policy Breaches” of the audit, Rahaman’s source of funding came into question.
“There were only two staff members who obtained debt financing from other financial institutions being Mr Larry Nath and Mr Hassan Rahaman. It was confirmed that Mr Nath made the relevant declarations as per the staff policy.”
It added: “To date, there was no evidence to support whether the required declaration as it relates to external financing has been made by Mr Rahaman. Checks on his employee file as well as with his direct report, Mr Nath, has not unearthed the required declaration to support the Bank Debt referred to in his source of funds declaration to support his subscription of shares.”

Who Funded Rahaman?
On January 15, Rahaman was questioned on his purchase and sale by chief executive Nath on the purchase and sale of shares.
In an e-mailed response, which was included in the audit, Rahaman explained:
“To confirm our discussions, the TT$14.5 million in funds raised was via a combination of personal/family funds and third party bank debt. These documents can be provided for your review, if required. Prior to acquiring the shares, however, the quantum that I was hoping to bid on was mentioned to Jason Julien for information purposes, as well as yourself.
“In addition, the sale of the majority of the shares at this point is threefold:
1. To reduce my portfolio concentration to this one stock.
2. To settle the outstanding debt incurred in the acquisition of the First Citizens shares.
3. To position myself to take advantage of two other investments that may provide a higher rate of return over the next few months, both of which are in the public domain.”

Nath, in forwarding the e-mail to the company’s auditors noted:
1. No declaration was submitted by Mr Rahaman with regard to his external borrowings.
2. No loan documentation, documentary evidence of external indebtness, quantum, breakdown, debt service obligation etc was provided despite the indication to provide the same. I was of the view that this e-mail was not sufficient and more information was required and I took up Mr Rahaman’s offer as below. He indicated that he did not see the need to lift this veil of privacy.
3. The mixture of funds below is similar to the verbal account given by Mr Rahaman and is the extent of the indication submitted regarding the source of funds.
4. Mr Rahaman did not provide prior notice (orally or written) regarding the quantum of shares purchased, I subsequently contacted Mr Julien, GM at First Citizens Investment Services, who confirmed that no such prior notice was provided to him as well.”
Julien declined comment to the Sunday Express on the matter.
But an industry source noted last week: “The question now is who funded him. Did he receive funds to buy the shares and then conveniently dispose of them to benefit certain parties? Those things need to be looked at.”
Finance Minister Larry Howai has said the SEC had hired a team of forensic investigators from Canada to investigate the matter.
While e-mail shows that the bank was aware of Rahaman’s sale on January 14, the bank did not meet its legal compliance with the TTSE Rule 604 that stipulates that shares traded by directors and senior officers be submitted to the institution within five days. The share sale was on January 14, the First Citizens Annual Report published on February 17 on the TTSE, and it was only on March 12 that First Citizens informed the TTSE that a senior officer sold 634,588 FIRST shares.

SEC Investigations
Rahaman is a registered broker of government bonds at the SEC.
He has been registered since March 18, 2011 under his legal name Hassan Philip Rahaman.
The Sunday Express understands that under the SEC regulations, he was expected to inform them of his share transaction.
The Sunday Express has learnt that the SEC is looking into Section 136 of the Securities and Exchange Act 2012 as it relates to Rahaman.
The act states: “A person who is connected to a reporting issuer (any of whose securities are listed on a registered securities market) 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 by him.”
The act also states that anyone who has “direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer by him and his associates changes from that shown or required to be shown in the report or in the latest report filed by him, shall within five business days from the day on which the change takes place, file a report of direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer by him and his associates as of the day on which the change took place and the change or changes that occurred, giving such details of each transaction as may be prescribed”.
Section 138 of the act states: “Any person who contravenes any section in this Part, or who, in purporting to comply with any section of this Part, makes a statement or files a report which he knows to be false, or recklessly makes a statement or files a report which is false, or fails to supply any particulars which he is required to supply, commits an offence and is liable on conviction on indictment to a fine of five hundred thousand dollars and to imprisonment for two years.”
Last week, chairman of the SEC Patrick Watson said that the transaction was a complex one and the first of its nature under his watch at the institution.
“While I would like the investigation to go fast, we have to ensure we get it right. It will take some time and we are looking at all sorts of things which are not in the public domain,” he said.

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kaylex
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Re: FCB IPO

Postby kaylex » March 30th, 2014, 6:08 am

This man outrageous…..
Bought way more than he entitled to..

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Re: FCB IPO

Postby shaneelal » March 30th, 2014, 7:08 am

kaylex wrote:This man outrageous…..
Bought way more than he entitled to..


There was no limit!!

However the plot thickens, don't think it was right that the family members bought it up on same day as he sold it, could be wrong.

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Re: FCB IPO

Postby brams112 » March 30th, 2014, 4:29 pm

Insider trading is what took place in Clico,everybody knew what was going to happen,that is why they tried to take out their money quick.Most of the workers in FCB were told by their foolish union leader not to buy into the bank they are working in.This guy maybe a seer man to know that the shares was going to skyrocket,that is why he took a chance,suppose the shares slid?would we have heard all the noise we are hearing now?.What we are hearing now is sour grapes,I am wondering if is just politics.
Anyway,when insider trading takes place you hear about shares being dumped quickly before a company goes belly up,that is if we hear about it at all.

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Re: FCB IPO

Postby bluefete » March 30th, 2014, 6:27 pm

acesinghit wrote:the other FCB executive may have to leave too since they fire HPR, jus sayin..

*whistles*


Not only them. The chairman of the TTSE has to go as well for allowing the stock exchange to be manipulated. And anyone else who had access to information the general public did not have.

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Re: FCB IPO

Postby Redman » March 30th, 2014, 7:40 pm

brams112 wrote:Insider trading is what took place in Clico,everybody knew what was going to happen,that is why they tried to take out their money quick.Most of the workers in FCB were told by their foolish union leader not to buy into the bank they are working in.This guy maybe a seer man to know that the shares was going to skyrocket,that is why he took a chance,suppose the shares slid?would we have heard all the noise we are hearing now?.What we are hearing now is sour grapes,I am wondering if is just politics.
Anyway,when insider trading takes place you hear about shares being dumped quickly before a company goes belly up,that is if we hear about it at all.


Uh No.

Insider trading is taking advantage of any material non public information by executing a trade.

profit of loss is not a benchmark.

in this case
FCB was the client coming public
FCB was the managing broker
His position as RISK OFFICER meant that he would be privy to ALL information on the IPO,the future of the bank etc.

That said everyone in the world except Cabrera could see that the IPO was a good buy.

Rahamans infraction would be
1) exploiting the unused portion WHILE possibly being funded by people not disclosed on his submittable
2)AND very stupidly crossing the shares all on the same day at a 20% premium to the market price.

The collusion between his cousins,the executing broker,and the board is what needs to be ventilated,investigated and where needed punitive measures taken.

The BOD should resign.

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Re: FCB IPO

Postby PapaC » March 30th, 2014, 7:43 pm

His third reason for selling the shares is very interesting.

"To take advantage of two other investment opportunities which are coming soon and are in the public domain..."

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Re: FCB IPO

Postby Redman » March 30th, 2014, 7:46 pm

Like he have the hook up for 24m worth of Pheonix Park on IPO.

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Re: FCB IPO

Postby PapaC » March 30th, 2014, 10:09 pm

Easy money.

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Re: FCB IPO

Postby kaylex » March 31st, 2014, 8:20 am

BTW…. ALL YUH FELLAS CASH OUT FROM FCB YET >

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Re: FCB IPO

Postby ray d saint » April 4th, 2014, 12:40 pm

Image

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Re: FCB IPO

Postby bluefete » April 4th, 2014, 4:50 pm

^^ Real backpedalling going on there.

Also saw one for Bourse Securities whose owner/founder is the Chairman of the TTSE.

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Re: FCB IPO

Postby PariaMan » April 4th, 2014, 5:10 pm

Public basket was 9 times over subscribed.

Employees basket was 15 % of total amount of shares.

Only 50 % of employees took up their offer.

Employees with money could therefore buy hundreds of thousands of shares!

Public therefore only received a portion of what they requested!

How could this fair and ethical?

Notice how the AG does be quick to say say nothing!

So we the public going into a next IPO without a report of what went wrong!

Willing to bet my life that no charges will be laid!

Look how much investigations we waiting on!

Steups!

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Re: FCB IPO

Postby pugboy » April 4th, 2014, 5:12 pm

All animals are equal, some are more equal than others

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Re: FCB IPO

Postby PariaMan » April 4th, 2014, 5:15 pm

Would not be surprised if Howai resigns it must be hard to be an honest man among a gang of thieves.

He obviously wants to make the report public but the AG protecting the gangs of thieves!

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Re: FCB IPO

Postby zoom rader » April 4th, 2014, 5:37 pm

PariaMan wrote:Would not be surprised if Howai resigns it must be hard to be an honest man among a gang of thieves.

He obviously wants to make the report public but the AG protecting the gangs of thieves!

Who are these gang of thieves and what have they stolen. Do provide evidence and not propaganda to back your claims.

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Re: FCB IPO

Postby PariaMan » April 4th, 2014, 7:23 pm

Stolen from Me and you .laws cannot cover everything . what he did was against the spirit of equitable distribution of the shares. The bank agreed hence the firing . he said he raised money from his family . thieves.bourse security who vacillated it thieves. The independent senator who delayed a report that legally due in five days took s month. All the other managers who bought hundreds of thousands of shares . thieves. Only in s banana republic

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Re: FCB IPO

Postby de_dougla_smurf » April 4th, 2014, 7:51 pm

nothing illegal here if money and party financiers involved.

ask Ish and Steve or Calder.

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Re: FCB IPO

Postby PariaMan » April 4th, 2014, 7:57 pm

Calder hart proven to be lying. investigating.no charge yet

Ish better to be tried in Trinidad. No trial yet.

All them false papers no charge yet.

Hundred s of questionable financial dealings reported to police no charge yet.

It will be a cold day in hell if anything comes out of this

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Re: FCB IPO

Postby de_dougla_smurf » April 4th, 2014, 11:56 pm

Sufferers will always beat up as they dont have the intelligence to make honest money like rahaman.

In other news, the AG say he was late for a meeting when asked about his progress on the case.


Perhaps he gonna read up on financial criminal law as he openly stated a while back that his expertise is in civil law...

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Re: FCB IPO

Postby PariaMan » April 5th, 2014, 8:14 am

de_dougla_smurf wrote:Sufferers will always beat up as they dont have the intelligence to make honest money like rahaman.

In other news, the AG say he was late for a meeting when asked about his progress on the case.


Perhaps he gonna read up on financial criminal law as he openly stated a while back that his expertise is in civil law...



Thats my problem no intelligence was needed for what he did. Everybody with simple common sense know that this IPO was a good idea to get involved in.

That is why it was 9 times oversubscribed.

He got his shares thru a loop hole which created a basket of 15% 0f the available shares for 1700 FCB workers. With no limits on how much an employee can buy.

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Re: FCB IPO

Postby trent » April 5th, 2014, 9:20 am

Redman wrote:Like he have the hook up for 24m worth of Pheonix Park on IPO.

what's the share price? anybody knows?

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Re: FCB IPO

Postby Redman » April 5th, 2014, 9:20 am

de_dougla_smurf wrote:Sufferers will always beat up as they dont have the intelligence to make honest money like rahaman.

In other news, the AG say he was late for a meeting when asked about his progress on the case.


Perhaps he gonna read up on financial criminal law as he openly stated a while back that his expertise is in civil law...


So honest that he resigned.

:| :roll:

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Re: FCB IPO

Postby Redman » April 5th, 2014, 9:22 am

trent wrote:
Redman wrote:Like he have the hook up for 24m worth of Pheonix Park on IPO.

what's the share price? anybody knows?


Heard SPECULATION that they might price it in the 20 s

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Re: FCB IPO

Postby de_dougla_smurf » April 5th, 2014, 9:47 am

Redman wrote:
de_dougla_smurf wrote:Sufferers will always beat up as they dont have the intelligence to make honest money like rahaman.

In other news, the AG say he was late for a meeting when asked about his progress on the case.


Perhaps he gonna read up on financial criminal law as he openly stated a while back that his expertise is in civil law...


So honest that he resigned.

:| :roll:


If you make 24 mil in one day, you might leave ur day job too.

Jus sayin...

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Re: FCB IPO

Postby Redman » April 5th, 2014, 10:00 am

Fair enough.
The profit was 12M-not 24.

Whats your rationalization for the Rahaman companies to be willing to buy 634 588 shares on the same day that Rahaman chose to sell 634 588 shares.

Oh and this was executed at $42 while the market price was $35.
So Rahaman companies were happy to pay 4.442M TTD extra than they had to-

All of this has been published.
Without any denials

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Re: FCB IPO

Postby desifemlove » April 5th, 2014, 10:01 am

UNC should have sold it all off. tell me why commerical banking need to be state-owned? Iz a public good like the roads or street lights?

UNC made this too complex. Simply make all current employees (doh matter if you is senior management right down to junior tellers and the cleaners) preferential shareholders. And make it open for all TT citizens to buy de rest (say $500 max per citizen). So employees get a higher dividend, and can influence policy if needed.

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Re: FCB IPO

Postby Country_Bookie » April 19th, 2014, 5:11 pm

Finally someone with common sense speaks:

There has been widespread negative comment since the news that an employee, Philip Rahaman, was able to buy a significant block of shares (659,588) in the First Citizens Initial Public Offering (IPO). The subsequent sale of the shares to Mr Rahaman’s relatives, or organisations owned by them, raised deeper questions on the role of the bank’s board. There have been two casualties to date: Mr Rahaman, whose employment contract with the bank has been terminated, and the managing director of the brokerage firm associated with the transaction, Subhas Ramkhelawan, who resigned as chairman of the Stock Exchange and as an independent senator.
Several newspaper columnists and shareholder activists have publicly called for the resignation of the board. I disagree. In my opinion, the board has done all that was required and has met all of its obligations and duties. I hold no shares in the bank. Neither I, nor any organisation controlled by me, has been paid to write this article, nor is there any arrangement, verbal or otherwise, to do so now or in the future.
My “contrary view” is based on the facts as I know them and on investigations I have made.
First, this was a sale of shares owned by the Corporation Sole (the Minister of Finance) not the bank. The allocation policy came from the minister, not the board. Fifteen per cent of the issue (7.3 million shares) was allocated to staff. Employees were allowed to buy up to 5,000 shares at a 10 per cent discount. Any shares above that limit were awarded at the full price and no cap was placed on the maximum amount of shares that could be bought by any one employee. These decisions were not within the purview of the board. Therefore, the board cannot be accountable for the loophole through which Mr Rahaman passed. A total of 1,073 employees bought 3.7 million shares and the unallocated portion in the employee bucket was re-allocated to individuals.
Second, the board’s responsibility for the sale is clearly stated in the directors’ report on page 90 of the prospectus. The report applies only to the financial statements, the projections, contingent liabilities and material statements and is supported by the opinion of other professionals as required by law. It does not extend to the allocation mechanism or subsequent share dealings. Further, oversight over the process was given to the IPO Steering Committee. The committee was led by a senior member of the bank’s management team, and consisted of Ministry of Finance representatives and professional advisers appointed by the ministry. The committee reported to the ministry, not the board.
Third, it is immaterial when the board found about the size of Mr Rahaman’s shareholding. There was no rule that prohibited Mr Rahaman from acquiring that quantum of shares. The only requirement after having made such a discovery would have been to ask management to ensure that Mr Rahaman complied with all the internal control disclosures and declarations with regard to his source of funds. As I understand it that certification was provided by Bourse Securities as the transaction was done by that firm. It is noteworthy that the ministry has delayed all planned IPOs.
Fourth, non-executive directors are governed by one key principle, NIFO — nose in, fingers out. Directors have an oversight role and make policy decisions. Management executes and notifies the board of variations which are unusual in principle, or outside the policy guidelines. The board could only have known of Mr Rahaman’s share sale when informed by the management of the bank. The board, especially the non-executive directors, can only do their job if executive managers do their job. Mr Rahaman sold his shares on January 14. The sale of shares was discovered by the non-executive directors in March and only as a result of queries raised by third parties.
Even if this is the first time there are shareholders other than the corporation sole, there ought to be a policy in place by which the corporate secretary reports changes in the share register quarterly. This is a clear failure of process. But the board made, or caused to be made, all the necessary actions when that omission was brought to their attention. It is noteworthy that the board terminated Mr Rahaman’s contract because of a “loss of confidence”. This phraseology has legal significance and indicates that there were more questions than there were answers. But the board made a decision.
The Minister of Finance commissioned a forensic examination into the transaction. I understand that the board has not seen the report and is unaware of its contents.
Financial systems require transparency and certainty of process to engender stability and confidence. It is important that the Securities and Exchange Commission (SEC), the regulator, be given time to do its job and its findings be adopted as part of the improvement to our institutional landscape. Where there are failures, the SEC must effect the necessary actions on the basis of the evidence. The country suffers from a lack of process and evidence-based decisions. Calls for the resignation of the board are at best premature and will have a negative impact on finding good candidates to serve on state boards in the future.
Even if the public is calling for blood, it would be wrong to fire the board because we wish to attribute to the board the “foresight” that can only come with hindsight.
* Mariano Browne is a
management consultant and a former government minister

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Re: FCB IPO

Postby zoom rader » April 19th, 2014, 6:28 pm

^^^ you really think tuners care about all that. Most here act on emotions with a view that he really scammed the system. Then again let them follow Rowley, rather than they beat up over it they should have invested rather than buy crims and rounds for the boys.

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Country_Bookie
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Re: FCB IPO

Postby Country_Bookie » April 19th, 2014, 6:41 pm

^Rowley should ask Mariano Browne 4 his advice on matters like this.

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