Rahaman leaves FCB, $14M share report due today
By Andre Bagoo Wednesday, March 26 2014
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AMID an ongoing investigation by the Securities and Exchange Commission (SEC), First Citizen’s Bank (FCB) Group Chief Risk Officer Philip Rahaman – who was tied to a $14 million purchase of the State bank’s shares in an initial public offering – yesterday “demitted” the post, bank officials said.
The developments came as Minister of Finance and the Economy Larry Howai said a ministry investigation ordered by him into the transaction is due to be completed today. Howai said the ministry has employed the services of PricewaterhouseCoopers to complete the audit of the IPO process and a forensic audit of specific transactions which were part of that process.
“This audit is being conducted using PWC’s resources out of Canada and the Bahamas,” Howai said in a statement issued yesterday evening. He noted that enhanced powers have been conferred on the Securities and Exchange Commission under the new Securities Act 2012 and that the Commission has employed the services of experienced Canadian investigators to do a detailed audit of certain transactions to determine whether any criminal liability may exist, in relation to this and subsequent transactions. Howai said any action to be taken consequent on the report will be determined after a report on the investigation is laid before the Cabinet tomorrow. FCB board chairman Nyree Alfonso yesterday confirmed Rahaman demitted office but would offer no further comment on the circumstances of Rahaman’s departure, such as whether he was terminated, asked to resign or resigned voluntarily. “He demittted office effective today (yesterday),” she said. “A formal communication will be issued by the bank this afternoon. I will offer no further comment.”
A memorandum, with yesterday’s date, was also circulated by the Trinidad and Tobago Stock Exchange informing of a “significant change in management”. The memorandum read, “FCB informed the Stock Exchange that Mr Hassan Philip Rahaman, the Chief Risk Officer of the Bank is no longer employed with the Bank with effect from March 25, 2014 (yesterday).”
Rahaman’s departure comes amid an ongoing SEC probe into the purchase of the shares which were later sold – reportedly at a $12 million profit – on January 14. Earlier this month Minister of Finance and the Economy Larry Howai told the Senate that the transaction was being investigated by the SEC.
The SEC yesterday confirmed the investigation remains ongoing but offered no further comment.
FCB’s Group Chief Executive Officer Larry Nath could not be reached for comment.
The issue of the IPO transaction was first raised by Opposition Leader Dr Keith Rowley last month. Former SEC chairman and CEO Osborne Nurse stated the transaction did “raise his eyebrows”. At the same time, PNM Senator Faris Al Rawi has warned against the “good names” of banking officials being unjustly subject to conjecture in the absence of a proper investigation.
Though Rahaman has left the post in unclear circumstances, trade unionists yesterday issued a call for Alfonso to go as well.
“Apparently there was an audit by the bank and they found some gaps,” said Vincent Cabrera, the president of the Banking, Insurance & General Workers Union. “Our position is that the chairman must resign after defending this officer. Corporate social responsibility demands even higher standards than rules and regulations.”
In a press release Cabrera raised a series of questions over the transaction. These included: What is the source of funds of the money used to purchase these shares? Did the Compliance Unit at FCB fail to do its duty on a timely basis; and when did this high ranking official inform the Securities and Exchange Commission of this transaction?
Peter Permell, who described himself as a representative of minority shareholders of FCB, said the matter should not rest with Rahaman’s departure.
“Regardless of the reason(s) for his sudden departure, I am of the considered opinion that this matter cannot end with Mr Rahaman’s departure nor will it go away anytime soon,” Permell said.