Howai seeks AG’s advice on FCB’s public offering transaction
By ANDRE BAGOO Thursday, March 27 2014
MINISTER of Finance and the Economy, Larry Howai, is to seek the advice of Attorney General, Anand Ramlogan, on the findings of an investigation by auditors into the First Citizens Bank (FCB) Initial Public Offering (IPO) transaction involving a senior officer to Cabinet before making them public, the Minister said yesterday.
Howai received a report from PricewaterhouseCoopers covering the audit of the IPO process and a forensic audit of specific transactions, which were part of that process.
“I have to present (the report) to Cabinet and receive their comments, especially from the Attorney General, and direction before coming out to the public,” Howai said yesterday when asked about the findings of the audit. The move to take the report to Cabinet raised the prospect of potentially higher-level changes at the bank, should Cabinet so decide.
After a full day of speculation, First Citizens Bank (FCB) on Tuesday announced that its Chief Risk Officer Philip Rahaman had been outright dismissed from his position after the bank’s board determined that they had lost confidence in his ability to carry out his duties.
The bank said the move came after an internal investigation, but did not specify what was the scope of that investigation.
“As a result of an extensive internal investigation carried out by First Citizens Bank, the chairperson and the board of directors reached a determination that they have lost confidence in its Chief Risk Officer’s ability to carry out his duties,” FCB said in a statement.
“Consequently he has been dismissed from his position.
“First Citizens Bank is committed to maintaining the trust of the public, and providing appropriate updates to its stakeholders. However, given the other ongoing investigations, it would be inappropriate to comment further at this time.”
Rahaman’s dismissal came after a $14 million share purchase of FCB shares in an IPO last year. That transaction was subsequently followed by a sale, which may have netted a profit of $12 million, according to some estimates. There was no reference to this transaction in the FCB statement.
The Securities and Exchange Commission (SEC) on Wednesday last confirmed an investigation into the transaction remained ongoing.
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.