Howai: Changes to Phoenix Park IPO
Sunday, March 30 2014
The investigation into the First Citizens’initial public offering (IPO) has forced Government to rethink the process on the upcoming IPO of National Gas Company’s 39 percent shareholding in Phoenix Park Gas Processors Limited (PPGPL), the first energy sector stock on the local stock market.
“We are making some changes to the allocation formulae,” Finance Minister Larry Howai said yesterday.
He said the Ministry of Finance had sent a draft prospectus to the Securities and Exchange Commission (SEC) to review and was rechecking the IPO document before it was sent to Cabinet.
“I don’t want to prejudge Cabinet but I think Cabinet may wish to see all the First Citizens issues sorted before they go ahead. “I don’t know, but we should be ready with this one as soon as we get the okay from Cabinet to proceed,” he said.
Speaking to reporters at the Eastern Credit Union’s 40th annual general meeting at the La Joya facility in St Joseph, Howai said he expects to get the auditor’s report on the First Citizens IPO process and a forensic audit of specific transactions report on Wednesday.
He said this final report will be sent to Attorney General Anand Ramlogan who would determine what information could be released without compromising the work of the Director of Public Prosecution if the findings result in further action.
Ramlogan already has a preliminary report on the bank’s IPO process. Howai, said the final draft of the report was currently in the hands of the auditor’s lawyers.
“There may not be any significant changes but we just wanted to be certain. They told me by about Wednesday I should have the final report so I am working with that time frame,” he told the media.
Former First Citizens group chief risk officer, Philip Rahaman was fired on March 25, 2014 after an “extensive external investigation” because the bank “lost confidence in his ability to carry out his duties.” Rahaman had purchased 659,588 bank shares costing $14 million during its IPO and sold 634,588 of those shares four months later on January 14, 2014 at a $12 million profit. In his address at the credit union’s meeting, Howai expressed confidence in TT’s economy, saying as a whole, it grew by 1.5 percent, largely due to the non-energy sector’s 2.5 percent growth.
He said foreign exchange results were at its highest level in recorded history exceeding US$10 billion, and that inflation was “well controlled” at 4.6 percent. He later told reporters that while business lending contracted yet again and liquidity in the financial system was still high, there was sufficient activity in the financial sector to feel comfortable about the economy’s trajectory for growth into the future.
He noted that businesses were using their own cash resources to facilitate expansion, and that the excess liquidity in the system will be used to finance local projects through the banks and other financial organisations with strong liquidity.
“Our main concern now is to make sure that inflationary pressures remain under control. If inflation rates continue to increase and if the Governor and the Central Bank feels it’s important at that stage then to start being more aggressive with tightening of liquidity, and moving interest rates, then we would have to look at alternative fiscal arrangements that we could put in place to help support the broad thrust of monitory policy and to ensure that the growth momentum continues,” he said.