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Should Phoenix Park IPO be delayed?

Thursday, April 17, 2014
BG View
Finance Minister Larry Howai

On March 29, speaking to reporters during a break in the Eastern Credit Union’s 40th annual general meeting (AGM) at the La Joya Sporting Complex in St Joseph, Finance Minister Larry Howai said three things that are important to the timing of the Phoenix Park initial public offering (IPO):


 Changes would be made to the company’s IPO allocation formula because of the significant issues raised by the Phillip Rahaman affair


 The draft prospectus for the Phoenix Park IPO had been completed and dispatched to the Securities and Exchange Commission (SEC) for review and should be ready by the end of April


 Cabinet may wish to see all the First Citizens issues sorted out before moving on to the Phoenix Park IPO


Now, this column has no issue with the first point made by Mr Howai—as it is clear that future IPO allocation processes must contain more rigorous protection mechanisms to ensure that they are not only fair and equitable but are seen to be fair and equitable. 


But the entire investing public—which includes individuals, institutions, such as the NIB, mutual funds and pension plans, as well as companies—should be concerned with the Minister of Finance’s suggestion that the SEC could complete its review of the Phoenix Park prospectus by early May but the actual IPO could be delayed for months if not years.


How else is one to understand Mr Howai’s statement that Cabinet may wish to see all the First Citizens issues sorted out before moving on to the Phoenix Park IPO?


What are all the issues that, in Mr Howai’s view, Cabinet may wish to see sorted out before the next IPO? 


Is the honourable minister referring to legal issues and, if he is, would those issues be deemed as having been “sorted out” when the SEC’s investigation of the Rahaman affair is completed and the file handed over to the Director of Public Prosecutions (DPP) for his determination? 


Or would the issues be considered to be “sorted out” at the end of whatever procedure the DPP opts to trigger?