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Permell: Reverse sale of First Citizens shares

Wednesday, March 19, 2014

Minority shareholder rights advocate Peter Permell wants Prime Minister Kamla Persad-Bissessar and Finance Minister Larry Howai to order the immediate reversal of all transactions relative to the purchase and sale of First Citizens shares by that bank’s chief risk officer, H Phillip Rahaman. Permell is calling for all 659,588 shares be subsequently offered for sale to the public at the IPO price.


“I am persuaded that the Finance Minister does not need to wait for any detailed audit report to take action in this unfortunate situation as it is no different to what occurred in the 2007 purchase of seven million shares in the Home Mortgage Bank (HMB) at a cost of $110 million by former HMB chairman and then PNM treasurer, Andre Monteil’s firm, Stone Street Capital, except that the scale of that transaction was greater,” Permell said in a letter.


He said the action taken by then Prime Minister Patrick Manning, who concluded that the Stone Street transaction was conducted under  “questionable circumstances,” was to ensure the shares were transferred back to the HMB at the same price as the original transaction.


Permell noted that FCB is a majority owned state-enterprise governed by a board of directors that reports to the Finance Minister. He added that Howai has already stated that purchase of the shares for approximately $14.5 million is not in keeping with Government’s policy position of promoting the widest possible participation in share ownership, among the citizens of T&T.


“Based on the closing price of $42.15 per share on January 14 the said shares would have been sold for approximately $26.5 million and as such Mr Rahaman would have benefited from a profit of approximately $12 million,” Permell wrote.


“Both FCB and the TTSE were aware or ought to have been aware of the concerns being expressed in the public domain for several weeks now in respect of the said shares, that the Finance Minister had ordered a forensic audit into this matter, that the rules of the TTSE require timely disclosure within five business days of such transactions, however in this particular case the information was only posted on the TTSE Web site on March 12.”


Permell said the public perception is that FCB officials facilitated the transaction by failing or refusing to exercise their “full and unconditional right to accept or reject” any application in whole or in part in accordance with the terms of their own prospectus.


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