There has been widespread negative comment since the news that an employee, Phillip Rahaman, was able to buy a significant block of shares (659,588) in the First Citizens Bank IPO. The subsequent sale of the shares to relatives, or organisations owned by relatives, raised deeper questions on the role of the board.
There have been two casualties to date: Mr Rahaman, whose employment contract with FCB has been terminated, and the managing director of the brokerage firm associated with the transaction, Mr Ramkhelawan, who resigned as chairman of the TTSE and as an independent senator. But the issue refuses to go away.
Several newspaper columnists and shareholder activists have publicly called for the resignation of the board. I disagree. In my opinion, the board has done all that was required and has met all of its obligations and duties. Before I go further, let me say that I hold no shares in FCB. Neither I nor any organisation controlled by me has been paid to write this article, nor is there any arrangement, verbal or otherwise, to do so now or in the future.
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