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Another sale of First Citizens shares

Shareholder activist calls for probe
Wednesday, June 18, 2014
Minority shareholder activist Peter Permell, right, congratulates First Citizen’s new chairman Anthony Smart, left, following yesterday's special meeting of shareholders at Queen's Hall, St Ann's. Looking on is Group CEO Larry Nath. PHOTO: MICHEAL BRUCE

Minority shareholder activist Peter Permell yesterday called on the new board of First Citizens to deal with the reported purchase of 458,274 shares in the bank by Chanka Seeterram, father of  the bank’s former deputy chairman, Anil Seeterram. 



“The issue is Chanka being a relative of Anil who is defined as a connected party in terms of the Securities Act 2012. It means that all the rules that apply to Anil Seeterram would also apply to Chanka Seeterram,” he told reporters after a special shareholders meeting at Queen’s Hall to elect the bank’s new directors.



Permell referred to the reports that the elder Seeteram sold the shares by September 30, less than a month after they were allocated to him, and earned $6.4 million on the transaction. He suggested that Seeterram sold his shares by that date so it would not show up in the bank’s annual report.


“Remember it is the annual report we went to first for the information about Philip Rahaman, former risk officer of FCB and the shares he bought. Unlike Rahaman, who got those shares from the employee bucket which had excess shares, Chanka Seeterram was not an employee so he should not have got any shares from that employee bucket,” Permell said. Anil Seeterram reportedly claimed he was not aware of the transaction by his father until last December.


Newly installed chairman of First Citizens Anthony Smart said the fact that some 12,000 citizens became shareholders through the initial public offering (IPO) is evidence of the confidence people have in the bank. “We will work pretty hard to make the confidence even greater,” he said shortly after he was officially appointed to the position yesterday. 



Smart, who served as this country’s attorney general in the NAR administration of 1986-1991, replaces attorney-at-law Nyree Alfonso, who retired from the board at the bank’s annual general meet­ing on May 12. Smart told reporters after the meeting he wants to see the board adhere to strict ethical guidelines and good corporate governance. He said although there was negative fall out for First Citizens in recent months everything will be “corrected”. He expects the IPO to be the first item dealt with by the new board.


At the bank’s last AGM, Finance Minister Larry Howai’s representative, Vishnu Dhanpaul, voted out two directors, Sho­bee Jacelon and Marlene Juman, and indicated that Corporation Sole would not support Alfonso or Rishi Baddaloo to return to the board. 



The change in the bank’s directors came months after a controversy over its IPO and Rahaman’s purchase and sale of a substantial amount of shares. Howai ordered an investigation, which is still ongoing, into the circumstances of Rahaman’s purchase and subsequent sale of shares. Rahaman spent $14.5 million to acquire the shares, then sold 634,588 of them on January 14, making a profit of over $12 million inclusive of $718,950.92 in dividends. The transaction was allegedly brokered by Bourse Securities. 


The shares were sold to Rahaman’s cousin Imtiaz Ahmad, his aunt Alia and five companies owned by the Rahaman family. Rahaman was later fired by the bank. Another casualty of the IPO controversy was Subhas Ramkhelawan, managing director of Bourse Securities, who resigned from his positions as an Independent Senator and chairman of the T&T Stock Exchange (TTSE).


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