Former minister of planning, restructuring and gender affairs, Mary King is calling on the Integrity Commission (IC) to conduct an investigation into the purchase of $14.5 million in First Citizens Bank (FCB) shares by the bank's group chief risk officer Phillip Rahaman.The 659,588 shares were acquired in FCB's initial public offering (IPO) last year.King, an economist, urged the IC to step in and hold its own inquiry, as people on FCB's board are members in public life.
"I think the Integrity Commission has a part to play so they can also bring information to the public."Following calls by Opposition Leader Dr Keith Rowley for a forensic audit, Finance Minister Larry Howai announced a full review of the bank's IPO process."This is not a $2 issue. This involves million of dollars...under question and until that investigation is completed and made public, I think the gentleman knows what he has to do.
"If an investigation is in place, you who are so involved, you step aside and don't say anything about the topic until the investigation is complete."King said the matter will no doubt erode public confidence in FCB. FCB, she said, was formed for a purpose by the Government."I think the people at the helm have disappointed us. It must look bad for the Government. The investigations are taking too long. That is what is worrying to me. I want the analysis finished and the report laid."
Clary Benn: Why no red flags?
Former chairman of the Unit Trust Corporation Clarry Benn said any time questions are being asked about "this perceived Caesar wife, it means not only the individual is tarnished, but its institution."Benn said employees and management of all banks must display an aura of incorruptibility."They must be a cut above the rest."He said any time "an uncharacteristic transaction goes through," it must raise eyebrows, and questions should be asked before the processing of application and allocation of shares take place.
"I would imagine there was a team looking and reviewing applications and the allocation process."Asked if the purchase looked like insider trading, Benn said "the public would get that impression. Or something wrong was allowed to happen."In Rahaman's case, Benn said, his application should have been properly scrutinised "to ensure that it could never be perceived as some favourable, corruptible and advantageous allocation was given."
Benn said the purchase should imply that no "underhand deals were struck."
'It can taint potential IPOsby state agencies'
He said the last impression the bank should give was that staff members used their position to get a significant number of shares."It is shocking that this transaction could have occurred at this very first IPO issue of the bank, and first IPO of the Government seeking to broaden share owners to the public. This can taint any other potential IPOs to be undertaken by state agencies."Benn said the minute the bank made the discovery, they should have called for an internal investigation to determine if there was any collusion.
"If it goes contrary to the bank's standards, action would have had to be taken."
Browne: Many questionsto be answered by FCB
Former minister in the ministry of finance Mariano Browne said one would have to know FCB's internal rules before Rahaman is suspended.Browne said many questions need to be asked and answered.
"Publicly, I remember Ms Alfonso indicating that the employee share holding aspect was undersubscribed and as a result of which shares were re-allocated. There should be some level of accountability with regards to that process because it would have to be undersubscribed by a substantial amount for one manager or some managers to get a significantly larger percentage than they would be previously allocated."
Browne said there should be more public disclosures from FCB.He said while no one has questioned the operations of the bank, "we need a third party confirmation that people are comfortable with the process."
Alfonso: No comment
Yesterday, FCB's chairman Nyree Alfonso said it would only be appropriate to comment when the findings of the bank's two investigations are disclosed.