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AG’s report on First Citizens IPO issue next week
Attorney General Anand Ramlogan expects to complete his probe of the First Citizens IPO issue by this weekend and report on the results and recommendations early next week. He said the issue was whether a legal loophole was exploited that could result in several legal consequences either in the civil or criminal realm. Ramlogan updated reporters on his probe yesterday during a break of the Senate sitting.
Commenting on the investigation of the IPO issue, which the Cabinet recently mandated his ministry to do, Ramlogan said:
“It is clear from what appears before me thus far, the share allocation policy did not adequately address one of the permutations and that was whether, what should happen if there was an under-subscription of shares for any given categories and in this case the given category is the employee share of the allocation.”
Ramlogan said he reviewed the report on the issue by PriceWaterhouseCoopers. He said it was a matter of extreme concern as it raised serious issues about the regulatory framework and the design of the share allocation plan at the state-owned bank. He said he was examining PWC’s role but would not be bound by its findings. His review would include the advice and guidance by PWC in its capacity as a consultant, he added.
Ramlogan said he had met with Securities Exchange Commission chairman Dr Patrick Watson on the issue to ensure a panoramic overview was taken of the entire transaction. Saying the situation had to be carefully analysed in light of the practice First Citizens had in place, Ramlogan said he was examining it from different angles.
That included examining the role played by bank officials, independent regulatory authority and divestment secretariat of the Finance Ministry to see where what went wrong, if anything, if it was a matter of improper, unethical and immoral situations and if it transcends and “translates into legal wrong-doing which is actionable in the civil realm and if necessary to be referred to the Director of Public Prosecutions,” he added.
Ramlogan said he was examining the issue also to identify if there were any kinks or weak links in the regulatory system that needed ironing out and if there was anyone who breached rule and policies to safeguard public interest and if they could be weeded out and dealt with.
An investigation was launched following reports that former chief risk officer of First Citizens Hassan Phillip Rahaman purchased 634,588 shares in the bank IPO last August for $14.5 million which were later resold in January to his family members and companies owned by the Rahaman family for $26.7 million.