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In a stunning and possibly historic corporate development, the representative of T&T’s Corporation Sole yesterday voted against the re-election of two First Citizens directors and indicated that it did not support the re-election of two more, including Nyree Alfonso, the controversial chair of the majority state-owned bank. The developments came at the end of the first annual meeting of First Citizens as a public company, when Vishnu Dhanpaul, the permanent secretary in the Ministry of Finance, was identified as the representative of the Corporation Sole, the entity that holds all property on behalf of the State. The Corporation Sole remains the largest shareholder of First Citizens, with 193,982,660 or 77.2 per cent of the bank’s issued share capital.
After his presence was disclosed, Dhanpaul, who was seated in the front row of seats at the National Academy for the Performing Arts, Port-of-Spain, first indicated that he was voting in favour of a resolution aimed at increasing the number of directors on the bank’s board to between three and 15. Then came the resolution for the re-election of four directors—Nyree Alfonso, Rishi Baddaloo, Shobee Jacelon and Marlene Juman. The other seven directors did not offer themselves for re-appointment. But before the matter of Alfonso’s re-election could be put to the vote, the bank’s deputy chairman, Anil Seeterram, announced that neither Alfonso nor Baddaloo would offer themselves for re-election. This was greeted with applause from the 450 shareholders in attendance.
Dhanpaul then said he did not support the re-election of Jacelon as a director. He added that as the representative of the Corporation Sole, he also did not support the re-election of either Alfonso or Baddaloo. And then, in a move that caused gasps of surprise among some shareholders, he said the Corporation Sole also did not support the re-election of Juman, the permanent secretary in the Ministry of the Attorney General and a former acting PS in the Ministry of Finance. Dhanpaul also said that the bank’s majority shareholder intended to requisition an extraordinary general meeting within 30 days to address the four vacancies on the First Citizens board. It was also revealed that the Government had decided that the First Citizens minority shareholders would be represented by nominees of the T&T Manufacturers’ Association and the T&T Chamber of Commerce.
$61,000 a month in board fees
Earlier in the annual meeting, it was disclosed that Alfonso, who was appointed to the chair of the bank in December 2010, received over $61,000 a month in board fees for serving as the chair of First Citizens and seven of its subsidiaries. “It seems to me that the chairman of a state-owned bank is making more money than the Prime Minister,” remarked minority shareholder activist, Peter Permell, who subjected Alfonso and other directors to a torrid line of questioning that went on for more than one hour. Shareholders jeered Alfonso, who is an attorney, when, in response to Permell’s questions on the issue of her compensation, she said: “This is not the forum for that.” Alfonso, at the start of the meeting, had apologised for any embarrassment caused by comments she made in a newspaper article, in which she said the purchase of 659,588 shares in last year’s Initial Public Offering (IPO) by Philip Rahaman, the bank’s former chief risk officer, did not breach any laws, rule or procedures. She also noted weaknesses in the allocation policy and in the bank’s internal processes that had failed to red flag the application for at the IPO.
Alfonso: Work left undone
Speaking to the T&T Guardian about her decision by phone hours later, Alfonso said she had only one regret. “I am resting and I am spending time with my family, whom I had neglected.” Asked whether she was hounded out of the bank, she said, “I have no comment. I know I left the bank in a sound state, but I left many things open, regrettably - that I regret, but that’s not by choice. “I left the bank on a financially sound state, but there are many things (concerning) the restructuring of the bank, many initiatives ongoing.” Asked whether she felt she had taken the ‘fall’ for the board of directors given calls for the board to go, she said: “I make no comment on that.” The future of the board had come into question after media reports highlighted the sale of 659,588 shares to then FCB executive Rahaman at a cost of $14.5 million. That matter is currently under investigation.
Shareholder rights activist Peter Permell had also lobbied for the board’s resignation. At a news conference after the meeting, hosted by group CEO Larry Nath and Corporate Secretary and Deputy chief executive officer Sharon Christopher, Christopher confirmed Alfonso’s departure but said she did not resign. “What happened, she did not offer herself for re-election, so in accordance with the by-laws she retires as at the end of the meeting, as of now she is retired so she is no longer a member of the board of the bank.” Commenting on the overall meeting, Christopher said “heat” was expected.
Corporate structure revisited
In a statement prior to the meeting, Permell had indicated that yesterday’s AGM was going to be the “mother of all AGMs.” He had also issued advertisements in the newspaper to gather support for his campaign, “We-Put-You-Last” IPO protest. At the new conference after the AGM, group CEO Nath said the corporate governance structure of the bank may be altered, as every incident is an opportunity for the bank to learn. “Certainly we would re-visit our corporate governance around some of these developments and certainly we would also re-visit all of our procedures and practices that relates to this occurrence.” Asked whether the public calls for the board’s resignation were justifiable, Nath said: “In T&T, shareholder advocacy is evolving and whereas in years gone by this type of lobbying and this type of advocacy is not something we have seen before, in countries such as the US and Canada, shareholders’ rights and minority rights are becoming a bigger and bigger issue and this is the new normal corporates are faced with in T&T and we have to respect it.
“We have to ensure that our corporate governance takes account of this, and we have to ensure that we remain very well connected and engaged with all our shareholders.” Asked what was the reaction by the board to Rahaman being investigated, he said: “Obviously we were surprised, disappointed and shocked, but with regards to commenting on the actual investigation, I would prefer not to comment at this point given the other investigations that are ongoing,” Nath said.