Last update: 01-Aug-2014 1:38 am
Friday, August 01, 2014
Trinidad & Tobago Guardian Online
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Permell challenging the big boys
Peter Permell has built a reputation as advocate for minority shareholders. He has been vocal on shareholder issues with the collapse of CL Financial, and recently challenged executives of First Citizens at the annual general meeting, calling for more transparency in the fees they paid themselves.
Permell described himself as a “long-standing crusader in the fight to establish a culture of sustainable minority shareholder activism in T&T.” He believes that knowledge can help bridge the gap between the smaller, “unsophisticated” shareholder and the executive.
“One of my hobbies is reading: not just novels, but companies’ annual reports and financial statements, which have given me a knack for finding where the corporate bones are buried. What I look for in the reports is not so much what the documents are saying, but what they are not saying,” he said. Permell has called for minority shareholders to become more aware of their rights under the prevailing regulatory framework.
“In so doing, they not only protect these very rights and powers, but also significantly contribute to good governance and the overall development of the capital market,” he said. “Some say I have been blessed with the gift of the gab and the power of the pen. I am not too sure about either, but what I do know is that I was fortunate to receive a solid, well-rounded education,” he said.
Permell, who lives in east Trinidad, attended the Tunapuna Boy’s RC School, going on to St Mary’s College and then the University of the West Indies, St Augustine. He worked at the university bursary. “I believe my background in finance and accounting is a definite plus, not to mention the many, many years that I served in the credit union movement at all levels, and the fact that I have been a keen investor and faithful student of the stock market for over 30 years,” he said.
Permell is now his own boss—he is a financial adviser and minority shareholder advocate.
Vocal on BWIA, Clico...and now First Citizens
“In each case, with the exception of Clico, the shareholders found me,” said Permell. “However, in the case of Clico...I was a policyholder myself and the injustice was too egregious to leave unattended,” he said.
“I try to be consistent, balanced and respectful whenever I speak or write. I usually do so from an informed position and try to take the ethical high ground. I am not afraid to speak my truth clearly and I do so without fear or favour, malice or ill-will....My message resonates with thousands of minority shareholders.. many of whom were former Clico policyholders,” he said.
Advocate advice: a thankless job, be passionate
Citing Warren Buffet as a role model, Permell said they shared a rule of thumb: when buying a stock, think of it in terms of buying the whole company.
“Most investors don't analyse the businesses they invest in. They simply follow the brands of successful corporations. If you are buying a shop, you will analyse the type of products sold by the shop, overall sales, expenses, competence, and experience of the manager, competition strength of the shop, how the shop will manage the change in customer trends and so on,” he said: “...and ask yourself: would you buy the whole company if you had enough money?”
Permell said that individuals looking to become advocates must be truly passionate about it. “It is a thankless job with no specific hours of work,” he warned.
“They must properly equip themselves. Moreover, they must be mentally and physically fit, have a very supportive family; be well-equipped to take a proactive stance by keeping themselves informed of market news, trends and developments; familiarise themselves with the various pieces of legislation governing the securities market (eg the Securities Act, TTSE Rules, the Companies Act, the Financial Intuitions Act); be not afraid to jump off the beaten track and swim against the tide; and be able to motivate and inspire others,” he said.
And beyond...the paradigm has shifted
Permell said minority shareholder advocacy helped maintain public confidence in listed companies and the stock market. Such public trust, he said, “can only be achieved by the establishment and proper policing of a minimum set of industry standards...against which all corporate behaviour can be tested. Failure to so do usually results in a decline in stock market activity and in a general lethargy in investment,” he said.
Permell said some believe that until recently, there was only a small group of unsophisticated investors who did not challenge corporations; but that is changing—“for instance, when substantial shareholders and insiders conveniently fail to make full...and timely...disclosure, while they engage in abusive and discriminatory activity such as insider trading, market manipulation and price rigging.
In the past, this would go unnoticed, and receive little or no media scrutiny. However, after Clico and FCB, clearly the paradigm has shifted,” he said.