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SEC report stalls First Citizens probe

Sunday, May 18, 2014

The investigation into the multi-million dollar purchase and resale of First Citizens shares by its now former chief risk officer Phillip Rahaman has stalled. The probe, mandated by Finance Minister Larry Howai, called for a three-pronged approach into Rahaman’s massive purchase of the undersubcribed bucket of shares offered to the bank’s employees back in February when its Initial Public Offering (IPO) was launched.


The Sunday Guardian learned that international accounting giant PricewaterhouseCoopers (PwC) handed in its forensic findings at the beginning of April, and that was subsequently handed over to the Attorney General for legal guidance. Howai said it was the report by the Securities Exchange Commission (SEC) that was holding up the probe. Howai, in an e-mail exchange with the Sunday Guardian between Friday night and Saturday morning, confirmed that the SEC report was taking longer than he initially anticipated.


“The SEC report is likely to take longer to complete than had originally been communicated to me,” Howai said. On Monday, the bank held its first annual general meeting since the IPO was launched and Rahaman was fired. At that meeting at the National Academy for the Performing Arts (Napa), two board members—Shobee Jacelon and Marlene Juman—were not re-elected, while chairman Nyree Alfonso and Rishi Badaloo withdrew. 



Bank remains strong: Howai
Despite the issues in the public, and the unresolved IPO issue, Howai said he was still confident in the bank. “On the question of confidence in the bank, I don’t see any problem. The bank remains strong, well capitalised and very profitable,” he said. The bank is expected to replace the four board members within one months time when it will hold an Extraordinary General Meeting. 


Howai, who has spoken out twice since the board vote—including at Thursday’s post-Cabinet press briefing at the office of the Prime Minister—again said that no decision has yet been taken on the fate of the other directors. This despite calls from both the Opposition and the representing union—Banking, Insurance and General Workers Union (BIGWU) that the entire board be replaced.

Should Cabinet and Howai decide to remove the remaining bank directors, they are mandated to get at least 21 days notice. Several attempts to contact SEC head Patrick Watson by phone and text were unsuccessful. 



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