The T&T Se­cu­ri­ties and Ex­change Com­mis­sion (TTSEC) was es­tab­lished by an Act of Par­lia­ment and be­came op­er­a­tional when its first board was ap­point­ed.

That first board of com­mis­sion­ers was chaired by the late Carl­ton Robin­son, who was a se­nior of­fi­cer at T&T Mort­gage Fi­nance. Mr Robin­son served two terms from April 1997 to April 2003.

The board of the TTSEC has been chaired by some em­i­nent and in­de­pen­dent T&T na­tion­als com­pris­ing man­age­ment con­sul­tant Os­borne Nurse, cur­rent pres­i­dent of the In­dus­tri­al Court, Deb­o­rah Thomas-Fe­lix, UWI pro­fes­sor of eco­nom­ics Patrick Wat­son and se­nior coun­sel Dou­glas Mendes.

The board of the TTSEC is cur­rent­ly chaired by Enid Zephyrine, who is de­scribed on the web­site of the in­sti­tu­tion as be­ing “a fi­nan­cial man­age­ment spe­cial­ist with a dis­tin­guished ca­reer in the pub­lic sec­tor. Cur­rent­ly, she is the di­rec­tor-strate­gic man­age­ment and ex­e­cu­tion of­fice at the Min­istry of Fi­nance.”

Mrs Zephyrine was ap­point­ed to serve a two-year term as chair of the TTSEC on No­vem­ber 3, 2021. That was her sec­ond ap­point­ment as TTSEC chair and she pre­vi­ous­ly served two terms as deputy chair of the TTSEC from 2016 to 2020.

Sec­tion 10 (2) of the Se­cu­ri­ties Act (2012) stip­u­lates: “The Pres­i­dent shall ap­point all the com­mis­sion­ers and shall ap­point one of their num­ber to be its chair­man and an­oth­er com­mis­sion­er to be its deputy chair­man.”

While the Pres­i­dent signs the in­stru­ments of ap­point­ment for the com­mis­sion­ers of the TTSEC, those com­mis­sion­ers are iden­ti­fied by the Min­istry of Fi­nance and rat­i­fied by Cab­i­net.

The TTSEC was es­tab­lished as a body cor­po­rate to reg­u­late the se­cu­ri­ties mar­ket in T&T.

Ac­cord­ing to the Se­cu­ri­ties Act, the TTSEC has 12 func­tions. The first of the 12 func­tions iden­ti­fied in sec­tion 6 of the Act is: “Ad­vise the Min­is­ter of Fi­nance on mat­ters re­lat­ing to the se­cu­ri­ties in­dus­try.”

So, fac­tu­al­ly the cur­rent board of the TTSEC is chaired by a se­nior pub­lic ser­vant in the Min­istry of Fi­nance, which has a role in the se­lec­tion of the TTSEC com­mis­sion­ers and one of the func­tions of the Com­mis­sion is to ad­vise the Min­is­ter of Fi­nance on mat­ters re­lat­ing to the se­cu­ri­ties in­dus­try.

What trig­gers takeover code?

On De­cem­ber 4, 2022, this colum­nist wrote a news sto­ry in the Sun­day Ex­press, which was head­lined: “With re­demp­tion of CIF: Gov­ern­ment’s stake in Re­pub­lic to in­crease.”

Based on a search of the reg­is­ter of the unithold­ers of the Cli­co In­vest­ment Fund (CIF) lodged with the T&T Cen­tral De­posi­tary, that news sto­ry re­port­ed that T&T’s Cor­po­ra­tion Sole, cur­rent­ly Min­is­ter of Fi­nance Colm Im­bert, was list­ed as own­ing 57,016,872 units in the CIF as at No­vem­ber 29, 2022.

All as­sets trans­ferred, vest­ed or owned in trust for the State are held in the name of Cor­po­ra­tion Sole.

Based on the con­ver­sion cri­te­ria of 0.1964 Re­pub­lic Fi­nan­cial Hold­ings Ltd (RFHL) shares for every CIF unit held, it was cal­cu­lat­ed that Cor­po­ra­tion Sole’s 57,016,872 units in the CIF would be con­vert­ed to 11.19 mil­lion RFHL shares. It was re­port­ed on De­cem­ber 4, 2022, that those 11.19 mil­lion shares would be equal of 6.84 per cent of RFHL’s then is­sued share cap­i­tal of 163,519,044 shares.

It was point­ed out that Cor­po­ra­tion Sole al­so has the vot­ing rights over the 42,475,362 RFHL shares held by the Na­tion­al In­vest­ment Fund (NIF). That block of shares was then equal to 25.98 per cent of the bank, mak­ing NIF (Cor­po­ra­tion Sole) the largest share­hold­er of the largest fi­nan­cial ser­vices com­pa­ny in the Eng­lish-speak­ing Caribbean.

When Cor­po­ra­tion Sole’s shares in RFHL from the con­ver­sion of the CIF units are com­bined with the NIF shares in the bank, the cal­cu­la­tion was that the re­sult­ing 32.82 per cent of RFHL held by Cor­po­ra­tion Sole would trig­ger the TTSEC’s takeover code (more prop­er­ly called the Se­cu­ri­ties In­dus­try (Take-Over) By-Laws 2005).

My un­der­stand­ing has al­ways been that the takeover code is trig­gered when com­pa­nies, act­ing singly or in con­cert, ac­quire more than 29.99 per cent of an­oth­er list­ed com­pa­ny. The takeover code was trig­gered when the NCB Fi­nan­cial Group share­hold­ing in Guardian Hold­ings Ltd went past 29.99 per cent. And the code was trig­gered when the share­hold­ing of Ce­mex went past 29.99 per cent of Trinidad Ce­ment Ltd.

In­ter­est­ing­ly, when RFHL pres­i­dent, Nigel Bap­tiste, was asked by email whether he was con­cerned that the con­ver­sion of Cor­po­ra­tion Sole’s CIF units in­to 11,198,113 Re­pub­lic shares had the po­ten­tial to trig­ger T&T’s takeover code, his re­sponse was “No con­cerns.”

On Feb­ru­ary 1, 2023, RFHL pub­lished a no­tice pur­suant to sec­tion 64(1)(B) of the Se­cu­ri­ties Act 2012, in which the bank dis­closed that NIF was its largest share­hold­er with 25.97 per cent and Cor­po­ra­tion Sole was its third largest share­hold­er with 6.71 per cent.

On the same day, Feb­ru­ary 1, an en­quiry was sent to the TTSEC ask­ing whether the com­bi­na­tion of Cor­po­ra­tion Sole’s RFHL shares in CIF and NIF would trig­ger T&T’s takeover code.

The TTSEC’s Feb­ru­ary 9 re­sponse was: “’With ref­er­ence to your me­dia query on Feb­ru­ary 8, 2023, the TTSEC notes the na­tion­al in­ter­est in this mat­ter and thanks you for your pa­tience. Please be ad­vised that the TTSEC is cur­rent­ly as­sess­ing the mat­ter re­lat­ed to RFHL and the takeover by­laws.”

On March 15, a fol­low-up en­quiry was sent to the TTSEC ask­ing how its as­sess­ment of the pos­si­ble trig­ger­ing of T&T’s takeover code by Cor­po­ra­tion Sole was go­ing or had gone.

The TTSEC’s re­sponse was: “The mat­ter con­tin­ues to be un­der our re­view and an ap­pro­pri­ate state­ment will be is­sued in due course.”

A sec­ond fol­low-up en­quiry was sent to the TTSEC on April 14, 2023. Up to Tues­day night, April 18, 2023, there had been no re­sponse from the TTSEC. That means 59 days af­ter a jour­nal­ist’s en­quiry on this mat­ter, the TTSEC is still in the as­sess­ment/re­view stage

In my view, the sim­ple ques­tions for the TTSEC in­clude:

• Does the fact that Cor­po­ra­tion Sole now con­trols more than 30 per cent of RFHL trig­ger the takeover code?

• If Cor­po­ra­tion Sole’s con­trol of more than 30 per cent of RFHL does NOT trig­ger the takeover code, why not?

• What has be­come of the TTSEC’s dis­clo­sure stip­u­la­tions that en­ti­ties are re­quired to make dis­clo­sures to the mar­ket when they in­crease share­hold­ings in list­ed com­pa­nies?

• As one of the func­tions of the TTSEC is to ad­vise the Min­is­ter of Fi­nance on mat­ters re­lat­ing to the se­cu­ri­ties in­dus­try, what ad­vice has the in­sti­tu­tion giv­en him?

An­oth­er, more gen­er­al ques­tion is: What ac­counts for the fact that RFHL pres­i­dent, Nigel Bap­tiste, had “no con­cerns,” when he was asked whether the con­ver­sion of Cor­po­ra­tion Sole’s CIF units in­to RFHL shares would trig­ger the takeover code?

Are Trin­trust or Re­pub­lic Bank Ltd (pen­sion plan trustee)—which are list­ed as be­ing the fourth and fifth largest RFHL share­hold­ers, as at Feb­ru­ary 1, 2023, with 6.52 per cent and 4.52 per cent of the hold­ing com­pa­ny re­spec­tive­ly–go­ing to end up own­ing some or all of the RFHL shares ac­quired by Cor­po­ra­tion Sole as a re­sult of the CIF con­ver­sion?