Saturday, February 17, 2018

‘Bourse above board’

Controversial purchase of First Citizens shares


BUYER: Philip Rahaman

Mark Fraser

Imtiaz Rahaman, first cousin of controversial First Citizens executive Philip Rahaman and chairman of Bourse Securities, said yesterday that as a non-executive member of the board, he had no input into the operations of the company. 

“I am a non-executive chairman at Bourse so all of the operations of the business would really be run by (managing director) Subhas Ramkhelawan. I’ve known him for 18 years and I am very confident that whatever business Bourse does would be done to highest standards required,” Rahaman told the Express in a telephone interview yesterday.

 Ramkhelawan is also the chairman of the Trinidad and Tobago Stock Exchange and serves as an Independent Senator.

The First Citizens 2013 annual report, released earlier this year, noted Philip Rahaman had purchased 659,588 shares at a cost of about $14 million during the bank’s heavily oversubscribed initial public offering. In January, First Citizens reported to the Trinidad and Tobago Stock Exchange (TTSE) that a “senior executive” at the institution had sold 634,588. The resulting profit would have been an estimated $12 million. The TTSE did not name the executive, but based on the volume it has been assumed to be Rahaman.

Since then, Rahaman’s transaction has come under heavy public scrutiny for what some critics claim is his unfair acquisition of shares that had been in high demand. Rahaman purchased the share through the employee allocation, which had been significantly undersubscribed, as opposed to the individual “public” bucket, which had been oversubscribed nine times. 

The transaction was conducted through Bourse Securities.

Finance Minister Larry Howai has ordered an audit conducted by international firm PriceWaterhouseCooper into the IPO process. The preliminary report should be ready early next week.

“I believe Bourse and (Ramkhelawan) have high standards that it adheres to, and I believe there has been nothing wrong done. I am sure this review (and those by other regulatory institutions) will do what is within their remit. I am confident when it runs its full course the answers will be clear. A lot of speculation and has not helped the process. I have confidence—confidence in financial services is important in process,” Rahaman said. 

He directed further queries about the transaction to Philip, but did say that as far as he was aware, his cousin had been a longstanding client of Bourse. 

Several calls to Ramkhelawan’s mobile were unanswered. 

The TTSE and the Securities and Exchange Commission (SEC), both of which are conducting their own investigations, declined the Express’ requests for comments on the matter, citing that the situation was under investigation and comments will be made at appropriate times. 

Howai told the Express in an e-mailed response that the audit will cover both the IPO and process as well as if there were other breaches, such as source of funds. 

“The scope originally defined by the Ministry had just dealt with the first part of the process. I subsequently widened the scope, when I saw what was requested, to broaden the audit. This resulted a longer time required to complete it,” he said.