Monday, December 18, 2017

Public awaits clear-up of First Citizens success story

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Mark Fraser

 The investment manoeuvres that, in short order, turned one First Citizens executive into a multi-millionaire owner of the bank’s shares caused jaws to drop, eyes to open wide, and questions to be asked. Since that disclosure in the bank’s 2013 annual report, the matter of if and how such financial wheeling and dealing took place has properly been assumed worthy of investigation by competent authorities.

At home and abroad, the bank has been regarded as consistently well-managed. It has also maintained a successful bottom line, marked by $606.5 million in after-tax profits for the financial year ending September 30, 2013.  

No surprise, then, that Finance Minister Larry Howai, in his capacity of Corporation Sole, immediately sought to quell concerns about how and where a substantial portion of the bank’s shares ended up. It is in order that the Finance Ministry should be urgently seeking answers to such questions as arise.

Understandably sensing something suspicious, Opposition Leader Keith Rowley has called for a forensic audit of all that enabled the transactions which so enriched the executive, so fast. Indeed, curiosity about this outcome of the bank’s Initial Public Offering (IPO) extends way beyond the Government and the Opposition, to include ordinary citizens, ultimate proprietors of the state-owned bank.

Meanwhile, as First Citizens has well-advisedly kept its cool, chairperson Nyree D Alphonso has asserted that all processes connected with the IPO have remained unchallengeably above board. Still, multiple questions, some already raised by knowledgeable observers, and shareholders, cry out for answers, explaining one executive’s impressive investment success story.

It is heartening that First Citizens’ statement, publicly issued over the signature of Ms Alphonso, has acknowledged the high level of public misgivings over how the IPO  turned out. The bank noted that its employees had each been able to buy 5,000 shares “at the preferred price” set at $19.80 a share.

Not all employees availed themselves of this privilege. But the bank said any employee willing and able to buy more shares than those allocated at the “preferred price” was obliged to pay the $22 a share price offered to the general public.

As yet, no reason suggests itself to second-guess the assurances of First Citizens’ officialdom that everything about the IPO remained on the level. It was thus prudently advisable for the bank to make itself doubly sure about the processes and protocols governing the share offer.

Two weekends ago, the bank said its external auditors “are in the process of being engaged to conduct a more detailed review”. Such findings were expected shortly to be made available.

Together with its Government overseers, the bank should also know that, for the satisfaction of legitimate public concern, findings of reviews and investigations must be made public, and without delay.