T he Minister of Finance and the Economy needs to be reminded again that what is now being described as the “First Citizens-IPO scandal” must be dealt with openly and swiftly.
Senator Larry Howai may not wish to acknowledge it publicly, but it is a matter that carries tremendous reputational issues for him. Mr Howai, it should be noted, was the person promoted to lead the bank in its formative years by the late Leonard Williams, First Citizens’ true father.
In a current radio-television promotional campaign First Citizens boasts of commercial successes and the awards that it has received from the international banking community.
In reality, Brand First Citizens —thanks in great part to Mr Howai’s solid management—is seen as the showpiece of the State enterprise sector.
Unfortunately questions hover over the $10 million golden handshake the current board granted Mr Howai on his departure for his cabinet position
In many quarters, there is still distaste over that award. In their lingering discomfort critics readily acknowledge Mr Howai’s performance—but they feel it is clouded by him being touted by the Prime Minister as the person whose magical expertise and discipline would have transformed her administration’s sullied reputation.
None of this has happened. After some two years in office, Mr Howai has yet to establish his presence, in the public’s mind, as a significant player in the decision-making of the Government.
In fact, there is the perception that the Finance Minister is consulted after the fact, i.e. after the Prime Minister’s frequent, off-the-cuff commitments to multi-million-dollar expenditures.
Also, Mr Howai is yet to resolve the CL Financial bail-out issue, a matter bungled and left in a mess by his predecessor. Even the promise that CLICO would be converted into a new insurance entity called Atrius still remains just that—a promise after months of detailed in-house planning.
Sources say this matter has gone backward and forward to the Cabinet over the past few months without the required weighty and assertive input of the Finance Minister
That portfolio, they confide, has shifted. It now resides in the office of the Attorney General which has been arbitrating, and resisting, the various interests contending vigorously for shares in the CL Financial empire.
Mr Howai also did not bring the weight of his office to bear in the Caribbean Airlines (CAL) controversy. He fired CAL’s chairman, the former CEPEP contractor Rabindra Moonan, and the airline’s board, which was installed by the then transport minister —but he was publicly humiliated by the Housing Minister who defiantly appointed Moonan to the chairmanship of the Housing Development Corporation with the snipe that the Finance Minister did not understand politics.
Then there is the appointment of the Central Bank Governor. The decision to appoint an inexperienced and unprepared candidate is said to have been made in another place and later handed to the Finance Minister.
Last week, the Governor announced that Ram Ramesh, his former boss at the defunct CL Financial brokerage, CMMB, would be his personal advisor at the bank. Whether or not the Finance Minister was consulted on this appointment, the Governor’s decision creates another reputational issue for him.
The Finance Minister also announced, without any reasonable explanation, that he took the First Citizens-IPO matter to the Cabinet, and it was referred to the Attorney General.
He added that matter in which the bank’s former chief risk officer purchased 659,588 shares—although there was an employees’ purchase limit of 5,000 shares —was still under investigation by the Securities and Exchange Commission and Central Bank and it would be concluded “within the next three to four weeks”.
Many observers may now agree with the Housing Minister’s assertion: Senator Howai really does not understand the nature of the beast called politics, and the suspicions and animus that it engenders.
First, the Finance Minister must acknowledge that the First Citizens brand is now tainted and then assert himself because all decisions in this matter are his straightforward call to make—not that of the Attorney General.
The First Citizens executive involved in the share deal was fired, although earlier his actions were defended staunchly by Nyree Alfonso, the bank’s chairperson, who chose to ignore the bank’s code of conduct, claiming the purchase was merely a legal matter.
In an about-face, the bank admitted that after its internal investigation “the chairperson and the board reached a determination that they had lost confidence” in the executive.
In an unrelated event in the US, New Jersey governor Chris Christie, facing an investigation into his role in a highway scandal, was told by a commentator that it was “all an inside job”. The million-dollar investigation Christie ordered, which cleared him of wrongdoing, was described as “so shoddy that everything could have been completed in one day”.
The Finance Minister should take note. The First Citizens-IPO scandal suggests a “big inside job”; other executives did exceed the employee limit for shares to be bought.
So what should one make of Senator Howai’s delayed investigation? Another million-dollar whitewash? I hope not.
* Keith Subero, a former Express news editor, has since followed a career in communication and management.