Tuesday, January 23, 2018

Credibility of Howai, First Citizen’s audit at stake


probing ipo: Larry Howai

Mark Fraser

 The resignation of First Citizens deputy chairman Anil Seeterram comes as no surprise as this is the fourth and most recent in a string of resignations of members of the previous board of directors who presided over the “we-put-you last” IPO (initial public offering) post the bank’s annual general meeting on May 12.

In fact, it was anticipated, particularly after the story broke about three weeks ago that his father, Chanka Seeterram, a “connected party”, was allotted 458,274 shares in the IPO and subsequently sold them by September 30, 2013, less than two weeks later, alle­-

gedly without the required disclosures pursuant to Section 136 of the Securities Act 2012.

However, what is particularly troubling is Finance Minister Larry Howai’s statement in the Parliament last Friday that “he has read the report and it did not include Seeterram’s (share) purchase. The minister’s statement now brings into serious question the entire PricewaterhouseCoopers (PwC) forensic audit or, at the very minimum, its terms of reference. Since I cannot wrap my brain around how such a significant share purchase and subsequent sale in such a short space of time by (of all people) the father of a director, who shares the same surname, could be missed. 

This point is further underscored by the minister’s earlier public statements of March 25 and February 14, in which he stated, inter alia, “Following these initial discussions (with the TTSE, TTSEC and the CBTT), the ministry determined that there was need for a full investigation of the matter (IPO) and employed the services of PricewaterhouseCoopers to complete an audit of the IPO process and a forensic audit of specific transactions which were part of that process.” He also gave a firm commitment that he “stands ready to provide the public of T&T with pertinent information (on the audit when completed) as same is deemed allowable for disclosure”. 

Moreover, credible information reaching me indicates there is at least one other connected party who sold their IPO shares prior to September 30, 2013, ostensibly to avoid disclosure in the bank’s annual report. The information also suggests this individual may be in contravention of the bank’s policy of a 90-day blackout period following the share listing and may not have made the necessary disclosures pursuant to Section 136 of the Securities Act 2012. 

I am therefore calling on the Finance Minister, Larry Howai, to publish the terms of reference of the PwC audit and, more importantly, to keep his word by making all pertinent information on the First Citizens IPO available to the public forthwith, otherwise, he runs the risk of bringing his own credibility and reputation into question when these matters eventually come to light.

Peter Permell

Minority Shareholder Rights Advocate

via e-mail