First Citizens deputy chairman (and now acting chairman) Anil Seeterram said his father, Chanka Seeterram, did not have to conform to the bank’s 90-day black-out period before he sold 458,274 FIRST shares which he had acquired during the bank’s Initial Public Offering (IPO) last July.
Seeterram has sought to clarify this issue following a Sunday Express story on his father’s purchase of 458,274 FIRST shares at $9,623,754 and the subsequent sale which netted him a profit of about $6.4 million.
According to First Citizens’ insider trading policy, C Seeterram would have qualified as a restricted person.
However, A Seeterram in an e-mail clarification said: “The black-out period for the first 90 days of trading of FIRST shares only applied to employees of the bank. This particular black-out period, when the shares were first traded, did not apply to directors and their connected parties.”
He said he clarified this with the bank’s head of Legal and Compliance on Sunday morning.
C Seeterram sold his block of shares before September 30, when First Citizens closes its annual accounts for the financial year.
This meant that during his declarations to related parties, C Seeterram’s transaction would not have registered.
In First Citizens 2013 annual report, A Seeteram is listed as owning 4,141 FIRST shares while his connected parties amount to 12,357.
A document outlining C Seeterram’s transaction was sent to the Express after the contents of a report by the board, which is now chaired by A Seeterram, was made public in a Sunday Express exclusive.
The Express was told the leak was done by a senior bank officer to discredit the acting chairman and raise credibility issues about the contents of the report.
Following the Philip Rahaman fiasco, where the bank’s former chief risk officer bought 659,588 shares from the employee bucket and sold 634,588 of those shares four months later to his cousin Imtiaz Rahaman, his aunt and five Rahaman-controlled businesses, the board had initiated an investigation into management’s responsibility into the events that transpired.
That investigation, by the remaining board members, recommended that disciplinary action be taken against three bank officers—chief executive Larry Nath, deputy chief executive and corporate secretary Sharon Christopher and Head of Legal Department, Lindi Ballah-Tull.
It concluded that Nath knew about Rahaman’s purchase after the IPO was closed last August as he was alerted by Jason Julien, head of First Citizens Investment Services, a subsidiary of the bank.
A Seeterram was a member of the bank’s audit committee that three weeks ago chaired a board meeting which produced a report recommending disciplinary action over the Rahaman scandal.
Nath has said the report was the subject of legal consideration. He also said it was unsigned and therefore he had no comment.
n Finance Minister Larry Howai said yesterday he received an “anonymous letter” concerning the purchase of shares by Chanka Seeterram which he handed over to the Securities and Exchange Commission (SEC).
n As far as I am aware nothing further came out of it. I think what the allegation was that the person applied for a significant number of shares. But anybody can apply for any number of shares. It’s not against the law to apply for shares.
n The issue is why he applied for so many shares is because he heard from (Anil) that this is good and so on. But I don’t think… everyone felt it was a good investment. Many people invested in it and would have liked to have more.
n It seems to me that the SEC in evaluating it may have (and I don’t want to speak for them), may have decided there wasn’t anything that needed to be investigated further or perhaps they investigated and realised everything was above board.