‘First Citizens board must go too’
MINORITY Shareholders Advocate Peter Permell has called on the Board of First Citizens (FC) to follow the “honourable” lead of Trinidad and Tobago Stock Exchange chairman, Subhas Ramkhelawan, and resign.
This comes after a share-buying fiasco that led to the firing two weeks ago of the bank’s Group Chief Risk Officer, Philip Rahaman, following an internal audit by the bank on his purchase of 659,588 bank shares during its Initial Public Offering (IPO), and the subsequent sale of 634,588 of those shares four months later.
The bank said Rahaman was dismissed based on a loss of confidence in his ability to carry out his duties.
Permell has joined a chorus in the messy wake of that affair calling for the dismissal or resignation of the board, including chairman Nyree Alfonso.
A public campaign defending the board has been deemed “self-serving” by Permell, who said in a letter yesterday that “at all material times there were at least six Board members who were indirectly connected with, and at least three of them who would have been directly involved in, the IPO process and two of whom would have been close colleagues of Mr. Rahaman on the bank’s Executive Management Team.
“Accordingly, I wish to reaffirm my confidence in FCB as a financial intuition and just as I had done in the case of Mr. Ramkhelawan, I am hereby calling on each director of the FCB Board to place the interests of the institution above their own, by doing the honorable thing forthwith,” Permell stated.
He said the advertisements appearing in the local media are at the expense of the shareholders.
Permell said it also “stands out” that the steering committee ‘recommended’ by the Ministry of Finance (MoF) to manage the divestment process (IPO) comprised, among other persons, the Deputy Chief Executive Officer (Ms Sharon Christopher) who chaired the committee, the Chief Executive Officer (Mr Larry Nath) and the lead broker, First Citizens Brokerage & Advisory Services (FCBA, a wholly-owned subsidiary).
“FCB’s 2013 Annual Report (AR) at page 5 lists Nyree D. Alfonso (Chairman), Sharon L. Christopher, Larry Nath, Shobee Jacelon, Marlene Juman, Ved Seereeram and Anil Seeterram as the FCBA Board of Directors,” Permell said.
“Incidentally, all of whom are also directors on the Board of the parent company, FCB.
“Moreover at page 31 of the AR, it states inter alia: ‘the First Citizens Board acknowledges and understands that it has ultimate responsibility for ensuring and providing oversight for the effectiveness of the overall compliance and risk management and control framework and policies for the First Citizens Group. To this end, the Board established a subcommittee—the Board Enterprise Risk Management Committee’.”
At page 45, the AR further states, “In fulfilling its mandate, the Committee, through the Group Chief Risk Officer, has oversight of the Group’s Market Risk, Operational Risk and Compliance Units, Permell said.
“This is important because it establishes that the Board was aware of its overarching responsibility to mitigate any real or potential risks (particularly reputational risk) that could negatively impact the bank, notwithstanding any recommendation(s) of the MoF,” he sated.
“But more importantly it establishes that the Board may have exercised poor judgment in delegating this weighty responsibility to one individual, in the person of its former Group Chief Risk Officer, Mr Rahaman.”