Attorney General Anand Ramlogan has retained senior counsel Deborah Peake to assist him in the review of the controversial matter of the First Citizens IPO (initial public offering) to determine whether civil or criminal action is required.
Ramlogan said he selected Peake because of her experience in corporate and commercial law. She is also the attorney for the Integrity Commission.
Ramlogan said he had also held discussions with Securities and Exchange Commission (SEC) chairman Dr Patrick Watson on the matter.
The Attorney General is reviewing the report prepared by consultant to the Government on the IPO PricewaterhouseCoopers.
The Attorney General said: “I am examining... the roles played by officials in the bank (First Citizens), the independent regulatory authority and the divestment secretariat from the Ministry of Finance to see what went wrong...whether it was a matter of improper, unethical and immoral (behaviour), and whether or not it transcends and translates into legal wrongdoing both in the civil realm and, if necessary, to be referred to the Director of Public Prosecutions.”
Ramlogan said the enquiry is expected to be completed by the end of this week.
“The issue here is whether a legal loophole was exploited that could result in severe legal consequences, either in the civil and/or criminal realm. That is the issue as I see it.”
Ramlogan said he wanted to ensure the efforts to investigate the matter by the Attorney General and SEC would be independent, unbiased and professional.
“We must avoid a recurrence of what happened, but we must be fair and objective in our assessment of the facts in this matter.”
The Attorney General said it was clear, from the papers before him, the share allocation policy did not adequately address the permutation of what should happen if there was an undersubscription of shares in any given category—in this case, the employee share of the allocation.
“What happened thereafter has to be carefully analysed in terms of the practice and the procedure that the bank had in place,” he said.
Asked whether he would be looking at the allegations that the Securities Act was breached, both by the bank and the Stock Exchange when they failed to report the transaction to the public within the stipulated period, Ramlogan said this was why he spoke with Watson, in order to ensure a “panoramic view” of the transaction is observed.
“We cannot take a compartmentalised approach to this investigation, but must take a holistic view to ensure that wherever the kinks and weak links were in this system can be identified, and to ensure that anyone who breached the rules and policies that were in place to protect and safeguard the public interest can be weeded out and dealt with.”
He said he was locating the transaction in the context of the entire regulatory framework that is in place and what ought to have happened and what did happen.
Ramlogan said the good news was that First Citizens remained a strong institution, evidenced by the oversubscription for the shares and the share price itself.
He said the integrity of the bank remains intact.
On the issue of whether having PriceWaterhouseCoopers do the review was a case of himself to himself since it was the consultant guiding the Government on the IPO, Ramlogan said he would not be bound by anything PWC says or by the findings of its review.
“In fact, my review would include the advice and guidance provided by PriceWaterhouse in its capacity as a consultant,” he said, adding there ought to have been some consideration of what to do if the shares were undersubscribed in any category.
He said he would consider what provision, if any, was made to cater for that permutation in the structure and design of the share allocation policy.
On the issue of whether the conflict-of-interest issues and the web of interlocking directorships showed the issue of whether people were fit and proper to sit in certain positions needed to be addressed, Ramlogan said the Prime Minister had always stated the Government was against interlocking directorships because it provided fertile ground for bad business practices.
Referring to this practice, which he said undermined accountability and transparency during the People’s National Movement era, he said this Government’s policy was that this should not take place in the appointment of State boards.
“Of course, we have no control over certain institutions that are independent in nature.”
He added, however, one must not rush to judgment because Trinidad and Tobago was a small society and one was dealing with a niche area where there aren’t going to be many qualified people and, of those who are qualified, there would be fewer who are prepared to offer themselves to public service and even fewer prepared to subject themselves to the rigours of public scrutiny and the Integrity in Public Life Act.
“This whittles down the pool of talent,” he said.
Asked what would be the convention in the Senate if the Securities Bill (currently before a Joint Select Committee) comes for debate and there is any senator who has a conflict of interest, Ramlogan said it was not illegal to have a conflict of interest. What was illegal was to have an undisclosed conflict of interest, he said.
“There are two options available. You can disclose your conflict of interest and participate in the debate so that we would colour what you say by virtue of the knowledge of that conflict of interest; or you can altogether disqualify yourself and recuse yourself so that you do not participate in the deliberations, so there would be no possibility of influencing what is the outcome of the process.
“In this particular matter, I would wait to see what the judgment call made by the individual member is, and then it would be dealt with. But that is a matter for the individual integrity and judgment call of the person,” he said, adding that there are other ways to participate in which the person can make their submissions in writing.