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‘Possible criminal investigation’

By Asha Javeed asha.javeed@trinidadexpress.com

Finance Minister Larry Howai said yesterday the findings in the report by PricewaterhouseCoopers (PWC) on the share purchase by former First Citizens chief risk officer Philip Rahaman “could be a criminal investigation at this stage”.
Howai’s statement stems from a draft copy of the report which he received yesterday and will submit to Cabinet today.
He said while PWC was not finished with the investigation, he had given a commitment it would be ready today, so he accepted it in its draft form.
Rahaman was fired on Tuesday 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. He made a $12 million profit on the transaction.
First Citizens said it dismissed him because it had lost confidence in Rahaman’s ability to carry out his duties.
Howai said the bank’s dismissal of Rahaman arose from information from its own audit.
He told the Express by phone he could not divulge details from the PWC report before it was presented to Cabinet, but explained the volume of Rahaman’s purchase was not in line with the Government’s policy.
He explained PWC had done two phases of the investigation: the first was to look at the allocation policy of the IPO, and the second was to look at the transaction itself.
He explained in the first case the share purchases of all staff over the 5,000 limit ori­ginally set was examined. Rahaman was not the only employee to purchase out of the undersubscribed bucket—the bank’s chief execu­tive, Larry Nath, acquired 215,000 shares; Robin Lewis—23,228; Shiva Manraj—20,954; and Keshwar Khodai—21,500.
Howai noted the Securities and Exchange Commission (SEC) had hired a team of forensic investigators from Canada to investigate the matter and follow the money trail.
He noted it was the only entity that had the authority to get into different elements of the transaction and root out the information which limited other institutions investigating the matter.
SEC chairman Patrick Watson yesterday admitted the transaction was a complex one and the first of its nature under his watch at the institution.
“A matter like this has never come before the SEC,” he said. “While I would like the investigation to go fast, we have to ensure we get it right. It will take some time and we are looking at all sorts of things which are not in the public domain.”
“I obviously cannot comment on the process and I understand the public’s impatience,” he added.
At an in-camera meeting of the Public Accounts Committee on Tuesday, First Citizens executives as well as its chair, Nyree Alfonso, were asked to provide details about Rahaman’s transaction as well as a $10 million settlement to Howai when he departed the organisation to assume the Finance Minister portfolio. The committee has requested a report from the bank on both matters.
The Express understands First Citizens has hired a US-based crisis management firm to handle its public relations moving forward.
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