First Citizens executive Phillip Rahaman sold most of the 659,588 shares he purchased for $14.5 million on January 14, pocketing a profit of nearly $12 million, according to a report on the T&T Stock Exchange Web site posted yesterday. In a one-sentence notice, the Stock Exchange said it had been informed by First Citizens Bank Ltd that on January 14, 2014, a senior executive officer sold 634,588 FIRST shares.
On January 14, the market price for First Citizens shares was $42.15, which means that if he sold all the shares at that price, the total consideration on the transaction would have amounted to $26,747,888.20. Subtracting the one per cent commission for the broker reduces the total consideration to $26,480,410, leaving a profit of just under $12 million if the Initial Public Offer (IPO) purchase price of $14.5 million is considered.
There is no explanation in the notice of why the information was only disclosed on March 12, when it should have been disclosed by January 21, five working days after the January 14 transaction date. Stock Exchange Rule 604 stipulates that listed companies are required to inform the Stock Exchange within five working days of trades made by insiders, who comprise directors and senior officers.
Although the Stock Exchange does not identify Rahaman by name, he is almost certainly the only one of the bank’s executive to own more than 600,000 shares, as he was identified as owning 659,588 shares in First Citizens 2013 annual report. The next largest owner among the bank’s directors and senior officers was Larry Nath, the bank’s chief executive, who acquired 215,000 shares.
Last month, Finance Minister Larry Howai ordered a detailed audit on the IPO allocation process. The minister confirmed last week that the audit was underway and that accounting firm PwC had been handed the brief to do the audit.