Bourse Securities founder Subhas Ramkhelawan is to step down as the chairman of the T&T Stock Exchange (TTSE) at the organisation’s annual general meeting, which is due to be held early next month. Ramkhelawan is the stockbroker at the centre of multiple investigations that are currently underway into the sale of $26.7 million worth of bank shares by fired First Citizens chief risk officer Phillip Rahaman on January 14.
“He indicated at the start of a strategic planning retreat of the TTSE held at the Kapok Hotel yesterday, that he would not seek re-election for the post of chairman of the exchange at our forthcoming annual meeting,” a source who attended the meeting told the Sunday Guardian. The source denied reports that there were calls at the meeting for Ramkhelawan’s immediate resignation, but admitted that the chairman’s unprompted declaration that he would step down within a month may have forestalled such calls.
Calls for Ramkhelawan to resign have intensified as more details of Rahamangate continue to leak out amidst an external audit by consultants PwC and ongoing investigations by the local Securities and Exchange Commission, the Central Bank, and the Stock Exchange itself.
‘I am sure I will be vindicated at the end’
In an interview with CNC3 news yesterday, Ramkhelawan described the calls for his resignation as “premature” adding: “I am sure that I will be vindicated at the end of the investigation” being conducted by the SEC. Ramkhelawan issued a statement last week, insisting that Bourse Securities had acted within the confines of the law and regulations that direct the brokerage business. He also said that his company has a duty of confidentiality for all its clients’ transactions.
The stockbroker, who also serves as an independent senator, has not commented directly on claims that he acted for both the seller of the 634,588 shares worth $26.7 million—Phillip Rahaman, and the purchasers—his cousin, Imtiaz Rahaman, five Rahaman-owned companies, and a close relative of Imtiaz. Imtiaz Rahaman, who purchased 377,000 shares himself from his cousin, was elected as the chairman of Bourse Securities in December.
No word on whether Bourse financed any part of acquisition
Ramkhelawan has also declined to divulge whether Bourse financed any part of the original acquisition by Phillip Rahaman of 659,588 shares—most of which the banker purchased at $22 a share; the price at which the Government offered the shares to the population. The Bourse Securities Web site markets the company’s provision of Funding Against Securities, in which the broker offers “exceptionally low-cost financing” for up to 75 per cent of the value of holdings of locally listed equities.
The disputed transactions—Phillip Rahaman’s purchase of shares worth $14.5 million at the IPO in August, last year, and his sale of the shares in January to a relative at a profit of close to $13 million—have enraged individual investors, many of whom received a fraction of the First Citizens shares for which they applied. Both individual investors and employees were allocated 15 per cent of the shares at the IPO, or some 7,274,350 shares.
Even though shares in the undersubscribed employee bucket were transferred to individuals, many who applied ended up getting only 20 per cent of what they wanted.
No board role in IPO
Meanwhile, in an anonymous bundle of document circulated by a First Citizens director last week, the board of the majority state-owned company said that it had no role in the IPO process. According to the document: “We were ringfenced from the process by the terms of the prospectus, SEC regulations and indeed the teams set up by the Ministry of Finance such as the IPO Steering Committee and the technical advisers, PWC.
“Indeed, the normal supervisory oversight one would have expected the board to perform was handed over to the said technical adviser and the IPO Steering Committee, led by the deputy CEO Sharon Christopher.”
The document makes several unsubstantiated allegations against an employee of the bank and one of the nation’s stockbrokers. It also contains a seemingly legitimate letter dated November 15, 2012, from Minister of Finance Larry Howai to the bank’s chair, Nyree Alfonso, outlining the Government allocation policy and the fact that employees would receive a ten per cent discount on the purchase of up to 5,000 shares.
The minister’s letter indicated that employees “can purchase at the offer price any amount of shares in excess of 5,000.”
The bundle of documents also contains a June 27, 2013, Cabinet Minute in which the price of $22 per share was recommended for confirmation.
Board members
The 11-member board comprises: Ray Sumairsingh; Michael Phillip; Alvin Johnson; Peter Clarke; Donna Marie Johnson; Ian Narine; Terrence Chang; Andrew Mc Eachrane; Ranjit Jeewan; Subhas Ramkhelawan and Godfrey Gosein.