Apr 2014 Financial News

First Citizens Bank Limited – Notice to Shareholders

Apr 04, 2014

The Board of First Citizens Bank wishes to inform its many stakeholders regarding the Allocation Process for employee shares in the Initial Public Offering (IPO), as well as the events following the Bank’s own internal investigation into the Allocation Process and subsequent employee share purchases.

The Government of Trinidad and Tobago owned 96.5% of the Bank and took the decision to divest approximately 20% of its shareholding in an Initial Public Offering. The Allocation Policy for the IPO of First Citizens was recommended by the Divestment Secretariat (Strategy Management Office) of the Ministry of Finance, and approved by the Cabinet. This was the same model that was used for National Enterprises Limited’s (NEL) IPO. Finally, the Allocation Policy and the IPO Prospectus were reviewed and approved by the Trinidad and Tobago Stock Exchange and the Trinidad and Tobago Securities and Exchange Commission prior to the Offer being available to the market.

The approved Allocation Policy/Prospectus did not include limits on employee share purchases. Furthermore, in accordance with the terms outlined in the IPO Prospectus, employees could only submit one application for share purchases. All employees were given the opportunity to purchase 5,000 shares at a discounted price, and any amount in excess thereof at the standard offer price.

During the Subscription Period, due to the required confidentiality, the Board had no oversight of the Allocation Process. Therefore, the Board did not have any knowledge of the quantum of shares employees or any other prospective shareholder would receive.

As soon as the Board of Directors became aware of the former Chief Risk Officer’s purchase of significant shareholdings, it requested that the Audit Committee of the Board investigate the matter.

The Audit Committee conducted a full investigation into the Allocation Process for employee purchases. The scope of the investigation was to validate the integrity and soundness of the Allocation Process as per the Allocation Policy and identify any potential breaches of Bank policy.

After an extensive investigation, the Audit Committee presented its findings to the Board of Directors. The investigation revealed findings that resulted in a loss of confidence in, and subsequent termination of, the former Chief Risk Officer. Given the multiple ongoing investigation, it would not be appropriate for the Board to make any further comment at this time.

The Board of First Citizens Bank continues to be committed to upholding the integrity of this institution and is mindful of its responsibility to share relevant information with its employees, customers and other key stakeholders to ensure trust in our cherished institution is maintained.


Source:
The Trinidad and Tobago Stock Exchange Limited
Friday April 4, 2014