THE settlements announced by the Securities and Exchange Commission (SEC) against Hassan Philip Rahaman, Imtiaz Rahaman, Subhas Ramkhelawan and Bourse Securities Ltd in the matter involving the 2013 trade of 659,588 First Citizens shares underscores not only the scandal of the transaction but the tragic reinforcement of the society’s cynicism that there is no honour to be found among its elite.
The Director of Public Prosecutions will, in time, reveal whether he believes crimes were committed in the acquisition and sale of First Citizens shares in 2013.
However, while the law deals in the black and white of evidence, most of life occurs in the grey areas where actions are circumscribed by notions of what is right and wrong and what is ethical, fair, moral and just. While law is informed by the values of a society, values are not prosecuted by law but by public opinion, which explains why those accused of ethical breaches almost invariably declare that they broke no law.
Contrary to the assertion by the Securities and Exchange Commission, the settlements fall far short of serving the public interest. By agreeing to the relatively paltry payments of $1.3 million from Subhas Ramkhelawan and Bourse Securities Ltd, and $750,000 each from cousins Hassan Philip Rahaman and Imtiaz Rahaman, the SEC has denied the public the vital transparency required in this case.
The public needed, for example, to understand exactly what Mr Ramkhelawan, managing director of Bourse and, notably, an Independent Senator, meant when, in anticipation of the next day’s sale and purchase of 634,588 of the shares bought by Philip Rahaman from the discounted employee allotment, he told Imtiaz Rahaman, the proposed buyer and chairman of Bourse, that “while the trades would be open market, appropriate trading strategies should allow you to access most if not all of the shares sought”. Keep in mind that Ramkhelawan was at the time chairman of the T&T Stock Exchange.
Because the SEC has closed this matter without “any admission of wrongdoing and/or guilt and/or liability whatsoever and without admission as to the truth of the claims/allegations...” the public is now likely never to know how, following rapid-fire negotiations between Imtiaz Rahaman and Ramkhelawan which increased Bourse’s commission, the transaction was flawlessly executed on the stock exchange at 10.53 a.m. on January 14, 2014, with the offer matching exactly in both price and volume.
Another thing the public may also never know is why the allotment of shares for First Citizens employees at an attractive ten per cent discount with zero-interest loans was so under-subscribed that Hassan Philip Rahaman, chief risk officer of First Citizens, could apply and receive 659,588 shares.
While the SEC probe is necessarily limited to the share transaction, the public interest requires a wider scope of investigation that should include the role of then-First Citizens chairman Nyree Alfonso, who publicly staked her “confidence in the way the bank ran the process, which was transparent, fair and unassailable”.