A proposal from the FCB Chairman

Chairman of First Citizen’s Bank Ken Gordon is the one who came with the controversial idea to merge Unit Trust Corporation and FCB.

In a release to the media, in which he attempted to give a justification, Gordon admitted that he was the person who “wrote to the Minister of Finance (and Prime Minister)” on the issue, “attaching an outline proposal for the Government’s consideration and study.” Stating that his document indicated the “significant benefits” that could flow to both institutions, Gordon said the plan envisaged the two companies coming together under a common Holding company while maintaining their “separate identities and functions.” Obviously seeking to assuage the fears of the depositors of UTC, he assured that one of the terms of such a merger would be that “it cannot and will not involve any interference with the funds of Unit Holders.” But he inadvertently acknowledged that public reaction to the proposal has been almost entirely negative. In fact, when the prime minister casually floated the idea last Thursday, offering no justification, it caused a certain amount of consternation, anxiety and alarm, with people raising questions about the financial, political and legal merits of the scheme. But, in defending the recommendation, the former media boss, who has an expanionist philosophy, lamented that “so much misunderstanding has been generated by a proposal which has distinct possibilities for strengthening both the UTC and FCB with significant benefits to the respective stakeholders.”

When Prime Minister Patrick Manning first disclosed that government was studying such a proposal, he did not divulge that it came within one of the two institutions involved. In fact, all Manning said was that the proposal came “from a citizen of Trinidad and Tobago.” It was only on Thursday, in commenting on the furore which the idea had generated, that the Prime Minister confessed that the suggestion came from within FCB. But even then, he declined to say who in FCB made the proposal. Gordon, who replaced Barry Sinanan as chairman of FCB in October last year,  emphasised that it was the “ongoing obligation” of every financial institution to “constantly seek opportunities for growth.” He added that this became even more important when the opportunity offered accelerated growth to both parties to the transaction. “While we await Government’s response, there are two points which must be clarified,” Gordon, who is also chairman of a crime committee, noted. The first point, he claimed, was that FCB had grown into a strong financial institution. “That has been confirmed by International Rating Agencies. In fact, First Citizens Bank enjoys the highest rating among local banks,” he asserted. Secondly, he pointed out that as in the case with all financial institutions which offer investment in mutual funds, the proposal, if accepted, “cannot and will not involve any interference with the funds of Unit Holders.” The flow of information on the proposal is still somewhat slow. Manning has stated that the public has only heard one side of the story. “We are examing both sides. It may well be that having examined that issue we see angles to it that have not found their way into the public domain,” he said. Gordon, who is “out of town,” could not be reached for comment.