June 2012- $10 Million Golden Hand Shake

On June 27th, 2012 Larry Howai got a $10m parting gift from First Citizens.

The board of state-owned bank First Citizens approved the payment of $10 million to its departing chief executive officer, Larry Howai, two days before Prime Minister Kamla Persad-Bissessar announced that Howai would be the country’s new Minister of Finance—a job that gives him as Corporation Sole oversight of all state-owned companies, including First Citizens.

The payment to Howai, who took early retirement from the bank effective June 24 that year, is over and above the pension and gratuity that he is entitled to receive as an employee who worked for 32 years at the bank and its predecessors, National Commercial Bank and Workers’ Bank (1989) Ltd, said the chair of First Citizens, attorney Nyree Alfonso.

She said: “The pay­ment is in recog­ni­tion of his ex­cep­tion­al ser­vice to the or­gan­i­sa­tion as well as for the ben­e­fit of the bank in terms of at­tract­ing and re­tain­ing the best per­son­nel who would be as­sured that they too would be re­ward­ed if they give long and mer­i­to­ri­ous ser­vice to First Cit­i­zens.” Asked if the $10 mil­lion was an ex-gra­tia pay­ment, Al­fon­so re­sist­ed the use of the term, which refers to a sum of mon­ey paid when there is no oblig­a­tion or li­a­bil­i­ty to pay.

But she ad­mit­ted: “We were not un­der an oblig­a­tion to pay, but de­cid­ed to pay the sum based on prece­dent and our abil­i­ty un­der the Com­pa­nies Act to make such a pay­ment.” Al­fon­so said all of the $10 mil­lion was based on in­ter­nal prece­dent, from cal­cu­la­tions go­ing back to 2005, of what three se­nior man­agers who left the com­pa­ny re­ceived.

Based on his salary at the time of his de­par­ture and his 32 years of ser­vice, the for­mu­la used to cal­cu­late the con­sid­er­a­tion to Howai was not in any way dif­fer­ent or pref­er­en­tial than that re­ceived by se­nior man­agers de­part­ing from the bank in cir­cum­stances which were not dis­sim­i­lar to his, she said. The de­ci­sion was tak­en by non-ex­ec­u­tive di­rec­tors of the bank on­ly, with two di­rec­tors re­cus­ing them­selves.

The mat­ter was first dis­cussed at a board meet­ing on June 11 2012 but that meet­ing was ad­journed pend­ing the re­ceipt of le­gal ad­vice, which was sought and re­ceived from Rus­sel Mar­tineau, SC. “The fi­nal de­ci­sion, which was tak­en on June 20 2012, was based on both the prece­dent and the ad­vice re­ceived from Mar­tineau,” said Al­fon­so.

The Prime Min­is­ter at the time Kamla Persad-Bissessar reshuf­fled her Cab­i­net on June 22.

Al­fon­so con­ced­ed that the pub­lic per­cep­tion of the $10 mil­lion pay­ment “might be awk­ward,” but she main­tained that she “would have made the pay­ment had he re­ceived an­oth­er port­fo­lio. I will take the jabs for say­ing that I was try­ing to pla­cate the new boss. It does look a lit­tle awk­ward but on­ly be­cause of the port­fo­lio he as­sumed.”

Asked whether the de­ci­sion had the ap­proval of Cor­po­ra­tion Sole, which owns 97 per cent of the shares in First Cit­i­zens, Al­fon­so said the role of a board of a state-owned com­pa­ny is over­sight and gov­er­nance. “As a mat­ter of gov­er­nance, I don’t need the line min­is­ter to di­rect me on an is­sue like this, nor would I have tried to seek such ap­proval in these cir­cum­stances,” she said, adding that as the chair of a state-owned com­pa­ny, she does not take day-to-day in­struc­tions from the Min­is­ter of Fi­nance, but that that re­la­tion­ship is gov­erned by checks and bal­ances.

Soon after, there was a call for the board of directors at First Citizens bank to explain on what basis a decision was taken to give a 10 million dollar payment, to Larry Howai, the newly appointed Minister of Finance and the Economy at the time.

The call came from the Banking Insurance and General Workers Union, BIGWU.

The union also questioned the haste in which the payment was taken, since the recipient of the 10 million dollars, was also the Finance Minister, who was supposed to authorize such a payment taking place in any state enterprise in the first place.

BIGWU says the statement made by Chairman of the Board of Directors of First Citizens, was inherently contradictory.

The union was taking issue with the 10 million payment, as it said, it was the same person (the chairman) who had refused to begin negotiation with the union, in spite of the union submitting proposals for over a year.

The question of ethics still remains.

Larry Howai assumed responsibility for the Financial Services portfolio of the ANSA McAL Group on August 1, 2017.

One comment on “June 2012- $10 Million Golden Hand Shake

  1. Gary Maxim Camejo on

    Unbridaled management, corruption, nepotism call it as you see it. Makes you you feel to throw up. Looking forward to the day when the DPP and COP take action on these high society evil people.


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