A filing captioned Notice of Trading in shares Trinidad Cement Ltd (TCL) was posted on April 14 on the Trinidad and Tobago Stock Exchange Limited (TTSE) website and reads as follows:
“The TTSE received notice from TCL on the following transactions: A shareholder connected to a Director sold 5,612,665 TCL shares on April 04th 2016; A shareholder connected to a Director sold 3,930,030 TCL shares on April 04th 2016; and A shareholder connected to a Director purchased 9,542,695 TCL shares on April 04th 2016.”
I was a bit taken aback by the filing because I had just finished reviewing TCL’s 2015 Annual Report in preparation for next Friday’s AGM and it immediately occurred to me (based on the Directors’ Report) that the only shareholder connected to a director with that exact number of shares (ie 9,542,695) was the Chairman.
Firstly, I wish to make it clear that there’s absolutely nothing wrong with any director or connected/related party disposing of or purchasing additional shares in the company in which he or she is a shareholder.
However, any such “material change” must be disclosed in a timely fashion. According to the Securities Act No 17 of 2012 “material change” means—”…a change in the business, operations, assets or ownership of an issuer, the disclosure of which would be considered important to a reasonable investor in making an investment decision …”
Section 64 (1) states: Subject to subsection (2), where a material change occurs in the affairs of a reporting issuer, the reporting issuer shall—(a) within three days of the occurrence of the material change, file with the Commission the prescribed report disclosing the nature and substance of the material change, the contents of which shall be certified by a senior officer; (b) forthwith, and in any event within seven days of the occurrence of the material change, publish a notice in two daily newspapers of general circulation in Trinidad and Tobago or as otherwise prescribed and such notice shall be authorised by a senior officer and shall disclose the nature and substance of the material change; and (c) within seven days of the occurrence of the material change file a copy of the notice published in subsection (1) with the Commission.
Even if we assume the above criteria have been properly adhered, if in fact the Chairman sold all his shares on April 4, given the current economic environment, the challenges facing TCL at this time and need for shareholders to have confidence in the way forward, I am persuaded that he has a lot explaining to do either before or at the AGM.
Peter Permell
Shareholder