Disclosure needed on CISX affair
Thursday 17th October 2013, 4:00PM BST.
WHEN the Financial Times interviewed turnaround specialist Jon Moulton in April, it said that he was at his happiest when there were difficult decisions to be made.
As the new chairman of the Channel Islands Stock Exchange, he has certainly made a few.
The well-regarded founding chief executive has unexpectedly gone. That involved, according to the exchange, substantial costs, suggesting a negotiated departure. Next on the list was disclosing a 20-month secret – that the regulator had its hooks into the CISX for certain historic activities, highlighting defects in the ‘complex and unusual structure’ of the exchange.
According to sources yesterday, that structure may have given rise to similar concerns raised in 1998 by the Edwards report about ensuring a proper division of promotional and regulatory activities.
Whatever they are, the situation is clearly significant since the new CISX board has made provision for around £500,000 in respects of costs to date and possible regulatory settlements in
addition to paying for indemnities for certain past and present directors.
So the extent of the problems being investigated are extensive – given the near two-year probe – and potentially damagingly expensive.
But if you have to have an island institution in serious difficulty, it clearly helps to have someone like Mr Moulton at the helm, who is in his element assessing the risks and actively driving the repair process.
Given the harm this could do to the island’s reputation, there is a lot riding on his efforts and much at stake.
Islanders, however, will be concerned with rather more mundane considerations. How could this happen to an organisation that is part of the Guernsey establishment?
Don’t we have regulators to stop such things happening in the first place? What were previous CISX directors doing at the time?
Wasn’t the current chief minister a director and chair of the Guernsey Financial Services Commission at one time?
Getting the exchange back on its feet with the minimum damage to all stakeholders and the
island is clearly the first objective but the second has to be giving a full account of what led to the investigation in the first place.
Only full disclosure will do.