FOR islanders worried about global events and the news that the UK is about to enter a recession of unknown severity and length, Friday’s shock announcement that advertising agency Wallace Barnaby was going into liquidation could not have come at a worse time.

It was proof – if any were needed – that things have already started to slow down and previously secure jobs are now at risk.

Yet jumping to such conclusions would be a mistake because there is more to this than meets the eye. Wallace Barnaby and its team are one of the most highly regarded agencies in the Channel Islands and, over the years, have been responsible for hundreds of thousands of pounds-worth of business and servicing some prestigious clients

Locally, it has seen good and bad times and has proved resilient while under local management.

Now part of the Ekay plc group, however, it and the Jersey office are regarded as expendable.

As the group’s finance director told the Stock Exchange on Friday, ‘the administration process is expected to have a positive impact on the group’s balance sheet as the negative net assets will no longer form part of the consolidated financial balance sheet’. He added that Wallace Barnaby had not been expected to reach profitability in the forthcoming financial year and so the process of liquidation was expected to have a positive impact on the profitability and cash flow of the group in the forthcoming financial year.

What is not known, of course, is where the debts that the local company cannot pay have arisen and whether they have anything to do with Ekay’s UK operations and any borrowings that it might have.

From the outside, and from the accounts given by the local directors, there appears to have been little real enthusiasm from Ekay to maintain its CI operations. In fact, quite the reverse.

Its public utterance gives the impression that it was pleased to get shot of something the local MD says was a strong business and one that certainly had a future.

There is a conflict in these two versions that islanders will find hard to swallow.

Ekay needs to come clean about what really drove the closure.