No action will be taken by the Isle of Man’s financial regulator to disqualify any former Manx Electricity Authority board members over the loans scandal.
A Tynwald select committee inquiry into the unauthorised borrowing of £120 million by a MEA subsidiary recommended that the Financial Supervision Commission should consider investigating whether any former board members named in its report are fit and proper to hold directorships.
But in a letter to go before next week’s Tynwald sitting, FSC chief executive John Aspden reveals that the commission had decided: ‘The public interest would not be best served by commencing any disqualification proceedings at this juncture.’
Mr Aspden said the FSC had obtained independent legal advice which concluded that as the failings of individuals cited in the select committee report were in relation to a statutory board and not a company then any action taken under the Company Officers (Disqualification) Act 2009 was unlikely to succeed.
The length of time that has passed since the identified failings was also considered ‘highly relevant’, he said. ‘The advice obtained by the Commission is that it would be highly unlikely to be able to obtain leave from the High Court to commence proceedings at this point in time.’
Only one of the individuals named in the select committee report currently holds a post as or is seeking to be appointed as a director, key person or controller of a licence holder, Mr Aspden’s letter notes.
The select committee inquiry was set up back in July 2005, nine months after revelations first surfaced that the MEA had taken out extra loans totalling £120 million via its MCC Ltd subsidiary.
Its damning report identified a serious lapse by Treasury, inappropriate operating procedures and overly-optimistic profit predictions. It concluded former chief executive Mike Proffitt should never have been authorised as the signatory for loans from a bank for which he had been appointed chairman.
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