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•Shaw flexes muscles
By Durrant Pate
Senior Staff Reporter
Reports are that a disagreement between Finance Minister Audley Shaw and former chairman of the Financial Services Commission (FSC), Michael Hylton, triggered his sudden resignation, recently. Informed sources told the Sunday Herald that other board members are considering walking because of what sources described as ministerial interference.
The charges, according to sources, stem from Minister Shaw’s disagreement with the FSC’s December 28 decision to issue a cease and desist order against Cash Plus, and his decision to revise the process for recruiting a replacement to fill the post of executive director for the FSC.
The FSC, which is mandated to regulate financial institutions, has been fighting a legal battle to have the alternative investment schemes and clubs like Cash Plus, Olint and Lewfam, regulated.
Reports reaching the Sunday Herald were that Minister Shaw was “flabbergasted with the drastic action taken by the FSC against Cash Plus”. Having learnt of the FSC’s intention to go against Cash Plus, reports indicated that the minister summoned Hylton to a meeting in late December. At that meeting, Shaw reportedly urged the FSC chairman not to effect the cease and desist order, but instead, to take a milder approach to bring the investment company in compliance with the law.
Minister Shaw’s rationale, according to sources, was to preserve confidence in the financial sector, as it was felt that any drastic action could trigger a run and undermine confidence. It was understood that Hylton disagreed and went ahead with the decision against the Carlos Hill-led entity, which has an investment portfolio of over $16 billion.
Sources also confirmed that Hylton did tell the minister that the FSC would be issuing a cease and desist order against Cash Plus. The minister reportedly raised a question about the timing of the action, pointing to the pending court case involving both Cash Plus and the FSC. Minister Shaw, sources indicated, opined that it would have been better for the FSC to await the court case slated for hearing on January 23, to determine whether the FSC has the power to regulate Cash Plus.
Interfered in recruitment
Regarding the search for a new FSC executive director, it has been reported that Minister Shaw interfered in the recruitment exercise, overstepping his bounds in demanding that a candidate that he had identified, should be interviewed.
Hylton, according to sources, openly expressed his disagreement, pointing to the fact that the FSC had been in communication with Don Wehby, the Minister Without Portfolio in the Ministry of Finance & the Public Service, on the recruitment process.
The reported response from Minister Shaw was, “I’m the one you should speak with,” implying that the FSC should have consulted with him, in addition to Minister Wehby, who has direct portfolio responsibility for the FSC. This episode, according to sources, left some confusion as to which minister the FSC should report to.
Hylton would neither confirm nor deny that the charge of political interference was the cause for his sudden departure. When contacted, he dismissed the suggestion that he complained of political interference in his resignation letter, which took effect on Friday.
Hylton, who chaired his last FSC board meeting on Wednesday, said the focus now ought not to be on the reasons for his sudden departure, “but the new guidelines being put forward by the government to regulate the alternative investment schemes.”
No political interference
Responding to queries, Minister Shaw acknowledged that Minister Wehby had day-to-day responsibility to interface with the FSC, but said he – Shaw – held that responsibility over the recent holidays while Wehby was out of office.
“There was absolutely no political interference in my consultation with the chairman of the FSC. The Financial Services Commission Act gives me, as minister, the right to consult with the chairman of the commission and to give policy directions of a general character. Accordingly, all the matters discussed in my consultations with the chairman fell squarely within that ambit. This included the question of whether or not the deputy executive director should act as executive director for a period.” Shaw said. .
By Durrant Pate
Senior Staff Reporter
Reports are that a disagreement between Finance Minister Audley Shaw and former chairman of the Financial Services Commission (FSC), Michael Hylton, triggered his sudden resignation, recently. Informed sources told the Sunday Herald that other board members are considering walking because of what sources described as ministerial interference.
The charges, according to sources, stem from Minister Shaw’s disagreement with the FSC’s December 28 decision to issue a cease and desist order against Cash Plus, and his decision to revise the process for recruiting a replacement to fill the post of executive director for the FSC.
The FSC, which is mandated to regulate financial institutions, has been fighting a legal battle to have the alternative investment schemes and clubs like Cash Plus, Olint and Lewfam, regulated.
Reports reaching the Sunday Herald were that Minister Shaw was “flabbergasted with the drastic action taken by the FSC against Cash Plus”. Having learnt of the FSC’s intention to go against Cash Plus, reports indicated that the minister summoned Hylton to a meeting in late December. At that meeting, Shaw reportedly urged the FSC chairman not to effect the cease and desist order, but instead, to take a milder approach to bring the investment company in compliance with the law.
Minister Shaw’s rationale, according to sources, was to preserve confidence in the financial sector, as it was felt that any drastic action could trigger a run and undermine confidence. It was understood that Hylton disagreed and went ahead with the decision against the Carlos Hill-led entity, which has an investment portfolio of over $16 billion.
Sources also confirmed that Hylton did tell the minister that the FSC would be issuing a cease and desist order against Cash Plus. The minister reportedly raised a question about the timing of the action, pointing to the pending court case involving both Cash Plus and the FSC. Minister Shaw, sources indicated, opined that it would have been better for the FSC to await the court case slated for hearing on January 23, to determine whether the FSC has the power to regulate Cash Plus.
Interfered in recruitment
Regarding the search for a new FSC executive director, it has been reported that Minister Shaw interfered in the recruitment exercise, overstepping his bounds in demanding that a candidate that he had identified, should be interviewed.
Hylton, according to sources, openly expressed his disagreement, pointing to the fact that the FSC had been in communication with Don Wehby, the Minister Without Portfolio in the Ministry of Finance & the Public Service, on the recruitment process.
The reported response from Minister Shaw was, “I’m the one you should speak with,” implying that the FSC should have consulted with him, in addition to Minister Wehby, who has direct portfolio responsibility for the FSC. This episode, according to sources, left some confusion as to which minister the FSC should report to.
Hylton would neither confirm nor deny that the charge of political interference was the cause for his sudden departure. When contacted, he dismissed the suggestion that he complained of political interference in his resignation letter, which took effect on Friday.
Hylton, who chaired his last FSC board meeting on Wednesday, said the focus now ought not to be on the reasons for his sudden departure, “but the new guidelines being put forward by the government to regulate the alternative investment schemes.”
No political interference
Responding to queries, Minister Shaw acknowledged that Minister Wehby had day-to-day responsibility to interface with the FSC, but said he – Shaw – held that responsibility over the recent holidays while Wehby was out of office.
“There was absolutely no political interference in my consultation with the chairman of the FSC. The Financial Services Commission Act gives me, as minister, the right to consult with the chairman of the commission and to give policy directions of a general character. Accordingly, all the matters discussed in my consultations with the chairman fell squarely within that ambit. This included the question of whether or not the deputy executive director should act as executive director for a period.” Shaw said. .
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