Charlie McCreevy and WorldSpreads plc.

later12

An intriguing news story has arisen in relation to one Charlie McCreevy and his role as non-executive director of WorldSpreads, a plc based in Dublin.

A new management team at WorldSpreads Group Plc, following on from the resignations of its co-founder and Chief Financial Officer, has found "irregularities" and the company has ceased trading while it assesses its financial situation

http://www.rte.ie/news/2012/0316/worldspreads-business.html

The Group's CEO, co-founder and biggest shareholder Conor Foley resigned on Wednesday, two weeks after the Chief Financial Officer Niall O'Kelly had tendered his resignation.
After their appointment, the new management team engaged in a detailed review of the state of the business.

Executive Chairman of WorldSpreads Group plc Lindsay McNeile told RTÉ this evening said the review had identified "material and serious" issues of concern in the business.

It was decided that trading of the shares should be suspended from trading on the London pending a full investigation of the business.

Former finance minister Charlie McCreevy joined the board of Worldspreads in March 2011.

The role of a non executive director, while non strategic, is essentially a role in overseeing compliance with company law and good corporate governance. As far as I am aware, Irish company law does not differentiate between non executive and executive directors in many respects.

I'm sure nobody here would suggest that McCreevy is complicit in any wrongdoing.

Nevertheless, there is an irony in the former Commissioner for the Internal Market, who has played a strategic role in EU Company law and Corporate Governance, finding himself in such a potentially compromising position.

While taking up a non executive directorship is almost a rite of passage for former politicians, I think examples like this must cause us to question such career progressions.
We must address some serious issues about the need for a cooling off period upon a politician or senior public official leaving office and taking up directorships or other roles which could potentially give rise to concerns over conflict of interest.

AlekSmart

later12 wrote: »

An intriguing news story has arisen in relation to one Charlie McCreevy and his role as non-executive director of WorldSpreads, a plc based in Dublin.

I'm sure nobody here would suggest that McCreevy is complicit in any wrongdoing.

.

This is a very interesting direction for a thread to follow.....

Would you care to elaborate (carefully,of course) on either the numbers here who WOULD most definitely ascribe to such a suggestion,or secondly the nature of the word "Wrong" as used in wrongdoing..?

Dirk Gently

later12 wrote: »

Nevertheless, there is an irony in the former Commissioner for the Internal Market, who has played a strategic role in EU Company law and Corporate Governance, finding himself in such a potentially compromising position.

.

I'm not seeing the irony tbh.

later12

Dirk Gently wrote: »

I'm not seeing the irony tbh.

As Internal Market Commissioner, McCreevy had an extensive role in proposing EU company law, accounting, auditing and sound corporate governance policy. He also had a central role to play in the regulation of the financial sector.

Shortly after, he became a director of a company with special responsibility for corporate oversight, particularly in relation to overseeing the implementation of (often his own) oversight procedures, and ensuring their quality.

That company has now exhibited "irregularities" of a "material and serious nature"

I would consider that a somewhat ironic position for a man to find himself.

AlekSmart wrote: »

Would you care to elaborate (carefully,of course) on either the numbers here who WOULD most definitely ascribe to such a suggestion,or secondly the nature of the word "Wrong" as used in wrongdoing..?

I am trying to be fair to boards.ie. None of us are in a position to suggest McCreevy was guilty of wrongdoing.

I think this issue is one of political interest, but also of relevance in relation to the careers of public official subsequent to their terms of office. It isn't intended as a witch hunt.

Dirk Gently

later12 wrote: »

As Internal Market Commissioner, McCreevy had an extensive role in proposing EU company law, accounting, auditing and sound corporate governance policy. He also had a central role to play in the regulation of the financial sector.

Shortly after, he became a director of a company with special responsibility for corporate oversight, particularly in relation to overseeing the implementation of (often his own) oversight procedures, and ensuring their quality.

That company has now exhibited "irregularities" of a "material and serious nature"

I would consider that a somewhat ironic for a man to find himself.
.

It depends on how he saw his role, as a regulator or as someone who discourages regulation and used his position to facilitate this view. If he saw himself as a promoter of regulation it would be considered ironic alright. If he saw himself, as I did, as someone who facilitated loose regulation through his role then it's not at all ironic that he lacked some "attention to detail" in his own private dealings.

Just like having an EPA doesn't necessarily help environmental protection, it all depends on the ideology of the people in the role.

It's too early to comment though. This might not have anything at all to do with CmcC. Best to wait until the outcome of the investigation before jumping to conclusions.

later12

The role of a non executive director is oversight. That's a fairly standard, non controversial comment. Particularly so for a plc traded on the London Stock Exchange.

I'm not jumping to conclusions. The story is only emerging and I have said this shouldn't be a witch hunt. But it does have political relevance on three fronts.

Firstly, relating to the career of a high profile former Minister for Finance.

Secondly, relating to suitability of certain roles taken up by high ranking public officials subsequent to leaving office.

Thirdly, Ireland's image abroad in terms of corporate governance.

The Telegraph now has a piece covering the story too.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9149376/WorldSpreads-shares-suspended-over-irregularities.html

"They came across an issue in the financials that made them extremely uncomfortable and caused them to make the necessary reports to our regulator," he said. "It has hit us like a sledgehammer, it is [a] completely new [issue]."

WorldSpreads had already revealed that as of the end of last month it had not been paid €1.65m (£1.37m) which was due before Christmas relating to the managment buy-out of its Irish business.

nuac

afaik all directors are liable in company law - no distinction between executive and non-executive directors

Dirk Gently

some more today on this.....

http://www.rte.ie/news/2012/0319/worldspreads-business.html

Following the suspension of trading in WorldSpreads shares on Friday, the group announced this morning that Jane Moriarty and Samantha Bewick of KPMG had been appointed as joint special administrators of WorldSpreads Limited.

It said customers were owed a total of around £29.7m, whereas the company had total cash balances of £16.6m.

Ms Moriarty told Reuters job cuts were likely. "Our aim is to close down the business, collect the cash and give it back to customers. There won't be a prospect of a sale of the business because the problems have come up so quickly and there will be some redundancies," she said.

later12

The FSA in the UK is "expected to formally contact City of London police after discovery of £13m black hole" according to various British newspapers this morning.

http://www.guardian.co.uk/business/2012/mar/19/police-investigate-financial-bookmaker-worldspreads?newsfeed=true

Godge

Scams like these rarely arise over a short period of time. Generally they build up from small beginnings into a colossal scam.

The timing of McCreevy's arrival is interesting. He only joined the board in March 2011 and this came out in March 2012, during which he will have only seen one full year of the company's operation. Rather than implying somehow that McCreeevy may have been delinquent in his job, wouldn't a suggestion that McCreevy's arrival on the board coincided with a deeper examination by the directors of what was going on and led us to this point where the scam or "irregularities" is being uncovered fit the information as we know it better?

P.S. I have little liking or respect for McCreevy's policies while Minister but he does appear to have a sharp brain.

liammur

It seems about £13m is missing. They mustn't have hedged some bets. I would say they were caught out by the bull run, like many traders.