The article makes reference to Harwood’s previous role as a director of the Channel Islands Stock Exchange (CISX), which, as reported, underwent a period of turmoil last year that saw its chief executive resign, a suspension of new listings for a time in October, and its replacement by a new exchange at the end of December.
According to Private Eye, Harwood, a founding director of the CISX until 2010, while also chairman of the Guernsey Financial Services Commission for a time, was therefore at that point “a shareholder/director of a company overseen by the regulator of which he was chairman”.
In a statement today, Harwood said he had tendered his resignation in recognition of “the risk to the reputation of [the office of chief minister] and the States of Guernsey, caused by recent media interest in my previous role as a director of the Channel Islands Stock Exchange”.
News that the CISX has been under investigation by the Guernsey Financial Services Commission for two years emerged in October when the stock exchange suspended new listings.
The status quo at the exchange began to be disrupted shortly after private equity veteran Jon Moulton was named chairman last April, and, according to Private Eye, appointed experienced regulator Mark Tubby to investigate it.
Tubby is compliance chief at broker FinnCap, also headed by Jon Moulton, and is also chairman of the newly-created Channel Islands Securities Exchange Authority (CISEA), which was set up towards the end of last year as part of the restructuring of CISX. In an interview with the Guernsey Press in January, Moulton said Tubby's report "found more in a fortnight than the regulators had done in the previous two years", and that the problems were so severe that there had been no choice but to create a new exchange in place of the old one.
As reported in the March issue of International Adviser, CISX's business was officially acquired by the new CISEA on 20 December, following a hearing at Guernsey's Royal Court, and is doing business now as the Channel Islands Securities Exchange, under Moulton's direction. A chief executive for the new exchange is currently being sought.
Private Eye: 'tax avoidance'
The Private Eye report, which includes material obtained by Tubby, details how CISX allegedly enabled a host of companies to avoid UK taxes between 2005 and mid-2013, through the use of various schemes, one of which, it notes, ended in the conviction in 2012 of two former HMRC officials, David Perrin and Roy Faichney.
In his statement today, Harwood said that the uncertainty concerning the final outcome of the investigation by the [GFSC] would “focus unnecessary media attention on my continued role as chief minister, and that attention would be to the detriment of the reputation of that office and the [Guernsey] Policy Council.
“Such attention would also seriously detract from the vital ongoing work of the Policy Council and its sub-committees; the Special States Committees that I chair, and the departments of the States of Guernsey.
“It is now important that we proceed as quickly as possible with the process of electing a new chief minister.”
In an accompanying statement today, Guernsey deputy chief minister Jonathan Le Tocq said the States of Guernsey is expected to choose a successor to Harwood at its meeting next month, subject to confirmation by various government entities. Until then, Harwood will continue to be responsible for chairing Policy Council and other committees and subgroups, as normal.
In a telephone interview with International Adviser today, Moulton said he had little to say on the matter of Harwood's resignation, but added that he did not believe it would affect the new Channel Islands securities exchange.
"We have completely reconstructed everything, through the courts, and it has emerged with a completely new structure, a new team, [with] statutory immunity, and a rather stronger attitude towards making sure things are [done] right".
