Board Members Called To Resign Amid BISX Crisis

by Amanda Banks, Tax-News.com, London

06 November 2001

A leading Bahamian financial advisor has accused the board of the beleagured Bahamas International Securities Exchange (BISX) of engaging in 'reprehensible' fraud on the country's capital market and has claimed that all board members should resign.

The financial advisor who wished to remain anonymous due to the intregral role his company plays in the Bahamas' financial services industry, told the Bahamas Journal: 'The BISX board should resign in shame over this scandal. Management should be replaced immediately with a team who has worked in the industry and has an understanding about capital markets. The current team does not know and unfortunately the board does not know either.'

It was reported last week that the BISX is struggling to keep its head above water and could collapse if the government does not keep to its pledge to channel its business through the exchange. The exchange's shareholders agreed, during BISX's recent annual general meeting to raise around $2 million to help spur on the fledgling exchange and called upon the government to invest another $2 million to create an environment in which the exchange can thrive. So far the exchange has been funded privately with no help from the government.

However, the financial advisor commented that the blame for the 'near failure' of the exchange can not be attributed to the government. 'The fact of the matter is a company with a monopoly position in a country with poor leadership will fail and we submit this is the case, so to blame the government is a downright deceitful,' he said.

BISX shares are at a current value of $150,000 each or a premium of 20 per cent. 'No wonder BISX is not successful. It is reprehensible that the Board of Directors of BISX can put a value on its share of $150,000 each when it is on the brink of failure unless the government steps in,' the Bahamas Journal's source said.

The advisor told the newspaper that because a person or entity is prepared to pay $150,000 does not mean that the share is worth it. He argued: 'An example of this is what happened to Abaco Markets this past Wednesday when 1000 shares dropped the value of Abaco Markets by approximately 11 per cent. Now how in God's name could 1000 shares at less than $3 per share reduce the value of Abaco Markets by over $3 million.'

'Something must be wrong and unfortunately BISX does not have a clue,' he added.

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