Controversy Abounds Over BISX Rescue Plans

by Carla Johnson, Investors Offshore.com

14 November 2001

Debates over the future of the beleaguered Bahamas International Securities Exchange (BISX) continue to rage this week with the latest interjection from the Institute for Economic Freedom (IEF). According to Gilbert Morris of the IEF, the BISX should cease its pleas for government help and taxpayers' money and instead draft a new business plan to rebuild investor confidence.

Speaking to the Bahamas Journal this week, Mr Morris responded to BISX chairman Ian Fair's calls to the government to bring the exchange back from the brink of collapse by keeping its pledge to channel its business through the exchange. So far the exchange has been funded privately with no help from the government.

The government has yet to officially respond to BISX shareholders who said that they would raise up to $2 million to help rescue the fledgling exchange, only if the government would match their offer.

But Mr Morris, who described Ian Fair's request as 'galling', said: 'Under no circumstances should BISX receive taxpayer cash unavailable to companies under its stewardship. And certainly no company should be the subject of taxpayer largesse.'

He added: 'Taxpayer funds should not be used to secure the profitability of private investment decisions. This should force BISX to come up with a model to secure shareholder returns.'

Mr Morris, who also works with the Security Policy Group International, criticised BISX shareholders for failing to take responsibility for its problems. He told the Bahamas Journal: 'Rather than begging the government to place the privatized utilities with BISX, it ought to get to work and show how such a move will benefit the investor by creating a greater more directly sustainable supply of investment vehicles.'

'The exchange should release its proposals for public consumption, showing why it should be given the opportunity to trade public pensions or treasury instruments,' he continued.

Mr Morris also recommended that a real time table on privatization of public enterprises be released and that considerations on the possibility of an equity distribution through BISX be clarified.

'BISX regulators must understand that they are not in charge of the listed companies and BISX cannot micromanage company decisions or replace the duty of shareholders in policing and punishing companies for their decisions," Morris said. "Market regulation is a limited function having nothing to do with management decisions, so long as such decisions are lawful and pose no conflicts,' he concluded.

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