The explanation of its role in the events surrounding the Fyffes versus DCC insider dealing controversy offered by the Irish Stock Exchange is neither comprehensive nor fully convincing.
Its statement, issued yesterday, honed in on one issue, which was the willingness of the exchange to pass on information to the Director of Public Prosecutions (DPP) from DCC. This information was intended by DCC to undermine any criminal prosecution the DPP might have been contemplating over DCC's decision to sell its shares in Fyffes on the basis of allegedly insider information. The exchange has argued that it was appropriate for it to pass on the information as the DPP should be in possession of all the facts.
However, the exchange did not address damaging evidence given during a related court case which painted it as an organisation that was happy to see the whole issue brushed under the carpet. It appeared willing also to filter information to see if it favoured DCC's position before passing it on to the DPP and provided a channel by which information on the DPP's position was conveyed to DCC, according to the evidence.
The chief executive of the exchange addressed some of these issues yesterday in a follow-up interview. Although his explanations are plausible, a significant doubt lingers over the impartiality of the Irish Stock Exchange in discharging its function as regulator of the Irish stock market. This in turn calls into question the appropriateness of the self-regulatory model which has at its heart a stock exchange accountable to a board dominated by the main stockbroking firms.
It is clear that DCC and its advisers were able to put significant pressure on the exchange. This was facilitated by the unhealthily close relationship between the company, its advisers and members of the stock exchange board and management.
The Irish Stock Exchange remains damaged. The Minister for Enterprise, Trade and Employment, who has ultimate responsibility for the regulation of the market, has expressed concern about what emerged. Now it is time for him to look closely at whether the current structure serves the interest of investors in a business community that is so small and so tightly knit.
This question is best answered by posing another one. After all that has emerged about the stock exchange's role in the events surrounding the case and the explanation offered yesterday, would a rational person be more or less inclined to invest money in the Irish market? The answer is no.