Thursday August 21, 2014 - 3:31 am | Login

Reserve Bank appointment

Dear Editor,

I write to you with corrections of the errors in your front page article entitled “Concern over RBV reputation” on 19 October 2013.
1.Minister Salwai did not terminate me as a director of the Reserve Bank last March as you claim in your 19 October issue, and as you wrongly published on 21 March 2013.

2.I was not appointed in March 2013 (“at that time”), as you claim. I was appointed over a year previously, on 12 March 2012. Minister Salwai’s purported removal of me in March 2013 as you reported, did not occur.

3.Minister Simelum, erroneously, purported to remove me on 26 July 2013 based on Section 9(3)(c) of the RBV Act. That subsection is the authority to appoint, not remove a director.

4.I have challenged the purported “removal” of me as a director. On 28 August 2013 Minister Simelum reappointed me as a director of the RBV pursuant to Section 9(3)(c). That is to say I was recognised as having the relevant degrees, having the relevant experience and having the relevant competence to carry out my responsibility, just 30 days after my purported removal due to alleged incompetence.

5.Section 9(3) of the RBV Act covers removals. The Minister did not purport to “disqualify” me, but rather to “remove” me. There are only three grounds for “removal” of a director of the RBV. They are to fail to have:

(a) a degree in finance, management or other related fields from a recognized university. I hold a Bachelor of Science in Business Administration from Lehigh University and a Master of Business Administration from Wharton School of Finance in the USA. The Wharton School of Finance is, recognised as one of the top graduate business schools in the world, and
(b)relevant working experience in finance, management or other related field. I have almost 50 years of actual finance and management experience, in Vanuatu, Singapore, Melbourne, Sydney and Washington D.C., and
(c) competence in carrying out his responsibilities under the Act. I challenge anyone to produce any evidence of incompetence on my \behalf.
6.There has never been any official action to have my appointment “disqualified” pursuant to any Section of the RBV Act.

7.You wrote that Minister Salwai terminated me for my conflict of interest based on my association with European Bank. That is false reporting. For the record, disqualification is covered in Section 8(10)(b). An RBV director is disqualified “if he becomes a director, officer or employee of a company other than the Reserve Bank engaged wholly or mainly in banking business”. For the record (which you could have verified at the VFSC Office) I resigned as a director of European bank in 2002, more than 10 years ago. I was never an officer of the European Bank and was never an employee.

8.I strongly believe that the RBV board needs members with banking experience. The more experience, the better. Why does anyone support having a RBV board without members with banking experience? So they “won’t” have the knowledge to ask pertinent questions? 9.In comparison, all the Federal Reserve banks in the USA have current CEOs of commercial banks on their board. The New York Federal Reserve Bank has nine members. There three Class A directors are current CEOs of commercial banks and each is a voting member. Why does anyone in Vanuatu think our country would have a better RBV if we did not have people with current banking experience on the board?
Other errors of fact in your article.

a. Minister Salwai did not terminate me for conflict of interest as you claim. For the record, in response to rumours, on 28 December 2012 I wrote to Minister Salwai and asked if he had any concern that I may have a conflict of interest. He never advised any such concern.

b. You have simply relied on your own previous article (21 March 2013) as your source and have repeated the same false statements you made then.
c. There is no company called the Bayer Group and never has been. In 2011 I did retire as an employee, but not from European Bank as I was never an employee of that company.

d. Benjamin Shing was not appointed to the RBV board in March this year. He was purported to have been appointed in 28 July 2013, but such purported appointment could only have been valid if my “removal” was valid.
e. The Prime Minister did not on Friday 11 October propose that the term of the RBV Governor be extended to ten years. He proposed that the maximum appointment be limited to two five year terms.
f. Tom Bayer would not be able to call an RBV board meeting, as you claim, if the PM’s announced changes became law.

Thomas M. Bayer
Reserve Bank
Board Member

Editor’s Note:
Daily Post initially based its report on a statement released by the then Minister of Finance, Charlot Salwai who “removed” Mr Bayer. While Mr Bayer rightly pointed out that no such company called Bayer Group exists, the documents at the Vanuatu Financial Services Commission acknowledged that PITCO, a company that deals with “securities” of which Bayer is very much involved, identifies the company as belonging to the Bayer group of companies and a 2011 article on his “retirement” with well wishes from his own staff also mentioned his group of companies. The files for the European Bank could not be accessed at VFSC as we were told the papers in the file needed to be sorted. We will access them when they are available.