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WATT A MESS; LEGISLATION NOT IN PLACE TO ALLOW OVERSIGHT Watchdog refuses to say she'd have given thumbs up for PS2bn bank's boss.

Byline: John Ferguson | Political Editor

Holyrood's watchdog has refused to say whether she would have approved the appointment of a controversial banker to lead a PS2billion government fund.

Caroline Anderson, Scotland's Ethical Standards Commissioner, was grilled by MSPs over the appointment of Willie Watt - chairman of the taxpayer-funded Scottish National Investment Bank.

The Sunday Mail revealed last week how shamed former finance secretary Derek Mackay allowed Watt to take up the role without the commissioner's oversight.

He was given the job despite the firm he previously led being fined a record PS8.6million in the UK and America over a conflict of interests scandal.

Anderson was questioned over Watt's appointment on Thursday at a meeting of Holyrood's Standards, Procedures and Public Appointments Committee.

Labour's Neil Findlay asked her: "The person who was appointed will be a key figure in that bank overseeing governance and probity. If you have been asked to oversee that do you think your office would have agreed such an appointment."

Anderson answered: "I don't know whether I am able to opine on a hypothetical." She also revealed the Scottish Government made three informal approaches to her office and one formal approach but ended up rushing through Watt's appointment without its oversight because ministers had failed to have the correct legislation in place.

She said: "We were approached informally on three occasions between June 2018 and May 2019 in regards to this matter.

"On all occasions, we advised that we regulate those bodies that fall under our remit and legislation needs to be passed for that to occur. Then in June 2019, we received a formal written request from the former cabinet secretary to provide oversight of the unregulated appointment of the chair. "We went back explaining yet again the same thing, that it didn't fall within my remit.

"We did point out, as we had pointed out before, that if a section 3.3 order of the 2003 Act could be in place by the time the appointment would be made, if we were given that assurance, we could have acted.

"We wanted to be cooperative and helpful as always, but the understanding in a reply that came through the following month was that due to time pressures, that would not be possible."

Watt was CEO at Martin Currie in 2012 when it was fined PS8.6million by US and UK regulators.

The Financial Services Authority fined the firm PS3.5million, the largest amount it had ever imposed in a conflict of interest case. A further PS5.1million was imposed by the Securities and Exchanges Commission in the US which described the incident as "fraudulent".

It came after the Edinburgh firm caused one client in China to enter into a deal that rescued another of its own clients from financial meltdown.

Benny Higgins - the Government's chief adviser to help set up the taxpayer-funded bank - was heavily criticised in 2015 for spending PS18,000 on taxis in eight months while CEO of Tesco Bank at a time the supermarket was firing frontline staff.

Mackay was forced to resign last month after it emerged he befriended a 16-year-old schoolboy online and sent him 270 social media messages.

He has not been seen in public since and is understood to be having "medical assessment and treatment".

CAPTION(S):

concern Findlay. Right, Mackay

advice Anderson. Our story on Mackay. Right, Watt

questions Standards, Procedures and Public Appointments Committee
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Author:John Ferguson / Political Editor
Publication:Sunday Mail (Glasgow, Scotland)
Geographic Code:4EUUK
Date:Mar 1, 2020
Words:568
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