Imro chief claims he was gagged over SIB

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The Independent Online
A senior City regulator disclosed yesterday that he felt under severe pressure from his boss to water down an attack on the City's top watchdog, the Securities and Investments Board.

Phillip Thorpe, chief executive of Imro, the investment managers' watchdog, claimed he was pressured by his chairman, Charles Nunneley, shortly before giving evidence to a committee of MPs. Mr Thorpe said he felt he had been told not to criticise the role of the SIB, the City's leading regulator, after Mr Nunneley had spoken earlier to SIB's chairman, Andrew Large.

It is understood that the Imro chief executive felt that if he were to answer fully questions put to him by members of the Treasury and Civil Service select committee, he would lose his job. The decision that he should not speak out was taken at a prior meeting between himself and Mr Nunneley on Wednesday.

Mr Thorpe's claims cast doubt on the willingness of financial services watchdogs, who operate under the industry's self-regulating mechanism, to open their activities to scrutiny.

Mr Thorpe said: "I was not able to say what I wished to say or to go into the detail I wanted to. I feel frustrated by what happened. It is difficult to reconcile this with the desire of regulators to be open and accountable. The regulatory system as a whole will only receive the confidence of investors if we can have open debate. There are weaknesses that need to be addressed."

Erskine May, the parliamentary rule book, says that it is a breach of privilege to intimidate or influence those giving evidence to a select committee.

Labour MP Mike O' Brien, who sits on the committee, said: "This is a very serious allegation by Mr Thorpe. I shall be referring it to my colleagues . We will have to consider whether this amounts to tampering with a witness. If we consider that it was, the committee will make a report to the House of Commons as a breach of privilege."

Mr O' Brien's comments follow the publication in the Independent on Wednesday of Imro's submission to the select committee. The document strongly attacked SIB's effectiveness as the overall supervisor of frontline financial services regulators.

But when Mr Thorpe appeared before the committee on Wednesday, he repeatedly refused to be drawn on the submission.

Mr Thorpe said that shortly before the committee meeting the chairman informed him that he had spoken to Mr Large and received a letter from him. "The line that was determined [by Mr Nunneley] was that we should not go publicly into the detail of our disagreements with SIB because the mandate from our board was to take the issue directly to the regulator." Mr Thorpe agreed yesterday that this contradicted the tenor of Imro's submission to the select committee.

His allegations were strenuously denied yesterday by Mr Nunneley, who is also chairman of Fleming Asset Management, a leading City investment firm.

"There are bound to be differences but sometimes they have to be subsumed," he said. "It was not my intention to stop Mr Thorpe from speaking." But if he were to speak to the select committee, Mr Thorpe's comments had to reflect the views of the Imro board, not his own.

Mr Nunneley also denied that he had put pressure on his chief executive after speaking to SIB's chairman, or that Mr Thorpe's job was threatened: "It is not nor has it ever been the case. Phillip is an excellent chief executive. I am totally supportive of him."

SIB refused to comment.

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