Responding to Phillips’ claims that the CII had responded to the PFS board’s demands “diligently, professionally and with immense goodwill”, Barnes said this was “factually not true”.
“I am not aware of any PFS board demands, only CII demands,” she wrote.
Bank loan concern
Part of the disagreement stems from a bank loan, for which Barnes said the CII had placed “unreasonable pressure” on the PFS board to act as a guarantor.
Barnes said the PFS board had engaged an external advice team to perform the required due diligence to facilitate the loan, which had raised concerns around the CII’s forecasts and said there was a “significant risk” the CII would not be able to repay the loan.
“As much as I and my board colleagues were willing to provide financial assistance to the CII to avoid disruption for our members, my duties and obligations and due governance to the PFS meant that I could not agree to a loan of the members’ reserves,” Barnes said.
Barnes also refuted allegations that the PFS board was seeking to exclude the CII group audit and risk committee from oversight of audit and financial statements. Instead, she said, the PFS should consider forming its own audit & risk committee.
She said she had previously raised concerns over the CII’s cash position in June 2021, over concerns it could fall below the level of the PFS reserves.
“I was told that there was no requirement for the PFS board to be informed in that event and that the CII did not consider this of material risk to the PFS.”
She added the PFS board did not have sight of the rest of the PFS reserves, and she was concerned that the reserves were being used to prevent further calls on the CII’s own long term investments.
More allegations
Other allegations refuted by Barnes included the CII’s claim that it would continue to provide and maintain all PFS member services, as well as the PFS board’s “lack of collective decision making”, the exclusion of institute-appointed directors from PFS board meetings and the “inappropriate” establishment of a sub-committee.
In response, Barnes highlighted issues she had experienced personally with SPS applications and renewals, and said as part of her director’s duties had questioned the CII’s “deteriorating service standards and delivery”.
“I have experienced a range of excuses through repeated enquiries without resolution.
“I am aware from a whistleblower employee at the CII that complaints from PFS members have been suppressed and not brought to the attention of the PFS board or CEO.”
