THE past few weeks have been among the most exciting - and anxious - for Mr Rowland Fleming, 53, Dublin born president and chief executive of the Toronto Stock Exchange.
Just as he was hosting an enormous party to bid farewell to live trading on the 150 year old exchange floor and to welcome in electronic dealing, he found himself at the centre of the biggest gold mining scandal in history.
The collapse of Bre-X, a Calgary based mining company that claimed to have found more gold in Indonesia than that from the California and the Klondike gold rushes combined - began last March when a survey of the mine by its US partner suggested it was virtually empty. Fuelled by rumours and counter claims by Bre X executives, the shares soared and plummeted in the days leading to the April 24th close of the trading floor. On the day of the big party, 17 million shares changed hands. It was the last, and one of the most volatile, days on the Toronto Stock Exchange.
Interviewed by The Irish Times at his office in the heart of Toronto's financial district just a few days before a final consultant's report into Bre-X was released, Mr Fleming was choosing his words very carefully: "From time to time a listing attracts larger than life attention - especially from retail investors - and this is one of those times. A cold, sober look at the facts shows it is an exploration company that everybody got more excited about than they should have. Many people have lost and gained a lot of money. But we still don't have the whole story. There may or may not be gold but we cannot assume the company has deceived its shareholders. We'll know more when the Strathcona report comes out." (Strathcona Mineral Services was the independent geological company Bre X was forced to hire to assess the mine.)
Events have shown that the Strathcona survey not only found that "there was no possibility of an economic gold deposit in the hard rock mine", but that "the magnitude of tampering with core samples... resulting in falsification of as say values is of a scale and over a period of time without precedent in the history of mining anywhere in the world".
With the share price down to six cents on May 5th - it had been worth $192.50 Canadian dollars (£90.80) at its opening trade a year ago - Mr Fleming halted, then delisted the stock on the TSE. The US Nasdaq followed suit. Losses are put between $4 billion and $5 billion and at least a dozen legal actions are pending against Bre-X executives and geologists, one of whom has gone to ground at his $3 million estate in the Cayman Islands.
The Mounties have opened a criminal investigation and the Exchange itself has been criticised for including this highly speculative stock in its benchmark TSE-300 index, an investment vehicle popular with investors seeking to minimise their risk. Many are wondering why the listing was not suspended when the company's chief geologist fell out - or jumped out - of a helicopter to his death on March 19th on his way to a meeting in Indonesia with the American partners.
Mr Fleming is a relative newcomer to stocks and share trading, having joined the TSE just two years ago, but he has 30 years experience in the tough world of banking, insurance and finance, all of which began at the Bank of Ireland in Dublin in 1962.
Born in 1943 - his father had a joinery business, his mother was a graduate of Trinity College - he was raised mainly in the village of Ardamine, Co Wexford, where his elderly parents still live. He was the only Protestant boy to go to the Christian Brothers School, five miles away at Gorey.
"My parents didn't have the money to send me to boarding school so I went to the CBS. I was the only Protestant among 200 Catholics and I think it was there that I learned about religious differences, but also a lot about tolerance."
When he left school he did the bank exams. "There was a limited choice back in 1962. If you were lucky it was either a job at Guinness, the bank, the civil service or you emigrated. Since I didn't have very good Irish the civil service was out. My parents were determined that I should land a pensionable job so I took the bank exams and passed and was offered a place by both the Royal Bank and Bank of Ireland."
He says those were desperate years: "It was dreadful, I couldn't believe what I'd gotten myself into. I was posting ledgers all day; I spent a year filing cheques. When you joined they gave you a sheet with all the salary increments on it for the next 30 years so that you could predict, with a certain accuracy, what your salary was going to be from one year to the next. Yet I couldn't even afford my digs in Dublin and had to be subsidised by my parents."
The three month bank strike in 1966 proved a godsend and when it was over he didn't go back, "much to the horror of my parents". The 23 year old ex bank official spent the next year "working and having a good time", but then spotted that a newly set up branch of the Bank of Nova Scotia in Dublin was looking for staff.
"The international connection appealed to me enormously. It was Canadian - foreign. And I got a job as a teller. I learned a huge amount and by 1970 I was transferred to London and was soon learning about the developing Eurodollar market, international credit and lending and balance sheets." He found himself generating Eurodollar loans to third world countries, putting together North Sea oil projects and financing Norwegian shipping.
In the summer of 1974, with his wife and one year old baby, he was transferred to Bank of Nova Scotia in Toronto and within two years was working on Wall Street and later in Boston. Back to Toronto for good in 1979, he worked his way further up the corporate ladder and in 1986 was appointed executive vice president for the entire Canadian operation of the bank.
When the chief executive's job went to someone else in 1989 he left to head up a large insurance company, Dominion of Canada. In 1991, he become deputy chairman, president and chief executive of the National Trust Company, an investment firm with $16 billion in assets and $33 billion under management.
"I've had an episodic life. I didn't know anything about insurance when I took over Dominion or investment trusts when I took over National Trust. But I had to make some tough decisions there and turn these companies around to make them relevant to the 21st century. If I have discovered one thing about myself it is that I am good at solving problems and managing change, suppose because I've had to manage a lot of change in my own life."
Though he didn't think so when he was first approached to run the Toronto Stock Exchange, one of Canada's most stuffy financial institutions, but ranked ninth in the world, the job was ideally suited to his skills. Despite having nearly 1,400 companies listed, the TSE was facing a serious technology problem and was losing ground to other, more competitive markets. As extraders and brokers themselves, the managers of the exchange were obsessed with the daily ups and downs of the market and had lost sight of their strategic responsibilities.
The first thing he did was abolish the fourcourse boardroom lunch with fine wines that the managers treated themselves to once a week. "I substituted an 8 a.m. breakfast meeting, bring your own muffins. I also asked a lot of questions and soon discovered that the technology problem had become the lightning rod for the emotional capital and morale of the exchange. And it had been enormously expensive."
Four years and $15 million after the start of the computerisation project which involved customising the system for the TSE, "they were further away from a solution than when they started. Three months after I took over I cancelled the project and had to let go 10 per cent of the staff."
Once the technology issue was settled, Fleming concentrated on the business side of the Exchange, trying to improve services to members, companies and institutional and private customers.
"The TSE has to become more relevant. If a major company asks why they should list on the TSE rather than somewhere else we have to be able to say why. We haven't always been able to give them a clear answer. Nor have we enough products to respond to domestic or international investor interest, and that is a big part of my job now.
Educating the public about the ways of the market has also been a priority and a state of the art visitors' centre and web site are opening soon. His interest in Ireland hasn't diminished entirely, despite taking out Canadian citizenship. Aside from regular visits to his parents and family holidays in Wexford - he has two children, one a banker, the other an actress - Mr Fleming is a member of the Canada Ireland Fund, where he says he works behind the scenes to do what he can to promote Canadian investment in the 32 counties.
The increasing prosperity in the Republic, he says is heartening, and he admits he was approached a few years ago to see if he would be interested in heading up a major Irish public company. (He declined because of his commitment to National Trust at the time.)
"I don't wear Ireland on my sleeve, but I keep it in my heart. And if you ask me where I will be in two or three years time, I don't think I could say with any certainty. Moving back to Ireland is not on the horizon but if tomorrow something happened which posed a new opportunity or challenge I'd certainly consider it.
"I don't go through life looking in a rearview mirror, but I know there is a road back."
