CEO's years of experience 'is exactly what we need,' agency chair Peter Ma declares

The beleaguered Nunavut Business Credit Corp. has a new boss.

Phillip Bhagoutie started work as CEO of the lending agency on Monday, Jan. 14. He declined to be interviewed, but Peter Ma, chair of the NBCC, said Bhagoutie has more than 10 years experience in the financial services industry, "which is exactly what we need."

No kidding. When Sheila Fraser, Canada's auditor general, released a damning report on the NBCC in November, she found the organization was such a mess, she couldn't even say how bad it was.

She issued a denial of opinion, which is just about the worst judgment an auditor general can make. It means there wasn't enough information available for her to determine whether fraud took place.

Almost all loan files she examined were missing documents. One entire loan file was gone. Data from computer hard drives had also been deleted.

Police are now also investigating the organization, to determine if fraud took place.

Fraser also found the NBCC was negligent in just about all its duties. It wasn't properly evaluating potential clients, including their credit-worthiness, or the viability of their businesses.

Nor was the NBCC properly monitoring loans, or tracking its clients who had fallen behind in payments.

So, while Bhagoutie faces a daunting task, his past experience in banking and mutual funds will likely be welcome at the tiny Cape Dorset office he now heads.

And it must be a big change from Toronto, where he most recently worked for a firm called Abundant Financial Services.

The NBCC has been without a permanent CEO since the departure of Mel Orecklin in December 2006. Ma said the board decided to hold out until they found the right person for the job.

The last interim CEO, Allan McDowell, was removed in December after it came to light he faced charges of theft and fraud. McDowell, who says the charges are baseless, is on paid leave until his court case is resolved.

The NBCC's small office, located in Cape Dorset, only has five employees when fully staffed. They're still trying to fill two jobs – compliance officer and investment manager – one of which is being held by a casual worker.

One cabinet minister, David Simailak, has already resigned as a consequence of Fraser's probe into the troubled agency, after it was found that he, the minister responsible for overseeing the NBCC, had failed to disclose interests in companies that had been loaned money.

And it's not over yet. Hearings of the standing committee on government operations and accountability resume in several weeks.

Former employees of the NBCC are expected to answer questions. Among them is the NBCC's ex-CEO, Orecklin.