News

Clearing house chief resigns in wake of debacle

Christian Annesley

The CEO of the LCH.Clearnet pan-European clearing system resigned yesterday following boardroom disputes over the company’s failure to merge its technology platforms in the three years since it was created.

LCH.Clearnet was formed by the merger of London Clearing House and Paris-based Clearnet.

David Hardy’s decision to step down comes less than two months after the departure of chairman Gérard de La Martinere.

The exit of both men follows LCH.Clearnet’s write-down last year of nearly £14m of costs pumped into the firm’s long-delayed integration of its two trading platforms.

When LCH and Clearnet merged in 2003, a key plank of the deal lay in the “significant savings” to be derived from platform consolidation.

The Generic Clearing System project, in which tens of millions of pounds were invested, was intended to replace more than 30 legacy systems with a single platform-based Java and Oracle technology. But the project missed a series of milestones and missed its first slated launch date of October 2004.

By May last year, work on GCS was suspended and the bulk of the 140 IT staff involved were moved onto other projects, while LCH.Clearnet called in Accenture to conduct an external review. The write-down of £13.9m subsequently appeared in its 2005 results, published in March this year.

LCH.Clearnet said yesterday that it had appointed Chris Tupker, the outgoing chair of Euroclear, which owns nearly half of the firm, as chairman. Tupker will also fulfil CEO duties until a replacement is found for Hardy.

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