There is reportedly outrage in the Cayman Islands after they were included in a list of “high risk jurisdictions” by the Financial Conduct Authority (FCA). The Islands Government has expressed “great consternation” at its inclusion in the list, which only became public after a Freedom of Information Act request for the list.
But anyone familiar with publicly listed companies that were or are registered in the Cayman Islands might not be that surprised. The Cayman Islands was a favourite location for companies that wished to conceal who their owners were or help to avoid tax. Companies that ShareSoc has commented on in the past that were registered in the Cayman Islands were Orchid Developments (a Bulgarian property company subsequently wound up after a petition from two of its own directors) and Leaf Clean Energy (a renewal energy investment trust, the subject of an activist campaign for reform after substantial losses). It was also mentioned as the likely destination of funds from Japanese company Olympus after a massive fraud. See the February 2013 ShareSoc newsletter for more comments on Cayman Islands regulation.
In essence surely those in the Cayman Islands complain too much although there have been moves to tighten regulation lately. But any investor should examine carefully those companies and their directors who choose to register in the Cayman Islands.
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