Lord Wallace calls for tighter regulation of British territories

Saturday, January 24, 2004

LONDON, England: Liberal Democrat Peer, Lord William Wallace of Saltaire, has called on the British Government to tighten its regulation of offshore financial centres under British sovereignty, in light of the recent Enron and Parmalat scandals.

In a question in the House of Lords on Wednesday, Lord Wallace said, "690 of the 800 offshore subsidiaries established by Enron and the largest contested account in the collapse of Parmalat were based in the Cayman Islands, a British dependency."

"The financial world cannot afford another multi-national scandal. It's high time British regulation of offshore financial centres was tightened," he added.

Just over a month ago, Parmalat revealed a $5 billion hole in the accounts of a Cayman Islands subsidiary, forcing Italy's eighth-biggest company to request bankruptcy protection. 

Eleven people, including Parmalat's founder, have been arrested in the subsequent investigation by the Italian authorities.

Regulators around the world, including those in Holland, Brazil and the US, are also investigating the massive fraud at Parmalat.

Although Italian regulators have denied any blame for failing to detect the fraudulent activities at Parmalat, Giulio Tremonti, the country's Finance Minister, has announced plans to reform the patchwork of regulators currently supervising Italy's markets. The intention is to create a single, unified watchdog, modelled in part on Britain's Financial Services Authority. 

The Cayman Islands government launched an investigation before Christmas to establish if people there connected to the Parmalat-related companies had committed fraud or money-laundering offences, but no information has been released as to the outcome of this investigation. 

  Back...

  Most popular articles: viewed, printed and e-mailed

  Printable version