Cayman Defends Itself Over Parmalat Affair

by Robin Pilgrim, LawAndTax-News.com, London

02 March 2004

The financial community in the Cayman Islands has been shocked to find the Islands featured in banner headlines across the world as a result of the Parmalat affair, in which a Cayman-based Parmalat subsidiary was unable to produce a few billion dollars featured on its balance sheet.

The Cayman Island Financial Services Association (CIFSA), has issued a statement in the Islands' defence, saying that CIFSA, formed in December 2003 to promote the integrity and quality of the Cayman Islands financial services, confirms that the Cayman Islands authorities are working closely with the Italian financial regulators investigating the alleged Parmalat fraud.

'The Cayman Islands, ranked as one of the world's largest financial centres, takes issues of financial probity extremely seriously as a global provider of essential financial services and products to multi-national companies,' says CIFSA.

According to Eric Crutchley, Director of CIFSA, "The alleged Parmalat fraud appears to have taken place in Italy, just as the Enron fraud occurred in the US, and BCCI in the UK. No regulatory Authority can control how legitimate services are used for illegitimate means if the intent to defraud is present, and we can only empathize with the other well- regulated jurisdictions who have become embroiled in this debacle. As with our colleagues in other regulated markets in Italy, the UK and/or the US, and we see this as an abuse of our financial system. We sympathise with the other jurisdictions, companies and people caught up in this difficult situation and hope that the investigations will bring justice to the many people around the Parmalat empire who have been wronged in this process".

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