PwC To Investigate Offshore Scandal At Grenada's First International Bank

Mandy Robinson, Tax-news.com, London

01 March 2001

Grenada's Prime Minister, Dr Keith Mitchell, has announced plans to bring in global accounting firm, PricewaterhouseCoopers to investigate the problems at the First International Bank of Grenada (FIBG), which brought the offshore institution to its knees.

PwC is expected to conduct an audit of the FIBG in the hope of solving the mystery of the disappearance of millions of clients' dollars and will attempt to reimburse them. Earlier this week Dr Mitchell told a press conference: 'the forensic audit is a major part of accounting ... what we need is really a serious forensic audit of First Bank to find out where the money went. I think that is the crucial point. We need that information. At this point in time I think that is the important issue, to find where these people's assets are.'

It is estimated that around US$150 million has been stolen from over 6,000 (mostly American) depositors.

The government took over operations of the FIBG last year after reports were published accusing ex-managers of diverting millions of dollars to foreign accounts and leaving the country. Consequently the bank nearly collapsed; but the government has since made provisions for the bank's activities to be closely monitored and supervised with a qualified accountant employed to ensure precise records are kept.

Since taking over the FIBG the government has planned to appoint an investigation into the bank. Last October, Finance Minister Anthony Boatswain, said: 'This government intends to pursue vigorously the investigation surrounding the partial collapse of First International Bank. In this regard we intend to recruit the services of international experts to undertake this investigation.'

The government has also been working hard to ensure such a financial scandal can not take place in future by implementing a number of measures to strengthen the offshore sector, such as creating a financial investigative unit in the Police Force, reinforcing the regulatory practices of the Grenada International Financial Services Authority (GIFSA), and introducing anti-money laundering laws.

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