The British Virgin Islands Financial Services Commission has fined Mossack Fonseca & Co (BVI) Limited for US$440,000, the largest amount ever issued by the FSC, for the contravention of the Anti-Money Laundering and Terrorist Financing Code of Practice and BVI Regulatory Code. The arm of the Panama Papers law firm failed to record keeping, risk assessment and adequate updating of customer due diligence.
This followed the investigation into the BVI branch of the firm upon the publication of the Panama Papers in April 2016, including a six month on-site compliance inspection focused on reviewing specific aspects of the company’s anti-money laundering and risk management procedures, and the appointment of a qualified person approved by the Commission to advise on company’s business affairs and to give recommendations on how to bring it into full compliance.
Premier Dr Orlando Smith said in his comments on the actions of BVI FSC: “Today’s enforcement action clearly demonstrates the effectiveness of the territory’s independent regulator, the seriousness with which it tackles any breaches of its code and, through the adjustments made to its risk assessment framework, an ongoing commitment to strengthening its regime to ensure this remains fit for purpose.”
The Scotsman Hotel in Edinburgh, the five-star hotel with 150 staff was placed into liquidation in July 2016, after HM Revenue & Customs filed a winding up order against owners of JJW Hotels.
In the beginning of July, JJW Hotel said that it was in the process of resolving its issues with HM Revenue & Customs, and put the liquidation notice down to an “unfortunate miscommunication”. Appointed liquidators have been running the hotel while the owners tried to bring it back under their ownership.
JJW Hotels & Resorts Ltd is a subsidiary company of the British Virgin Islands-incorporated MBI International Holdings, whose owner is Saudi tycoon Sheikh Mohamed bin Issa al Jaber. By words of his spokesperson, “JJW Hotels and Resorts own and manage The Scotsman Hotel in Edinburgh”…“The estate is made up of three parts: The freehold which is owned by JJW, the hospitality function which is operated by JJW and a leasehold over parts of the hotel which is owned by another party.”
According to the statement of JJW Hotels, its management is in final negotations with the liquidator to exit the process, and with the third party leaseholder to buy him out. Appointed liquidator Eileen Blackburn answered that “The Scotsman Hotel will continue to trade under the liquidator’s supervision…While sustained efforts have been made to reach an agreement to return the company and its trading to the hotel’s owners, this has not yet proved possible.”
Polo Resources Limited, the natural resources investment company based in the British Virgin Islands, announced that its 33.2 per cent investee company Celamin Holdings NL issued an update concerning the resolution of the dispute between its wholly owned subsidiary Celamin Limited and its joint venture partner Tunisian Mining Services. The arbitrated dispute relates to the fraudulent transfer to TMS of Celamin’s 51% shareholding in Chaketma Phosphates SA.
The arbitrator considered the jurisdictional challenges raised by TMS and confirmed Celamin’s position regarding jurisdiction of the arbitrator and the International Chamber of Commerce. The Chaketma Phosphate Project is a world class asset and Celamin believes it can manage it and ensure it proceeds to development.
Following the announcement of the troubled oil and gas company Xcite Energy Limited on discussing the deal after which creditors would take under control 98.5% of its share capital, the principal shareholders moved to company’s liquidation. Being not satisfied with the transaction that would have significantly diluted their interests, the shareholders instructed the bond trustee to petition the court in the British Virgin Islands, where Xcite is domiciled, within the next 10 days to request the appointment of a liquidator to the company. The appointment of the liquidator will take effect 4 to 6 weeks from the filling of such request.
As it is expected that the liquidation is unlikely to result in the return of any value to the existing shareholders of the BVI company, its ordinary shares have been suspended on the Alternative Investment Market (AIM).
Xcite Energy Resources Plc will not be subject to enforcement action, and will remain a going concern throughout the process.
Finance Minister of Pakistan has requested the Federal Board of Revenue (FBR) to seek information in the Panama and Bahamas leaks. Pakistan will ask for information from the tax authorities of nine jurisdictions, including British Virgin Islands, the Bahamas, Jersey, Panama, Seychelles, and some others. The requested data will be mainly related to the banks accounts, business assets and investments of Pakistani nationals and companies mentioned in the leaked documents.
The Chairman of the FBR has informed Pakistan’s Finance Minister that the notices have already been issued to the persons and companies named in the documents.
The British Virgin Islands Financial Services Commission has published an Advisory Warning concerning the entity named IFX Investment House Ltd., offering online trading and other forex related products and services through the website located at www.tradecoveries.com. The company falsely presented itself as being registered and regulated in the British Virgin Islands.
In the press release, the Commission confirmed that IFX Investment House Ltd. has never been incorporated as a business company in the jurisdiction, and has never been licensed to continue financials services business in or from within the BVI.
For BVI-registered Sable Mining Africa Limited, trading on AIM London Stock Exchange for ordinary shares of no par value has been temporarily suspended from September 14, pursuant to AIM Rule 1. The company announced that some factors including political instability, depressed bulk commodities market, as well as unsubstantiated allegations and press speculations have caused harm to its long-term prospects in mineral exploration and development.The main factors to seek the cancellation include the considerable cost, management time and legal and regulatory burden associated with maintaining company’s admission to trading on AIM; also, continuing admission to AIM trading do not sufficiently provide the company with the benefits associated with public listings including access to capital.
Sable Mining is planning to seek shareholders’ approval to cancel admission of its ordinary shares to AIM trading from 17 October 2016, as according to the AIM rules, the cancellation must be approved by not less than 75% of shareholders’ votes. Upon the cancellation, the BVI
company will consider putting in place a Matched Bargain Facility to assist shareholders to trade in the Ordinary shares.
As a result of the cancellation and changes in the company strategy, the current director of the company Jim Cochrane has stepped down from the Board of Directors with immediate effect.
During the course of an operation against foreign criminal organizations involved in money laundering, eleven people were arrested by the police of Spain in Barcelona. These people, mostly Russians and Ukrainians, allegedly channeled money from the British Virgin Islands and Cyprus, through a network of offshore companies, and purchased real estate in Spain. Through this scheme, the arrested group laundered about 10 million Euros.
There was a similar operation held on June 28 when eight people were arrested, and police seized property worth about 62 million Euros.
Close relative of ex-Punjab chief minister was asked to appear before the Enforcement Directorate and bring personal financial documents, in connection with probe against him for alleged forex contraventions and failure to pay taxes for foreign assets. He should explain the alleged movement of funds to Switzerland, and creating a trust and subsidiary companies in the British Virgin Islands.
Previously, this case had been investigated by the Income Tax Department, and there was a court hearing in Punjab. The next hearing of the case will take place on July 26. The case was initiated when the Income Tax Department got information about him allegedly holding offshore account in Switzerland. An investigation was started, gathering necessary documents from a competent court in Punjab and RBI, suspecting “contravention of the Foreign Exchange Management Act (FEMA)”.
An Advisory Warning published by the BVI FSC on 6 July, 2016, informs the public of the entity known as FXGlory Ltd., which has been offering online investment products and trading in other forex related products and services, and presenting itself as being incorporated and regulated in the British Virgin Islands. The company offers its services through the website www.fxglory.com, where it is falsely claimed to be located in the BVI.
However, the Financial Services Commission confirms that FXGlory Ltd. has never been incorporated as a business company in the British Virgin Islands, as well as has never been licensed to provide financial services in or from the jurisdiction. It is advised that members of the public should be extremely cautious if conducting any business with FXGlory Ltd.