On July 15, 2008, a BVI-registered company Qiao Xing Universal Telephone, Inc. announced that on the July 11 US District Judge Denise L. Cote gave the final approval of the settlement of the class action against Qiao Xing Universal Telephone and its directors and officers. Also, on July 11, 2008, the Final Approval Order and Judgment were signed and came into force.
The settlement amount was USD 2,400,000. The insurance carrier of the company’s directors and officers contributed USD 300,000 towards the settlement. Qiao Xing Universal Telephone, which is one of the largest manufacturers and distributors of telecommunications products in China, has accrued a USD 2,100,000 non-operating loss in its 2007 consolidated financial statements that is related with the settlement. However, this loss did not influence the consolidated results of the British Virgin Islands company for the year ended December 31, 2007.
According to the Chairman of the company, Mr. Wu Rui Lin, Qiao Xing Universal Telephone is satisfied that the class action was promptly settled.
According to a Senate Report issued to pierce the secrecy surrounding offshore bank accounts, the big Swiss bank UBS and Liechtenstein Global Trust (LGT), which is run by the royal family of Liechtenstein, might help wealthy individuals avoid paying taxes in the United States.
The report consists of 115 pages and describes the way 8 persons used offshore accounts in order to evade taxes. These individuals include Harvey Greenfield, the owner of the Commonwealth Toy and Novelty Company, which sells Beverly Hills Pups; Frank Lowy, the Australian billionaire who runs the Westfield Group; and the world’s largest owner of shopping centers; Richard M. Chong, a venture capitalist.
The report says that that Prince Phillipp of Liechtenstein courted clients for LGT. In March 2001, he met with members of the Greenfield family in Vaduz, the capital of Liechtenstein, in order to persuade them to move a USD 30 million offshore trust held at another bank to LGT. By 2001 LGT had established a Liechtenstein foundation for the Greenfields that used two companies incorporated in the British Virgin Islands corporations with a view to transfer at least USD 2.2 million.
Also, the report issued by the Senate details the marketing efforts made by UBS in order to win new clients in the US. It is worth noting that UBS is cooperating with authorities in the investigation and does not comment the situation.
Like its German competitor Siemens, a French company Alstom Group is has purpotedly used a bribery system in order to buy contracts worldwide. However, politicians and the media in France have shielded the company.
In 1998, long before the corruption scandal with German electronics and engineering giant Siemens, the fax from a bank in Liechtenstein was sent to a Liechtenstein foundation Oehri Treuhand and its head Gerry Oehri. The letter from the bank asked for an explanation from Oehri as regards a few things on one of his discreet companies. It should be noted that Crofthill Consulting, a company managed by Oehri, had an account with the bank, but its mailbox and registered address was located on the British Virgin Islands. So, when the bank receives an incoming wire transfer for USD 4 million from an unknown source unknown, it gets suspicious of money laundering.
Auditors from the accounting and consulting firm KPMG, hired by the Swiss Federal Banking Commission, concluded that “the Swiss investigative authorities strongly suspect that senior officials at the Alstom Group systematically embezzled money for years and horded it in so-called ‘black funds’.”
The investigation into the case continues.
Almost a year ago, BVI Offshore Business: Grey Area discussed a bribery scandal with Siemens. It is peculiar that in its bribery scheme Siemens also used a BVI offshore company. The same as with the case with Siemens, the active role is played by Swiss offshore services and banking system as well as KPMG that has participated in the investigation of both bribery cases – German Siemens bribery scandal and French competitor’s Alstom bribery scandal.
On June 24, 2008 Norwegian telecommunications company Telenor applied to the U.S. federal court, asking to halt lawsuit brought against it in Russia by British Virgin Islands-registered Farimex Products – a fellow shareholder in Russian mobile operator Vimpelcom.
According to Reuters report, the BVI company filed the lawsuit worth $3.8 billion in a Siberian court, claiming Telenor prevented Vimpelcom from purchasing Ukrainian mobile group Kyivstar, and delayed Vimpelcom’s purchase of Ukrainian Radiio Systems.
Telenor called these claims groundless, and asked the US Federal District Court of New York to block it.
It is known that Farimex is controlled by Russia’s Alfa Group, which is currently involved in another large-scale lawsuit, being one of the shareholders of BVI-controlled joint venture TNK-BP Ltd.: four co-owners of TNK-BP are filing legal actions with the purpose to deprive BP-nominated directors of their powers.