Both government and Cayman Finance have rejected ABC News reports that the Cayman Islands was culpable of sheltering investments by US presidential candidate Mitt Romney.

The report accused the leader of the three-man Republican field of hiding a series of multi-million-dollar investments in the Cayman Islands, seeking to avoid taxation.

On Wednesday ABC reporter Brian Ross accused Romney of hiding “millions of dollars of his personal wealth” in the Cayman Islands, ”one of the world’s great tax havens, where secrecy is the rule”, saying he was “using tax loopholes available only to the super rich”.

Jack Blum, advertised on the broadcast as an “international tax attorney”, told ABC “if you have a Cayman corporation, you don’t pay any tax to the Cayman government, and the Cayman Islands don’t report the income that is made to the US government.”

Mr Ross said ABC had found 12 separate funds listed in Cayman under Mr Romney’s Bain Capital, holding as much as $30 million. Bain, he said, had set up 138 “secret corporations”.

In an interview with “Bain’s registered agents”, Walkers Global Finance, David Byrne, chief marketing office, declined to discuss the issue.

Companies set up Cayman accounts to attract foreign investors to US companies, enabling them to avoid US taxes, Mr Ross tells the camera, “that’s great for Bain and for the foreign investors, but not so great for the US Treasury and American taxpayers.”

Finally, he accuses Mr Romney of dodging questions as to why he has investments in the Cayman Island, reporting the candidate saying said he is “taxed no differently than in the US”.

Yesterday, Cayman Finance Chairman Richard Coles rejected the ABC report: “The report displays a total misunderstanding of the role of the Cayman Islands’ tax-neutral framework. All international investors are ultimately responsible for paying their taxes in their home country under their respective laws and there is nothing in the Cayman Islands laws that interferes with that.

“We do understand that this is election season in the US and typically these types of reports surface as part of that process, but it is unfortunate that despite significant evidence to the contrary, journalists would continue to suggest that the laws of the Cayman Islands encourage avoidance of tax,” Mr Coles said.

Government’s Financial Services Secretariat commented similarly: “Contrary to the ABC News report, the Cayman Islands is not a secrecy jurisdiction that facilitates the avoidance or evasion of taxes by US or other persons.

“Although the Cayman Islands does not itself impose income taxes, it shares financial and other confidential information with the IRS and other US federal agencies through various agreements with the US government. That includes information requested for purposes of enforcing US income tax laws,” it said.

“However, as in the US, private information is generally protected from public disclosure because such disclosure is not for law-enforcement purposes and the information could be used for improper or harmful purposes.

“The registration of companies in the Cayman Islands and arrangements for receipt of mail at their registered addresses are essentially the same as arrangements for companies registered in Delaware and elsewhere in the US.”

Finally, it said, pointing to the report itself, “despite the unfounded allegations of improper secrecy made in its report, ABC News was able to verify the existence of various investment funds through documents, which are publicly available from the government of the Cayman Islands.”