[This] “amendment is the most ill drafted and ill conceived one that I have seen in over forty years” says prominent Cayman accountant, “Should this amendment come to pass the islands Financial Industry will collapse over night.”

Georgina Wilcox

In an email sent on behalf of Paul Harris, President of Cayman Islands Company Managers Association (CICMA), he warns of various amendments to a number of financial laws.

He attached the industry advisory from Government (see below) and particularly brought to his members attention in the amendment to Section 59(1) of the Cayman Islands Companies Law.

“Cayman companies must now keep AT THEIR REGISTERED OFFICE proper books and records together with underlying documentation including contracts and invoices relating to all money received and paid, all sales and purchases and all assets and liabilities.”

We have a word in the UK that sums up my first reaction to this provision:

Blimey!

Tomorrow we will be doing a full Editorial piece with reactions from some of our leading financial commentators after they have had a more detailed look at the amendment.

Initial reactions from persons we have spoken to is one of shock and a former leading banker and now a financial advisor who did not wish to be named said:

“My initial reaction is that if the stipulation is as set out, this is not at all practical.  A company’s registered office may be with a large firm but that firm does not have time to look at every transaction.

Chris Johnson, managing partner of Chris Johnson Associates, and a man not afraid to speak out said,” In my opinion these amendments to the various laws have been cobbled together by persons who have no idea as to the ramifications of what they have done.

“For example all companies must now maintain their books of account at the Registered Office of the company in the Cayman Islands. The section does not even say copies of books of account. So imagine over 80,000 companies now keeping their books of account in Cayman. To take it to its fullest extent to maintain those records you need tens of thousands of bookkeepers, accountants, computer specialists etc. and each year the overseas auditors descend upon Cayman, which is so much required to boost our lackluster economy.

“Whilst all of this would bring extraordinary benefits to the accounting industry, the Real Estate Industry and Tourism, it will not happen for obvious reasons.

“This proposed amendment is the most ill drafted and ill-conceived one that I have seen in over forty years. Already our competitors are in the know which does not add to our reputation following the payroll tax fiasco. Had the Minister of Finance asked the assistance of the Financial Community, which he would surely have received, he would have saved himself and the country considerable embarrassment.

“Should this amendment come to pass the islands Financial Industry will collapse over night.”

We must point out that this is NOT law yet and there are ongoing discussions going on with Government.