BVI FSC Appointed Liquidator to Whitten Trust

In December 2010, the Financial Services Commission issued public statement informing that, upon its application, the Eastern Caribbean Supreme Court, High Court of Justice of the Virgin Islands appointed the official receiver as liquidator for Whitten Trust Company Limited. Whitten Trust was licensed to carry on trust business in February 1999, being the holder of the Class I trust licence and one of companies of Whitten Capital Group.

The BVI FSC took enforcement action against the trust in September, 2008. In January, 2009, the Commission issued public announcement to inform on the appointment of Joint Administrators for Whitten Trust.

The application of the FSC to appoint a liquidator to a trust which is subject to ongoing enforcement action is in the public interest. Whitten Trust had contravened various provisions of financial services legislation, failed to appoint a board of directors of suitable management team, could not satisfy the prescribed capital requirements and achieve the required level of solvency. All this is enough for Commission to decide that the company did not satisfy the criteria of Class I trust licence holder.

Dispute in the House of Assembly - the Delay of Stamp Duty Avoidance Inquiry

This week, there is one year that passed from the moment when Governor David Pearey announced the establishment of the institution of a commission of inquiry, for purposes of investigation of the cases of apparent stamp duty avoidance. However, the commission has not been named until now, and last week Julian Fraser, minister of communications and works, accused the BVI Governor Pearey of “finding all excuses” to avoid it.

Speaking at the session of the House of Assembly, Julian Fraser said that when the public accounts committee asked the governor to launch the investigation, he refused to do it, having found many excuses. Also, according to Mr. Fraser, the governor does not focus on everyone who has avoided paying the stamp duty, instead of this directing the investigation at a select group.

In a report on the deliberations of the Standing Finance Committee 2008, Mr. Fraser said that “approval would not be given by the SFC committee for the $100,000 requested for the commission of inquiry on the collection of stamp duty, as the information brought forward was not explicit enough.”

For the first time the commission establishment was recommended in March 2006, in the report made by the Public Accounts Committee. According to the March statement by Governor Pearey, after a 14-month investigation by the attorney general and the director of public prosecutions into the transactions highlighted in the report, these “were found to have given rise to an underpayment of stamp duty in excess of $500,000”. By his words, full payment of these sums is being secured, but evidence showed that this practice had been continuing over many years. The commission would examine evidence of underpayment starting from 2000.

In last week interviews, Governor Pearey said he had examined the issue carefully before making a decision on the necessity of the commission of inquiry. Gov. Pearey said the “financing aspect” of the inquiry was not part of the delay, and the investigation is moving forward. He noted that the key need is to find a suitable commissioner.

BVI Governor Establishes the Commission to Probe Stamp Duty Evasion

On May 16, 2007, the institution of a commission of inquiry was announced by BVI Governor David Pearey. The commission is to be established after the election, and will investigate the cases the apparent undervaluing of property for the purpose of avoiding stamp duty.

David Pearey commented that the decision on the establishment of the Commission has arisen out of the recommendation in favour of an inquiry in March 2006 Public Accounts Committee report. He said: “In the intervening 14 months there has been a full investigation by the Attorney General and the Director of Public of Public Prosecution into the transactions highlighted in the report ...These transactions were found to have given rise to an underpayment of stamp duty in excess of $500,000. Full payment of these sums is being secured, but evidence points to the likelihood that this practice has been continuing over many years.”

After the elections, the commission will examine the evidence of underpayment over a period starting from the year 2000, and other related matters. According to the BVI Constitution, the elections are due in June 2007, but must be held before October 10. The Governor said that the post-election timing for the inquiry is to ensure that it can make judgements away from the political limelight.

Chief Minister Dr. D. Orlando Smith and the Leader of the Opposition Ralph T. O'Neal have also been informed of the decision to issue an inquiry into the matter.