Archive for July, 2009
$95 million superyacht
(CNN): A spectacular superyacht has been designed by an internationally renowned urban planning architect in a very unusual shape. 76-meter long "Oculus," which is designed for 12 guests, looks like a large sea creature, with one end looking uncannily like the jaw and eye socket of a shark or a killer whale. A second design, the futuristic, 91-meter "Infinitas," is based on the figure-of-eight shape of an infinity loop. With a starting price of $95 million for Oculus and $140 million for Infinitas, they don’t come cheap.
Cost cutting ideas begin to surface
(CNS): Civil servants are already responding well to the Chief Secretary’s request to look for cost savings according to Director of the Budget & Management Unit Ronnie Dunn, who said that public sector workers are coming forward with a number of good ideas. While it will be policy changes that will ultimately address the larger part of the deficit, he said a lot of the cost cutting ideas regarding utilities and day to day savings from civil servants themselves could collectively make a significant difference.
Dunn said that things like printing on both sides of the paper, turning the A/C up a notch, not drivinggovernment vehicles after hours or weekends, cutting overtime hours to reasonable levels all will, when taken together across 120 government departments, make a difference.
“Several small drops into a bucket can still fill it,” he said. “When we have electricity costs that run into the millions for the year, we can probably save ten percent by powering down computers every evening and turning down the A/C.”
He said the goal is to calculate possible savings for each department and then collate them into a budget reduction for each one, rather than just issuing a general instruction to cut down on paper. Each department will assess how much it can actually save by cutting down on paper or phone use for example or any other general expenses and covert that into a percentage saving for each department.
Dunn explained that currently all of the ideas are being examined and there are some very interesting suggestions on the table which are now being discussed with ministers. He noted that the really significant savings would have to be made at policy level and in some cases savings may only be made by spending more. He gave an example of employing more customs officers to help detect more of the duty fraud that currently passes through the system, which would in turn bring in more revenue.
He also said that the Budget & Management Unit had been looking closely at other jurisdictions, given that most countries are facing similar circumstances, and that assessing what measures have succeeded elsewhere could also help identify solutions that could work here. Dunn also noted that the idea of issuing government savings bonds was also being considered.
“The important thing is that we save jobs and try not to cut salaries as both would ultimately come back on government,” he said. Dunn explained that if people were out of work then they would still turn to government for help through social services and that if salaries were cut there would be less money circulating in the economy and ultimately less revenue to the treasury.
He said that so far the public servants had responded favourably to the request made by the chief secretary and it was apparent people wanted to do what they could to address the situation.
The letter was circulated by Donavan Ebanks to the 3,000 or so civil servants last week asking them to think about how they can cut costs in their departments and to suggest ideas to either their heads of department, Gloria McField-Nixon, the chief officer for the civil service or to Dunn.
Ebanks said that these were the most challenging times he had seen in his 34 years of public service. “The issues which the Cayman Islands face will not be solved by `them’ — they can only be solved by `us’,” he told public sector workers.
Woman wins right-to-die fight
(BBC): A woman with multiple sclerosis has made legal history by winning her battle to have the law on assisted suicide clarified. Debbie Purdy wanted to know if her husband would be prosecuted if he helped her end her life in Switzerland. Five Law Lords ruled the Director of Public Prosecutions must specify when a person might face prosecution. Ms Purdy, 46, from Bradford, said she was "ecstatic" at the ruling and she had been given her life back. The Director of Public Prosecutions Keir Starmer said he would publish an interim policy on when prosecutions could occur by September before putting the issue out to public consultation. Permanent policy will be published next spring.
Cops warn parents to supervise kids
(CNS): Parents and guardians who are not properly supervising their children may find themselves in trouble with the law if the kids get up to no good. Police are asking parents to know what their children are doing and where they are during the summer holidays following complaints that children are being seen out and about late at night and unsupervised. The Royal Cayman Islands Police Service (RCIPS) Family Support Unit (FSU) saidparents should take an active and genuine interest in their children’s activities.
“We have concerns about what children might get up to if they are left unsupervised during this summer period,” said Inspector Claudia Brady, Head of the FSU. “If left to their own devices young people could find themselves looking for ways to entertain themselves, causing a nuisance to others and breaking the law, or they could end up in vulnerable or dangerous situations.”
Police warned that if their child is causing a nuisance in the community or committing criminal acts, they could be held responsible for the actions of their child. Inspector Brady also stressed that aside from the chances of young people getting involved in criminal activity, there is also a very real concern that young people could get mixed up in adult relationships. Inspector Brady warns that it can be hard for parents and guardians to know when their child is getting involved with a boyfriend or older man.
“It could be that your child is involved with someone who is considered to be a family friend or someone they know to trust,” she said. “What is important is that parents play an active role in their child’s life. Parents and guardians should know who their child is spending time with, where they are going, what activities they are getting up to and how they spend their time while away from school.”
The RCIPS encourages parents and guardians to speak with their children, ask them questions about their friends and take a real interest in what is happening in their lives. “It is your responsibility to protect and care for your child. If you have any concerns about what they are doing or who they are doing it with, seek help. We are here to offer advice and we welcome the opportunity to assist parents, guardians and families,” said Inspector Brady.
The FSU provides inter-agency liaison in areas of domestic violence, child protection and victim support. Police said that the detectives assigned to the unit have received specialist training in the investigation of child neglect, sexual and physical abuse and vulnerable adults who are victims or witnesses. They are also trained to deal with domestic violence complaints. All officers have considerable experience and knowledge in dealing with issues affecting the family and deal with each case in a caring and confidential manner.
Rich Americans come clean about offshore accounts
(Bloomberg) — Hundreds of wealthy Americans are revealing they have offshore bank accounts as the US and Swiss bank UBS negotiate to resolve a lawsuit seeking the identities of 52,000 Americans suspected of tax evasion. The Internal Revenue Service received about 400 applications last week for a temporary program that waives some penalties related to hiding assets in undeclared accounts. “We’ve been seeing an increasing amount of interest in the voluntary disclosure programme,” said IRS spokesman Terry Lemons said.
Police seek witnesses as boats cut from moorings
(CNS): The joint Customs, Immigration and Police Marine Unit has begun an investigation after three local fishing boats were cut free from their moorings overnight. Officers were alerted to the missing boats at 6.05 am this morning (Thursday, 30 July). Police reported that he boats had been tied to their permanent moorings in the George Town harbour yesterday and had last been seen there at midnight. All three were however recovered today in separate locations.
A search was carried out and the owner of the boats located two of the vessels drifting between three quarters of a mile and half a mile from the Esso tank. The third boat however, was found beached near the North West Point launching ramp in West Bay. The two which were drifting were not damaged but the one found in West Bay sustained some minor damage, police said.
Officers from the Marine Unit are conducting enquiries and would like to hear from anyone who witnessed any suspicious activity in the harbour between the hours of midnight and 6am. Anyone who can assist should contact the Marine Unit on 949-7710 or Crime Stoppers on 800-8477 (TIPS). All persons calling Crime Stoppers remain anonymous, and are eligible for a reward of up to $1000, should their information lead to an arrest or recovery of property/drugs.
Butterfield’s mixed results
(CNS): According to a release from Butterfield, the bank is reporting mixed results for its second quarter 2009. Compared to the group’s overall losses of $16.5 million in Q2 2008, it reports a net income of $10.3million for Q2 2009. Butterfield Bank (Cayman) Limited, a wholly-owned subsidiary of The Bank, recorded a net income, before group service charges of $3.4 million, down $4.6 million from the $8.0 million achieved a year ago, partially reflecting the sale of the Fund Services business in September 2008 the bank said.
The current situation for the group as a whole brings both basic and diluted earnings per share to $0.11 in Q2 2009 compared to negative $0.18 and negative $0.17 respectively in Q2 2008. Butterfield said its Board of Directors has approved a second quarter dividend of $0.08 per share, comprised of $0.04 in cash and $0.04 in common shares, payable on 24 August 2009 to shareholders of record on 7 August 2009. Both the amount and composition of the dividend are unchanged from the prior quarter.
Alan Thompson, President & Chief Executive Officer said it was pleasing to report that Butterfield made a profit in the current economic climate, given the ongoing recession in many of the jurisdictions in which it operates as well as the impact of interest rates. “It is also pleasing to report that the difference between book value and market value in the Bank’s held to maturity portfolio continued to improve in the quarter by $52 million. In June, we successfully completed the issuance of US$200 million of preference shares, with the vast majority of investors coming from Bermuda. As a result our balance sheet and capital positions have been significantly strengthened. Despite the challenging economic conditions we have confidence that, when market conditions improve, we will be well positioned to generate attractive returns for our shareholders,” he added.
Richard Ferrett, Executive Vice President & Chief Financial Officer said the group’s capital ratios are now the strongest they have been for some considerable time. He explained that the successful preference share raise, with a Tier 1 capital ratio as at 30 June of 11.0%, up from 7.7% at end March 2009 had helped.
“There were no write-downs of investment securities and a net realised gain of $1.9 million was achieved in the quarter, primarily reflecting the sale of a previously impaired security. The quarter also saw a significant year on year decrease of 14.9% in the Bank’s operating expense base, reflecting our focus on achieving operating efficiencies. Also noteworthy was a $1.2 billion increase in assets under administration, reflecting growth across our trust and custody business lines, the second successive quarter in which our AUAs have risen,” Ferrett added.
Meanwhile in Cayman net interest income before credit provisions was down $2.7 million (24.1%) reflecting the low interest rate environment. Total assets now stand at $2.5 billion compared to $3.3 billion at 2008 year-end, reflecting lower level of short-term deposits from hedge fund clients. Assets under administration, at $4.5 billion, were down $0.9 billion from the position at year end 2008, whilst assets under management remained unchanged at $1.3 billion.
Conor O’Dea, Managing Director, Butterfield Bank (Cayman) Limited, said however he though the Q2 results were encouraging considering current market conditions. “Our business remains strong as evidenced by a year-on-year loan growth of51%. We continue to maintain strong stand-alone capital ratios and our balance sheet remains conservative by industry standards. These results are totally due to our loyal customers and our committed team, locally and globally, who continue to help us achieve positive outcomes in a challenging environment,” O’Dea added.
Appleby bucks trend
(CNS): As firms all over the world cut jobs and down size, Appleby is bucking the trend as it takes on new staff and expands operations. Following the completion on 1 October of its merger with Isle of Man law firm, Dickinson Cruickshank, and the opening of offices in the Seychelles and Bahrain, the Cayman-based entity will become the world’s largest offshore law firm by number of partners. The firm has also announced the appointed Gray Smith (left), a senior international funds lawyer, as a new partner.
He is currently advising fund clients on redemptions, liquidations, takeovers, restructuring and refinancing as well as numerous litigation-related issues.
Prior to joining Appleby, he was London managing partner at Ogier and then General Counsel at a London-based asset management company. Smith is qualified to practice law in the Cayman Islands, the British Virgin Islands, Hong Kong and England and Wales. He will be dividing his time between Cayman and London and will be advising clients on both Cayman and BVI structures. Smith said that joining the firm was a good move for him and is clients
“Appleby’s global resources and broad choice of jurisdictions was compelling for me and is ideal for my client base,” said Smith. “The firm’s leading offshore position combined with their strength and depth across multiple jurisdictions was the deciding factor.”
Huw Moses, Managing Partner of the Cayman Islands office, said he was delighted Smith had chosen to join the firm. “His appointment will provide our corporate, institutional and private clients with greater resources across the locations and time zones in which they do business and a broader choice of structures and jurisdictions. With his background and knowledge, Gray is ideally suited to assist us to further expand in this key area,” he added.
Overall, when the merger is complete the firm will have 74 partners and 200 lawyers, and a total of over 800 staff in 11 offices worldwide, including Bermuda, Bahrain, the British Virgin Islands, the Cayman Islands, Jersey, Mauritius, Hong Kong, London, Seychelles, Zurich and the Isle of Man. The Funds team consists of 40 lawyers globally, and the Cayman capability has recently been strengthened by the addition of associate Tanya Kozak, who moved from the firm’s Bermuda office, and the appointment of associate Jessica Wormald.
US government discovers paper has two sides
(Wall Street Journal): With the budget deficit soaring toward $2 trillion, the Department of Justice has figured out how to play its part: double-sided photocopying… The Justice Department estimates it can save $573,000 through fiscal 2010 by setting up its printers and copiers to use both sides of the paper. By emailing some documents instead of printing them out, the Department of Homeland Security will save $318,000. Both Homeland Security and the National Highway Traffic Safety Administration have pledged to take the same step that has sent the newspaper industry into a tailspin: They will start getting their news online free, rather than renew their subscriptions.
UK bosses defend tax-havens
(CNS): Low-tax jurisdictions and tax havens play an important part in the global economy, says the UK Institute of Directors (IOD), which has warned the UK government that attacking such jurisdictions may not be particularly productive. Richard Baron, Head of Taxation at the Institute, said while there were some problem jurisdictions many of them oil the wheels of commerce and nations have a right to choose their own level of taxation. The IOD has argued that national sovereignty must be accepted.
“A state is perfectly entitled to set very low tax rates if it wants, although other states are equally entitled to respond with legislation that would eliminate tax savings for their own residents,” the institute, which has a membership of well over 50,000 directors and company chiefs, stated.
The Institute of Directors noted that the obvious response may be for co-operation between higher-tax states, and while some co-operation can be beneficial, some would damage the economy because it would amount toa cartel between states. “Even co-operation that merely lessens the pressure to reduce administrative burdens can be damaging,” the IOS stated.
Baron went on to explain that the places described as tax havens highlight the problems of high taxation rather than low. “Low-tax jurisdictions are also a constant reminder to us that tax burdens do not have to be high. The most constructive response to them would be to chart a gently downward course for tax rates, thereby promoting economic growth,” he said.
“There are some bad jurisdictions, which facilitate tax evasion or worse crimes. But we must also recognise that low-tax jurisdictions can oil the wheels of commerce. It isperfectly reasonable for other states to act to protect their tax revenues, but they must be careful not to throw grit into the mechanism. “
Baron said the criticism by G20 nations at the London summit in April and the renewed push to eliminate low-tax offshore financial centres “may not be the most productive” choices.