Archive for January 11th, 2011
Cayman gains US telecoms company from Delaware
(Bloomberg): Telecommunications company UTStarcom Inc. said Monday it plans to change its place of incorporation from Delaware to the Cayman Islands as part of a reorganization.Many companies incorporate in offshore financial centers in the Caribbean and elsewhere, drawn by low tax rates and banking rules and legal systems that make it easy to move capital around the globe. UTStarcom is merging with a newly formed unit to become a subsidiary of a Cayman Islands holding company, UTStarcom Cayman.
If shareholders approve the deal, their UTStarcom shares will convert into shares of UTStarcom Cayman, which will be listed on Nasdaq. The company’s business operations won’t change.
UTStarcom Cayman will be taxed as a United States corporation. It expects to qualify as a foreign private issuer for purposes of its reporting obligations to the Securities and Exchange Commission, which the company expects will lower its compliance costs.
US leading health insurer in deal with special CI firm
(Bloomberg): Insurer Aetna Inc. has entered into a three-year reinsurance agreement with Vitality Re Limited, a newly formed special purpose insurance company based in the Cayman Islands. Aetna said the deal is part of its long-term capital management strategy. It allows Aetna to reduce its required capital and provides $150 million of collateralized excess of loss reinsurance coverage on a portion of Aetna’s group commercial health insurance business. The first of their kind insurance linked notes were offered in a private offering associated with the deal between Aetna and Vitality Re.
Cayman college generates six new ‘Masters’
(CNS): There were plenty of family and friends on hand to congratulate the 24 students who were celebrating their graduations from degree courses at the International College of the Cayman Islands recently. At this year’s graduation four individuals walked away with their Master’s in Business Administration a valuable tool for today’s job market and another two post graduate students also earned Master’s degrees in the fields of HR and Education. The remaining 18 graduates were celebrating their bachelor’s degrees in a variety of arts and science based subjects.
For many of the students the achievement was even more hard fought as they gained their degrees while juggling full-time jobs and families with their studies and attending evening classes. In his key note speech Cayman National Bank President Ormond Williams challenged the graduating class that their education should not stop when they received their degrees.
“Today, you are not only competing against your fellow student, but also against a student in India, China or some other part of the world who need not move from their home country to seize an opportunity right here,” he said. “While you are encouraged to think locally, you are destined to barely achieve your full potential and to grasp the opportunities that abound unless you also think globally. Be a productive and creative citizen of the world.”
Representing many of the graduates student speaker, Roshenara Khan, talked about the challenges of going to school, working full-time and being a single parent of a young child, but in the end, getting an education was well worth it. She also encouraged her fellow graduates to continue to find ways to continue their education.
“Don’t let this be your last hooray,” said Khan echoing the sentiments of Willians. “If you decide to never step foot onto a campus again, let your journey continue elsewhere. Find your passion. Explore the world, whether you do so through books, the Internet, travel, even sitting listening to grandmother’s tales, continue to learn.”
The class of 2010 coincided with the schools 40th anniversary and college president, Dr John Cummings, said that made the graduation ceremony particularly special.
“This is our 38th graduation ceremony. For our graduates, these degrees mean better job opportunities, but for our college, it is another milestone for quality higher education on this island,” he added.
The evening also saw 29 students begin the first step on the path to academia by having completed an associate degree course.
Cadet corps wants you as a new recruit
(CNS): The Cayman Islands Cadet Corps said on Monday that it is now recruiting cadets for its January 2011 intake and young people who want to take part have until the end of the month to sign up. The programme is open to all school children aged between 11 and 18 – girls as well as boys. Anyone interested in joining must apply by Monday, 31 January. The Cayman Island Cadet Corps is a National Voluntary Youth organisation sponsored by the governor. It provides challenging military style, adventurous and community activities and officials say that will it encourages cadets to follow the career path they desire, and that training in the Corps will be an asset to those considering a career in the Police, Fire and Prison services or the Immigration Department.
For more information and to get an application form, contact the Cadet Corps at the following numbers: in Grand Cayman at 946-9810 and in Cayman Brac at 948-8824. You can also email cicadet@candw.ky or visit the website at www.cicadetcorps.com.
Armed men strike at Gino’s
(CNS): The second armed robbery of 2011and the first of the year involving firearms took place at around 10pm on Monday evening when police say two masked men armed with hand guns held up Gino’s Pizza Parlor on the West Bay Road. George Town detectives have now launched an investigation following the incident in which they say no shots were fired and no one was hurt. The men had threatened staff and a number of customers however, before making off with a sum of cash from the register. Thearmed robbers reportedly escaped in the direction of the Lone Star bar. (Photo Dennie Warren Jr)
The suspects, who had their faces covered, are described as both being around 6’ in height, wearing baseball caps, dark coloured tops and jeans. Detective Constable Karen McQuade, of George Town CID is appealing for anyone who was in the area at the relevant time last night and witnessed the robbery or the suspects fleeing the scene to come forward.
Anyone with information should call George Town police station on 949-4222 or the confidential
Crime Stoppers number 800-8477 (TIPS).
PAC chair queries failure to change PMFL
(CNS): The chair of the Public Accounts Committee has questioned why government has not been able to find time to make temporary amendments to the Public Management and Finance Law that will enable the various ministries and portfolios to get their accounts up to date. Officially tabling a recent damning report by the auditor general in the Legislative Assembly, Ezzard Miller pointed to the AG’s call for government to formerly suspend quarterly reporting requirements and the need to report on outputs until the public finances were up to date. Miller reminded members that it had been agreed with the financial secretary in June 2009 that certain elements of the PMFL would be suspended but nothing had happened. (Photo Dennie WarrenJr)
“It is difficult for me as chair of the Public Accounts Committee to comprehend how government can find the time for all of the legislation that is before us today but cannot find time to amend two clauses to temporarily suspend outputs and quarterly reports in the PMFL so we can finish these accounts,” the North Side MLA said in the Assembly on Monday morning. “I ask government again to make these minor changes so we can address this backlog.”
The PAC chair called on the public and his legislative colleagues to read the report of Auditor General Alastair Swarbrick as he said it was essential that people recognized the importance of having timely and effecting accounts of how public money is being spent.
Miller highlighted Swarbrick’s comments in the report about the lack of leadership with regard to addressing the continued government accountability problem.
“It is particularly concerning to me … that nine years after the PMFL was enacted there are still questions about the leadership,” he said, adding that it was clear that the relevant authorities were not holding those responsible to account.
He told his legislative colleagues that he had asked the Attorney General’s Office for its advice in October and the responsibility of CFOs who had broken the PMFL in relation to holding them accountable legally but he said he was still waiting for a response. Miller recalled that COs and CFOs had all given undertakings to have their accounts in order by September of last year and that they would all meet this year’s deadline but many had failed to meet that commitment and obligation. He also asked why the dozens of missing annual reports, which are believed to be sitting in ministries waiting for government sign off, had not been brought to the LA so that they could become public documents.
Lamenting the AG’s findings in the report, which was made public before Christmas, Miller said it was very serious and the fact that the government’s auditor was having to issue so many disclaimers indicating the accounting for public money could not be relied upon should be of very significant concern to the members of the House.
Reports reveal millions of public $$ unaccounted for
(CNS): Despite having spent millions of dollars from the public purse between 2004-2007, the Health Services Authority is unable to account for any of it as a result of the major problems it has faced over its financial records. On Monday morning the annual reports for the financial years 2004-07 were tabled in the Legislative Assembly by the health minister, illustrating the reality of what government’s ongoing financial reporting problem means to the people of Cayman. On top of the millions of dollars paid from the public purse by government to purchase services from the authority, the hospital also received subsidies over the four year period totalling almost $40 million from the tax payer, none of which has been accounted for.
Although the HSA is said to have made considerable strides and has a strategy to get to a point where it can be accountable to the people for the money it has spent, the disclaimers from the Auditor General’s Office drive home the reality highlighted by both the previous and current auditor general. The people will never know what happened to that money and how meaningless the late reports are.
With no financial records at all for the years ending 2004 and 2005, the reports for those 12 month periods are merely a list of the budget allocations and the hospital’s goals and objectives. In a statement the current chairman of the board, Canover Watson, lists too short a time frame for the change from a department to an authority, as well as inadequate capitalisation, turnover in senior staff and Hurricane Ivan as the main reasons why the HSA cannot account for a single cent of the approximately $58 million it received in payments from government for services and subsidies over those two years.
In the 2006 year-end report financial records were submitted to the AG’s office for audit. However, the then AG, Dan Duguay, revealed seven reasons for being unable to complete the audit and the reason for the “Disclaimer of Opinion”, which ranged from inadequate accounting records to the complete absence of invoices to account for operating expenses. In his statement, the current chair acknowledges continuing problems but states that things are improving for future years.
The year-end report for 2007 sees the auditor general offer a disclaimer of opinion again, this time on five major issues, from incomplete records relating to patient revenue to the purchase of supplies and materials, as well as human resource costs, all of which the AG was unable to verify.
Watson in his statement talks of the continuing improvements in the HSA’s financial management going forward and states the reduction of the subsidy from government in the 2009/10 year. Going through the AG’s disclaimer, Watson says that all of his points are being addressed.
In total across this two year period the HSA received almost $100milllion in public funds for payment for services and subsidies which has not been accounted for.
Laying the reports on the table, Minister Mark Scotland said that, as a result of the hard work of the current board under the chairman ship of Watson and the hospital under the management of Lizette Yearwood, the HSA was moving towards removing disclaimers in the future. He said the authority was committed to complying with the requirements of the PMFL and fiscal prudence.
The reports for the fiscal years 2008, 2009 and 2010 have yet to be presented to the Legislative Assembly, but according to the auditor general’s most recent assessment, 2008 has been completed, 2009 has been finalized and 2010 is in progress. The four reports from 2004-07 are now public documents and available from the HSA or the Legislative Assembly.
Closing the achievement gap with baby talk
(NPR): In the mid-1960s, Betty Hart was a graduate student in child development working at a preschool in Kansas City, Kan. The preschool was for poor kids — reallypoor kids. Many came from troubled housing projects nearby. But Hart was determined not to see their limitations, only their potential: Hart’s job was to teach these underprivileged kids how to speak like the children of her professors at the University of Kansas. For years, she and university professor Todd Risley worked tirelessly toward this goal, doing everything they could think of to expand the vocabularies of these 4-year-olds. The idea was that if the kids could speak with the fluency of their wealthier peers across town, they might go on to similar academic achievements. The problem, they realized, was that they weren’t getting to the kids early enough. Which led to this question: If age 4 was too late, when was early enough?
District democracy dashed
(CNS): The government passed through its Advisory District Councils Bill (2010) by eight votes to five in the Legislative Assembly on Monday afternoon, paving the way for members of these new local bodies, which will advise MLAs, to be appointed by Cabinet as opposed to winning their place through a vote. The bill was opposed by the only independent member and the entire opposition bench after government refused to reconsider making them elected councils or bodies chosen by all the constituency MLAs, dashing hopes for district democracy. Despite the premier’s decision to have the bodies appointed, McKeeva Bush said the bill would improve public participation and set in train an “evolutionary change” between the governed and those who govern.
Bush spoke about democracy owing much to Christianity (despite the fact that it originated in ancient Greece before the birth of Christ) and said that while Cayman was not a theocracy it had drawn heavily on its Christian heritage and he hoped it would continue to do so. He did not say if this meant that the Governor in Cabinet (aka government) would be appointing members of the church to each of the district councils. He did say, however, that the creation of the councils was the start of new kind of representation which would “significantly enhance” the country’s system of governance.
“This promises a different quality of involvement by the public from anything we have seen before,” Bush told his legislative colleagues.
His enthusiasm for the councils, which will consist of ten members, all appointed by the Cabinet with the opposition leader allowed to recommend just two members, was not equalled on the opposition benches. Alden McLaughlin, who spoke against the bill, first said the councils were designed to be extensions of democracy and not a rubber stamp for government.
“Its objective was not to become a creature of government, bound to carry out government’s will. That was what it was seeking not to do,” said the George Town MLA, who added that government could essentially control every member of the committee.
He warned that the country would wind up with functionaries of government sitting in a constitutional role pushing government policy, which could not be an improvement on democracy. The George Town member said it was a tragedy that the Constitution was being used to introduce something as undemocratic as what was being proposed.
His colleague Arden McLean, who has a single member constituency in East End, agreed with McLaughlin and raised what he said was a very real concern for him that the councils would be used to steamroll his opposition to the East End seaport. He said government could load the East End district council with people who supported the port, despite the fact that his constituents who had voted for him were against it. In support of the principle of district councils, he said they should be elected in a town hall style meeting or at election time, otherwise the people would not have a real voice, he said.
“You think that government is going to pick someone in East End that supports me?” he asked rhetorically. “No. Let’s get real. They are going to pick people who support the cargo dock. This is the real world and if we don’t see it we have our heads in the sand.”
McLean stated that the proposal to appoint through Cabinet was undemocratic and that the democratic process was about much more than handing someone an appointment to a board. “The councils should be about empowering people and this isn’t empowering anyone,” he said.
The independent member from North Side submitted a full amendment to the government’s bill to make the councils elected. As the only MLA who already has a district council in his constituency of North Side, Ezzard Miller offered to give everyone a copy of the Constitution under which his district council was created so that it could be used as a model.
Miller said he was particularly opposed to government’s bill and proposal to appoint the councils as a result of the use of the word 'party' because, as an independent, under this law he wasn’t entitled to recommend anyone. Moreover, the fundamental difference between the North Side district council and that proposed by government was that the government councils would be appointed and controlled by the Governor in Cabinet and his was elected.
He said his own district council was elected “by the people, of the people and for the people” as all district councils should be under the law. Miller revealed how he consulted his council before and after every sitting and was guided by those locally elected people who, he said, as volunteers had done a fantastic job.
Concerned about how the agendas would be set by whom, he pointed out that the district councils should hold their MLAs accountable to the manifesto on which they were elected to serve and not what government policy now is.
“I can’t support this bill as is, so, as is my usual modus operandi, I shall offer my amendments to the bill,” Miller told his legislative colleagues, before he read out his proposed changes to turn the government’s intention to appoint the councils into an elected system. After making his case, Miller said he believed the country’s electorate was becoming more sophisticated. “We need to enable them and to show greater respect for the people’s participation,” he added.
The premier was not persuaded by anyone on the opposition benches, however, and said government had a right to put people on the local councils. Despite the fact that the North Side district council was elected, he criticized it as he said it was Miller’s supporters.
Bush insisted that the bill was a good law and saw nothing wrong in the appointment of the councils being dominated by Cabinet. Becoming quite angry with the opposition for suggesting that the government would be loading the councils with its supporters regarding the port in East End, he denied that government would be manipulating the membership. He said that he had always supported the idea of advisory district councils and pushed for it during his whole political career.
“They will say anything to try and sound credible,” Bush yelled at the opposite side of the house. “I know their shenanigans,” and he accused McLaughlin, who he said was “some kind of lawyer”, of twisting the language of the bill.
The premier said he did not believe the people wanted the councils to be elected as they were advisory bodies and not local government. He also indicated that this would enable other “good people” who may not be on the electoral list to offer advice to MLAs.
Cayman not only place rejected by US brokers
(CNS): In the wake of a US based broker’s revelations that it would not be doing business with clients in the Cayman Islands in December, it appears that this jurisdiction is not the only offshore centre receiving the cold shoulder. Sources in the Bahamas have also revealed that TD Ameritrade is closing accounts registered there as well. It is understood that the broker is telling clients there that it is “to mitigate risk”. When the firm first revealed to a number of its Cayman clients that it would no longer being doing business with them, it indicated it was as a result of international requirements. Government told CNS on Monday that officials were still following up on the situation and would keep the public informed of developments.
TD Ameritrade wrote to a number of its Cayman based clients in December to inform them that they were placing restrictions on accounts in Cayman because of international requirements. “After assessing global requirements for doing international business, TD Ameritrade has decided that we will no longer open or maintain accounts in certain international jurisdictions,” the letter stated.
In a phone call to one member of Cayman Finance, the local industry body, the brokers reportedly said this was as a result of a directive of some kind from the US Office of Foreign Assets Control (OFAC). However, the US treasury office denied having issued any kind of order and pointed out that it does not block transactions with jurisdictions, but targets specific parties. It told Cayman’s Washington based attorneys, Sidley Austin LLP, that there were no orders, directives or other regulations that restricted US financial institutions or US citizens from doing business with the Cayman Islands, its financial institutions or residents.
"It is now clear that any action TD Ameritrade may have taken was made without the knowledge or approval of OFAC," government said in a statement. It is still unclear why TD Ameritrade and other related brokers have made the decision not to do business with Cayman based clients or, as has now been revealed, the Bahamas but government says it will follow up on the matter.
Cayman Finance said that TD Ameritrade is accepting alternate US addresses for existing clients and that TD Waterhouse in Toronto is still accepting Cayman clients, as is Charles Schwab. It too has said it will continue to pursue the reason why the brokers have made this decision and intends to keep its members informed.