Aborted buyout
puts focus on
the structure of
Resolution
The “thanks, but no thanks”
from Friends Provident to
Resolution’s £1.7bn takeover
bid last month has
shone a spotlight on the
structure of Clive Cowdery’s
Guernsey-domiciled acquisition
vehicle.
Although Friends Provident
never mentioned
Guernsey by name, it cited
among a number of objections
to the deal certain
governance arrangements
that it described as “totally
inappropriate in a public
company context”, some
of which are understood
to be possible in Guernsey
but not in the UK.
A spokesman for
Resolution said the company
did “not see [Friends’
rejection] as a Guernsey
issue”, adding: “Our feedback
from investors has
been very supportive,
which has been shown
through the investments
they have made in the
company.”
A spokesman for the
Guernsey Financial Services
Commission (GSFC) said
the island’s regulatory
regime met the standards
set by the International
Organisation of Securities
Commissions. He added
the Resolution vehicle
established in Guernsey
was not regulated by the
GSFC because it fell outside
of its normal remit,
typically covering collective
investments.
Policy Selection moves its
Assured Fund to Brussels
by helen burggraf
Policy Selection is moving
the assets of its $411m
Assured Fund to Brussels
from the Cayman Islands
to protect investor returns.
The move comes after
a US Internal Revenue
Service ruling in May
that a 30% withholding
tax should be applied to
profits derived from the
second-hand purchase of
US life insurance policies.
According to Patrick
McAdams, investment
director at Surrenda-link
Investment Management,
which domiciled its newest
fund in Luxembourg last
year in part for this reason,
the clarification had been
anticipated for years.
Policy Selection said
its “new eurozone tax
structure” would utilise
-50
Sep ’04 May ’05 Jan ’06 Sep
Source: Trustnet Offshore
the double taxation treaty
signed in January 2008
between Belgium and the
US, enabling it to safeguard
its investors’ returns.
“The intention of the
IRS is to tax any offshore
investor in [the] US life
settlements market at
30% of their gain [face
Irish funds body signs MoU with China
The Irish Funds Industry
Association (IFIA) has
forged closer links with
China after agreeing to
exchange regulatory and
industry information and
collaborate in “areas of
common interest”.
The IFIA sign a memorandum
of understanding
(MoU) with its Chinese
counterpart, the Securities
Association of China (SAC)
in Dublin on 20 July, which
set out plans for greater
government and industry
Assured Fund vs benchmark
100
75
50
25
%
0
-25
FO Hedge/Stru Prod – Mixed
engagement designed to
enhance the investment
funds industries of the
countries.
The MoU is the second
such deal between Ireland
and China in ten months.
Last October an agreement
was reached between the
Irish financial regulator, the
IFSRA, and Chinese regulator
allowing Chinese investors
to invest in Irish domiciled
funds.
Gary Palmer, chief
executive of the IFIA, said:
Policy Selection – Assured
May ’07 Jan ’08
Sep
May ’09
value less acquisition cost
and maintenance costs],”
said PSL finance director
Andrew Walters.
In separate news, the
Assured Fund has recently
been granted UK distributor
status, making it
tax-efficient for UK-domiciled
investors.
“Ireland is now well positioned
to be an international
partner to the expanding
investment management
industry in China and provide
a bridge for the international
industry.
“The number of organisations
looking to invest in
China through Irish fund
vehicles is increasing and
the agreement with the SAC
is further recognition of the
leading role Ireland plays
in the international investment
funds industry.”
NEWS
Depositors in
failed KFSIOM
to get money
back by Sept
More than three-quarters of
depositors in collapsed Isle
of Man bank Kaupthing
Singer & Friedlander
(KFSIOM) will receive all
their money back by early
September, according to
the Manx Government.
The Isle of Man parliament
has approved a
£193m funding package to
provide what it said was
early repayment for savers –
bringing to an end almost a
year of uncertainty brought
about by the collapse of the
bank last October.
The measure will allow
for repayment up to a
maximum of £50,000 under
the island’s Depositor
Compensation Scheme
(DCS). The Government
said this would allow for
more than 75% of savers to
receive their money back.
Manx Treasury minister
Allan Bell said £85m
had already been paid to
depositors under an early
repayment scheme giving
up to £10,000 each. The
current scheme is subject
to a ‘sunset clause’ which
means that its provisions
are due to expire on 23 Oct
this year.
Bell gave an assurance
in Tynwald, the Manx parliament,
that the level of
compensation for individual
depositors will be maintained
at least £50,000 in
the new amended scheme
that will replace the existing
legislation.
OECD launches global drive to stamp out ‘super wealthy’ tax dodgers
by Daniel JuDge
A global drive spearheaded
by the OECD to stamp
out tax evasion among the
‘super wealthy’ has begun,
with offshore centres once
again in the spotlight as a
key focus of the initiative.
More than 30 OECD and
non-OECD countries have
signed a pact aimed at
ensuring high net worth
individuals (HNWIs) pay
the correct amount of taxes,
partly by cracking down on
the “aggressive tax planning”
often used by them.
HNWIs were described
as posing “risks” and “significant
challenges” to tax
authorities in a report issued
by the OECD’s Forum on
Tax Administration (FTA).
This was because of the
complexity of their financial
affairs; an increased
likelihood of using offshore
centres to conceal assets;
and access to sophisticated
tax planning and advice
not readily available to the
less wealthy.
A policy document issued
by FTA warned that people
using offshore centres could
expect to come under more
scrutiny as a result of the
initiative and growing cooperation
between revenue
authorities.
“Individuals who hide
assets overseas can expect
an increasing number of
revenue bodies to co-operate
and share information
to ensure people pay their
fair share to help fund
governments worldwide,”
said Douglas H Shulman,
a commissioner in the US
Internal Revenue Service,
an FTA member.
The forum said that
its objectives would form
part of a rolling five-year
plan and said commissioners
would meet regularly
to review the progress of
the initiative.
August 2009 [www.international-adviser.com] INtERNAtIONAL ADVIsER
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