Caledonian in liquidation as CIMA revokes licences

| 24/02/2015 | 0 Comments

(CNS Business): Controllers appointed by CIMA to oversee the affairs at the beleaguered Caledonian Bank and Caledonian Securities have been officially named by the local regulator as the joint official liquidators. Following the controllers’ interim report, the Cayman Islands Monetary Authority has revoked the licences and petitioned the Grand Court to wind up the bank.

Keiran Hutchison and Claire Loebell will now take on the liquidation of one of Cayman’s oldest offshore banks after an alleged penny stock scam brought the 40-year-old bank to its knees. The US Securities and Exchange Commission (SEC) filed suit against Caledonian bank and Caledonian Securities as a result of allegations that they and three other companies were said to be involved in a $75 million shell company scam.

Although the bank had attempted to appoint its own liquidators in the wake of its troubles, the chief justice ruled in favour of CIMA’s controllers earlier this month, and as expected the pair will deal with the liquidation.

CIMA explained in a release Tuesday that it had adopted a resolution to take the necessary action to revoke the bank’s licences and petition the courts in line with its powers under the Banks and Trust Companies Law and the Securities Investments Business Law.  It then filed the petitions on 17 February in the Financial Services Division of the Grand Court and Chief Justice Anthony Smellie granted the winding up petition yesterday.

Hutchison and Loebell now have the power, among other things, to take the necessary steps conferred under the Companies Law to protect the bank’s assets and consider appropriate actions for its creditors.

CIMA said the liquidators were “authorized to act jointly and severally and take such steps as necessary and expedient in the exercise of their powers conferred under the Companies Law for the protection of assets and acts incidental thereto and consider appropriate actions for and on behalf of the entities within and outside of the Cayman Islands.”

Caledonian has already filed for bankruptcy in New York following the damning allegations, which had caused a run on the bank when depositors tried to withdraw US$68 million.

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Category: Finance, Financial Crime

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