Kenneth Rijock

Kenneth Rijock

Wednesday, June 24, 2020

THE SHAPE OF THNGS TO COME ? PUBLICLY-TRADED CAYMAN ISLANDS COMPANY REDOMICILES TO SWITZERLAND TO ESCAPE EFFECT OF TAX HAVEN STIGMA ON SALES




A major Asian company, whose shares are publicly-traded, has announced that it is redomiciling (reincorporating) itself in Switzerland. The company's June 18, 2020 Annual General Meeting Announcement, made from Zurich, disclosed that its current Cayman Islands domicile is creating problems in the international financial community, and potentially hurting both sales and its global image.

Read this extract from its recent message to its shareholders, which appears to have been carefully drafted to extol the benefits of reincorporation (emphasis added) versus the disadvantages of Cayman:

"We are particularly pleased that the special resolutions to approve redomiliciation to Switzerland were passed. The current Cayman Islands domicile has become a compliance red flag for most banks and trading intermediaries outside Switzerland, which have prohibited outright or made it very difficult to trade shares in companies incorporated in the Cayman Islands. The Board of Directors  believes the share price weakened, as investors are not able to easly but or sell shares in [XYZ Corporation] , ans a redomicile should create greater liquidity for [XYZs] shares. "

If publicly-traded companies incorporated in the Cayman Islands find their domicile constitutes a "Compliance red flag" is that not a signal to the global compliance community at large that, by definition, ANY Cayman Islands company should now, for risk management purposes, be regarded, for all purposes, as possessing Elevated Risk ? Compliance officers whose portfolio include the annual assessment of Country Risk kindly take note.



No comments:

Post a Comment

Note: Only a member of this blog may post a comment.