WSBC named, told to go

27 March: Bank ‘ruining our reputation’ ordered to pay $125,000 in costs and quit the Cook Islands.

The lid of secrecy was lifted yesterday on the long running civil court case between the Financial Supervisory Commission and WSBC Bank Ltd.

Chief Justice David Williams issued a consent order which allows some details to be published, after a settlement in the case was announced earlier this week.

Last week parliament pushed through the second reading of the offshore Banking Amendment Bill which will abolish all offshore banks and the licences under which they operate. The bill is now lying for the mandatory 90-day period before its third and final reading.

It will give the five offshore banks (save ANZ which also has a domestic banking licence) nine months in which to cease operating.

Deputy prime minister Sir Terepai Maoate said in parliament last Thursday night that the case with the bank was ruining the reputation of the country.

“Our reputation is on the line because of institutions like this – so it is important for us to pass this bill.”

WSBC bank’s licence shall be revoked on December 31 this year, and WSBC will have to pay $125,000 to the FSC toward costs incurred during the case.

The case was due to be heard in the Cook Islands High Court before the chief justice from next week. Cases involving the offshore banking industry are held behind closed doors.

The order issued by Chief Justice Williams follows a joint memorandum of counsel dated 24 March 2009 for consent orders, and is as follows—

1. The decision of the Financial Supervisory Commis-sion (FSC) to revoke the banking licence of WSBC Bank Limited (WSBC or ‘the bank’) effective on 31 July 2009 or upon the date upon which the FSC is satisfied that all deposits with WSBC have been repaid, whichever is the earlier, is varied as follows:

a. The date upon which WSBC’s banking licence shall be revoked shall be 31 December 2009 or the date upon which the FSC is satisfied that all deposits with WSBC have been repaid, whichever is the earlier.

b. WSBC shall take all reasonable steps to wind down its business prior to the date of revocation, including, but not limited to, those steps set out in schedule A to these orders.

c. WSBC shall not accept any business except from existing customers. An existing customer is one which is included in a list of existing customers as at 24 March 2009 to be prepared by WSBC and provided to the FSC no later than 30 March 2009.

d. Pending the revocation of its banking licence, WSBC shall comply with any licence conditions.

1.1 None of these orders shall prohibit, restrain or limit the FSC from disclosing information regarding the proceedings and these orders to any relevant international body and any other regulatory, supervisory and law enforcement agency in the exercise of its functions under the provisions of the Banking Act 2003, the Financial Supervisory Commission Act 2003 and the Financial Transactions Reporting Act 2004.

1.2 Upon the date of revocation, all non-publication orders made in these proceedings shall expire, except that the court file shall not be opened for public inspection except by order of the court after hearing from the parties.

1.3 WSBC shall pay to the FSC the sum of $125,000 as a contribution towards the FSC’s costs of the proceedings, such payment to be made within 30 days of the date of these orders. - Moana Moeka’a

The face of WSBC, page 3.