WSBC victory earns praise

Saturday 28 March: Sir Terepai Maoate gives credit to FSC and legal team for successful settlement

Deputy Prime Minister and Finance Minister Sir Terepai Maoate has credited his small team at the Financial Supervisory Commission and its board for the successful settlement of the long-running WSBC court case.

“I am extremely pleased with this outcome and want to thank and congratulate FSC and the board for their tenacity and commitment to resolve this matter successfully for the country,” he said yesterday.

Speaking from Manihiki, Sir Terepai said he was always confident that a good result would be achieved by FSC and the legal team of local lawyer Tim Arnold and New Zealand lawyers Kit Toogood QC and Rebecca Edwards.

He said that those who had doubts and publicly criticised the government’s move to introduce the Banking Amendment Bill as being motivated to just get rid of WSBC have been proven wrong by the controversial offshore bank finally accepting the country’s position before the High Court in New Zealand.

Sir Terepai said after several years, the country is finally relieved of a case that has been very expensive and time consuming.

“FSC must really be congratulated for being so resolute, the board for being so supportive and the efforts of the legal team, all their combined efforts have no doubt saved the country what would undoubtedly have been an enormous amount of money.”

The FSC’s decision to revoke WSBC Bank’s licence remains in place, but the date of effect of the revocation has been varied to December 31, 2009. Appeal proceedings in the High Court by WSBC Bank against the FSC’s decision have been settled by consent.

WSBC is to pay $125,000 towards the FSC’s legal costs for these proceedings.

FSC Commissioner Lorraine Allan says they are satisfied with the terms of the settlement, which brings to an end no doubt the longest-running and one of the costliest cases in Cook Islands history.

“The enforcement action taken by the FSC against WSBC Bank demonstrates that the FSC is not prepared to tolerate financial institutions operating in the Cook Islands that fail to comply with the regulatory legislation. Despite being a small agency, the FSC aims to ensure that global regulatory standards apply to banks and other financial institutions operating in the Cook Islands.”

The Cook Islands Government recently announced measures to raise the profile of the country’s offshore industry and having a well regulated financial sector is a fundamental step towards achieving this.

Allan gave credit to her staff who worked so hard and had to put up with photocopying “mountains” of documents for almost five years, and her legal team for their determination.

“I’m also grateful for the unwavering support of my board over the years and to the DPM, I always knew we had his support and he never interfered in our investigations.”

She said assistance from PIFTAC (Pacific Islands Financial Technical Assistance Centre) and the Pacific Anti Money Laundering Programme was very valuable in strengthening the Cook Islands case.

“We had really good support from many quarters and for that I am really grateful because at times it was quite distressing.”

Allan says she wanted to thank her husband as well. “When it got really bad and I would get distraught at times, he would say ‘it’s your job, just get on with it’ and I’d pull myself together.”

This week’s outcome ends this particular case and others involving the WSBC that started in May 2004. - DPM Office