Tale of the tape: IFC & Gallen; Bahamas & Cayman Islands

...Concord investigations reveal striking similarities

As the debate on the legitimacy of the International Finance Consortium (IFC) Global Limited as a reputable financial institution rages, enquiries here show striking similarities between IFC and Gallen Limited, the special purpose company that the purchase of the controversial Gulf stream III presidential airliner is associated with.

Checks with sources at the IMF/World Bank headquarters in Washington DC, the American national capital, and a source at the Bahamas Consulate on 231 East, 46th Street, downtown Manhattan, shows a striking similarity: Like Gallen Limited, IFC Global Limited at the moment has a non-existent place of abode or address in the Bahamas.

“I’ta mon non exist man ” said a Consulate staff who met this reporter who posed as an influential African travelling to the Bahamas on a boat cruise from New York to track business opportunities in Nassau. Nassau is the capital of the Bahamas and part of over 700 islands, and 2000 islets and cays forming Bahamas.

A Jamaican, who later explained that the Consulate staff meant the address “doesn’t need to exist”, arranged the meeting. The gist of the explanation was that IFC’s offshore address: IFC Global Limited, c/o UBS Bahamas Limited, UBS House-East Bay Street, Nassau- Bahamas, as contained on its documents is most likely not an actual address just like Gallen’s address on the Gulf Stream III jet presented to Parliament wasn’t.

In simple language, one could comb the mini-islands, islets and cays of Bahamas and not find any address like that of the IFC. It simply does not presently exist in Nassau, the capital, sources say.

But the IFC does not need to have an actual address to operate since it is legal in the Bahamas to have such non-existent addresses for offshore companies, was the explanation by the Bahamas Consulate staff.

The addresses of both the IFC and Gallen might exist only in the books of the attorney or banker who registered the companies as offshore entities in the Bahamas and the Cayman Islands respectively.

“This is how Gallen Limited was registered in the Cayman Islands and did ‘legitimate’ business with the NDC. This is why the address of Gallen is non-existent on the Caymans and cannot be traced elsewhere, except through its agent – HSBC”, is how a Ghanaian-American banker here who preferred to remain anonymous explained it.

Investment lawyers and analysts who have spoken to the National Concord in Ghana are also fretting over the pace at which the loan transaction is being rushed through in spite of legitimate queries being raised from several quarters about the credibility of the consortium.

Queries have focused on the bona fides of IFC and whether due diligence on it’s background, antecedence and debt profile has been done. “Which countries in Africa, Asia, Eastern Europe and South America are on record to have benefited from a similar arrangement. If the government has this information it should share it with us”, said one of them.

Truth is the IFC is very much like Gallen, just as the Bahamas and the Cayman Islands are very much alike. There are differences but there are many more similarities.

Both the IFC and Gallen are unknown in corporate America and the existence of their track records in the business world is doubtful. Even Chemac, the northern New Jersey -based company headed by the only publicly known board member of IFC, Mr. Horst Schneider, does not also have a strong, reputable corporate image here despite claims that it is a major American company (read main story).

Both IFC and Gallen are also legal, limited liability offshore companies on former British-ruled islands in the Caribbean: Gallen in the Cayman Islands and IFC in the Bahamas.

The Cayman Islands and the Bahamas are both small island states few kilometres off the coast of America, and thousands of miles away from Ghana. In fact, the Bahamas is 50 miles off the coast of Florida, far closer to the US than Cuba, which is 90-miles near, and much closer than any of the Caribbean island states.

The Cayman Islands and the Bahamas are also island states that pride themselves as tax havens, with no income, capital gains or sales tax. They equally have low property tax, and import duties.

“We’ve no taxes on capital gains, corporate earnings, personal income, sales, inheritance, or dividends. This applies to all residents, corporations, partnerships, individuals and trusts”, noted a female Consulate staff in a phone chat in an effort to sell-off Bahamas as an investor’s paradise to this reporter during a call to the consulate on Thursday, July 26.

Both IFC and Gallen have no exchange control laws and no restrictions on current account transactions. Additionally, there are no restrictions on free repatriation of profits.

The two island states are also thriving offshore financial centres, with combined banking assets of over $1 trillion.

The two countries have both crossed swords in the past with “big brother” USA, which has constantly complained about their offshore investment activities. Both countries have reputations as money laundering centres, with the Bahamas also serving as a hot drug transhipment destination to the US and Europe in the 1980s. It is rated above the Cayman Islands by most websites and international magazines in that area.

But there are differences between the IFC and Gallen, just as differences exist between Bahamas and the Cayman Islands.

One is that the only publicly known director of Gallen is former Ghanaian Finance Minister Kwame Peprah. On the other hand, the IFC has a German-American in the person of Chemac’s President Horst Schneider as the only presently known board member.

Bahamas population of 300,000 is almost eight times that of the Cayman Islands 40,000 population size. Also, the Bahamian dollar is fixed at a rate of one to one against the US dollar, whiles the Caymanian dollar currently stands at a rate of almost one to two.