ExCo ApprovesSale of Majority
Shares to Foreign Company
A recent Executive Council decision to grantNuance Global Traders permission to purchase 51 per cent sharesin the local Island Companies was influenced by among otherconsiderations - possible advantages of increased regional tradefrom a Cayman base.
The idea of this Caymanian company usingthe backing of Nuance Global to spread its wings throughout theregion was coupled along with a belief by ExCo that such an expansionwould see a diversification of the economy, while giving theseislands good public relations through having the largest dutyfree company in the world here.
"Council therefore welcomed the possibilityof the additional business dynamics of an enlarged regional centre,based in the Cayman Islands, by a multi-national firm, while mindfulof the need for and benefit from fair competition and fair trackpractices," the announcement said.
ExCo's decision to grant the licence wasreported by Cayman Net News on 26 July, one day before the officialannouncement, and at that time this newspaper reported that thego-ahead for Nuance comes after some five years of appeals andlitigation.
In its announcement ExCo has said that thelicence is for seven years and will be backdated to December 1998,when the Trade and Licence Board had initially refused Nuance'sapplication.
At the time of refusing the company's applicationto buy majority ownership shares in the local duty free firm theBoard had applied a regulation which said that in the absenceof special permission by ExCo, non-Caymanian companies cannothave more than 40 per cent shares in local businesses.
ExCo said that in making the decision ittook into account Nuance's stated aims that it would not be presentingunfair competition to other retailers.
"Nuance had stated that it does notintend and has no desire to drive out competition in the CaymanIslands or to dominate the tourist-related market. Nuance hasalso stated that its decision to invest in Island companies wasbecause it required a base from which to develop its commercialinterests throughout the Caribbean as a whole," ExCo said.
According to the announcement, assurancewas sought that the buying power of Nuance will be used to theadvantage of the consumer and therefore the Cayman Islands.
ExCo's green light to nuance carried a provisothat Island Companies would continue to be 49 per cent owned byCaymanians.
"If Nuance were to seek an increaseon its 51% stated, it would require the further consent of theTrade and Business Licensing Board and a variation of this licencecondition. It would also be understood as a condition of the licencethat the local management would remain unchanged."