Blow to Labuan as tax haven, says DAP

LABUAN: Former DAP Chairman here Lau Seng Kiat has questioned the Government’s rationale for parking billions of ringgit in 1MDB funds in distant Cayman Islands instead of the Labuan Financial and Business (ILFB) centre.

Lau was referring to on-going controversies relating to the investment prudence of 1Malaysia Development Bhd (1MDB) which is described as a sovereign fund under the Ministry of Finance.

It was disclosed that 1MDB had parked RM7.2 billion in Cayman Islands which is known as a tax heaven, similar to Labuan.

“Many people here find it baffling that 1MDB did not use the facilities in Labuan IBFC.

How is Labuan IBFC going to convince investors from outside the country to invest here when the Malaysian Government preferred another tax haven (Cayman Island).

“It may lead investors to think that Labuan IBFC is not up to the mark despite billions of ringgit having been spent since 1990.”

He said some light shed on this matter would certainly help dispel misconceptions about Labuan IBFC.

He said if such a huge amount had been kept in Labuan IBFC the figure would have been reflected in the annual report of Labuan Financial Services Authority.

Lau noted that Labuan has been a financial centre for 24 years (since 1990), has come of age and well established and recognised globally by ranking agencies.

The IBF sector is supported by banks, investment banks and other financial firms offering a wide and diverse of investments products.

There were more than 50 banks in operation and thousands of registered offshore companies, all reflecting confidence in Labuan.