Cayman National Corporation (CNC) has revealed that it expecting to pay KYD5m ($6.09m) in fines to the US Department of Justice (DOJ) to settle an investigation related to potential violations of US criminal law relating to tax evasion by two of its companies.
The probe focuses on past wrong doing by Cayman National’s businesses Cayman National Securities Ltd. and Cayman National Trust Co. Ltd.
CNC, which has not disclosed the details of the criminal activity, said it had cooperated fully with the authorities as far as it was able within the laws of the Cayman Islands and it was continuing to negotiate with the US law enforcement authorities regarding the fine.
The firm added that no issues or wrongdoing has been alleged with respect to CNB (Cayman National Bank) or the parent company, CNC.
Cayman National in its fourth quarter report stated that due to its ongoing discussions and negotiations with the US DOJ, the bank is obliged to accrue an expense of KYD5m as a settlement amount.
"In all of the circumstances, the Board of Directors decided that it would not be prudent to declare a dividend at this time," the group said in a statement.
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The statement added the company is in the process of taking the necessary remedial action to deal with the issues within the companies which have been the subject of the tax probe.