Cayman Island rules are allowing Chinese swindlers to take advantage of Western stock markets, enriching themselves and leaving the losses with UK shareholders, writes Sean Worth

Spying, human rights abuses, intellectual property theft and unfair trade practices – the record of Chinese offences against the United Kingdom is already long. But now you can add robbing pensioners of their hard-earned savings and raiding the endowments of the most cherished British institutions to the list.

The latest transgression is possible due to the seeming inability – and apparent unwillingness – of the Cayman Islands’ legal system to protect minority investors of companies incorporated in the British Overseas Territory, as put on stark display in a Cayman court decision in late November, the implications of which are just becoming clear.

Chinese swindlers have been listing and growing companies on Western stock markets, then selling at well below fair value, only to then relist in China at higher values, enriching themselves and leaving the losses with UK shareholders. Some £100bn of British capital is at risk.

This troubling trend could threaten the Cayman Islands’ status as a preeminent financial centre – key to the Territory’s economy and workforce. It’s not just the jurisdiction’s tax neutrality that has made it a popular domicile for tens of thousands of international companies, but also its well-established investor protection laws.

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