In a Reuters interview (not available yet on the Web) with Luigi Spaventa, the former head of the Italian stock market watchdog, Consob, he says stock markets should refuse to list firms such as stricken food group Parmalat whose ownership structure spreads into murky offshore centres, such as the Cayman Islands.
If a stock market is allowed to run its own affairs, then of course there is nothing wrong in it banning a would-be listed firm on the grounds of its ownership structure. But it is surely a different matter when it comes to a government regulator telling investors that a firm is so dodgy that they cannot put their own wealth into it via an exchange. Surely caveat emptor (“let the buyer beware”) applies here.
In any event, I wonder if crossed the mind of this old regulator that one key reason why so many firms domicile their business affairs in offshore centres is to avoid the crushing taxes imposed by European nation states?
I think Samizdata’s readership is ahead of me already on that one.