GRENADA TO RESUME NEGOTIATIONS WITH OFFSHORE INVESTORS

ST. GEORGE, March 22, 2008 -- Grenada is looking to relaunch its shuttered offshore financial sector after a six-year hiatus that was prompted by a multi -million dollar (euro) fraud scheme.

A consultant is expected to meet soon with government officials to recommend what type of offshore entities would best suit the eastern Caribbean island, said Timothy Antoine, permanent secretary in the Ministry of Finance, on Thursday.

"Grenada in February created a new regulatory body to oversee financial institutions, including credit unions and offshore brokerages, to avoid fraudulent activity," Antoine said. A similar agency existed before the fraud scheme, but only monitored offshore banks.

The First International Bank of Grenada collapsed in 2000 after its owner promised investors huge returns from the bank which,  he said, was backed by a US$20 million ruby carved into a statue of a boy on a water buffalo.

The bank's 4,000 investors were cheated out of US$170 million through a Ponzi scheme that used their cash to lure other investors without paying them back. Most were U.S. citizens hoping to boost their retirement income.  Part of the money was returned to investors as phony interest payments.

In 2002, Grenada suspended its financial sector's operations and later revoked the licenses of all offshore banks.