THE farcical nature of the Bermuda law that was supposed to restrict foreign ownership of local companies to 40 per cent was exposed in 2001 in a transaction regarding ownership of the Bermuda Commercial Bank,

On June 15, 2001, BCB announced that Netherlands Antilles-registered First Cura?ao International Bank N. V. had increased its shareholding from 33.74 per cent to 48.08 per cent of common shares.

The announcement was made just 49 days after BCB became the last of Bermuda's three banks to be granted an exemption from legislation known as "the 60:40 law", effective April 27, 2001.

However, the transaction seemed to be merely the formalisation of an arrangement entered into in 1995 that apparently legally circumvented the 60:40 law.

FCIB increased its take in BCB by "buying" 613,213 shares of BCB common stock and 150,772 BCB warrants from Bermuda-registered Delta Holdings Ltd.

But it seems that FCIB, a foreign entity, already effectively controlled Delta Holdings, a local company, since Delta was incorporated on June 6, 1995, using then Government Minister Clarence (Tessie) Terceira as a Bermudian nominee.

Delta's file at the Registrar of Companies showed that FCIB granted Delta a loan of US$5 million shortly after its incorporation for the sole purpose of Delta buying shares in Bermuda Commercial Bank.

"The Lender has agreed to grant credit facilities to the Borrower up to an aggregate amount of US$5,000,000 for the purpose of acquisition of shares by the Borrower," reads the agreement.

The loan was secured by "any and all issued shares in the capital of Bermuda Commercial Bank held or acquired by Delta Holdings Ltd.".

Vice-chairman of Delta Holdings was John Deuss ? who also just happened to be the chairman, president and CEO of the Bermuda Commercial Bank and the beneficial owner of First Cura?ao International Bank.

Delta's chairman was Dr. Clarence Terceira, a former United Bermuda Party Government Minister and, more importantly, a Bermudian, who seemed to be FCIB's chief nominee on the board.

Other Delta directors were: Paul Terceira, as alternate to Clarence Terceira; M.E.W. Deuss, of the Netherlands, as alternate to John Deuss; Marcia Spencer, who worked for BCB subsidiary International Trust Company of Bermuda Ltd.; and Joy Pimental, of Argus Insurance.

Delta's share register showed that 9,600 shares or 80 per cent of all shares were held by the International Trust Company of Bermuda Ltd. (ITCB) with the other 2,400 shares or 20 per cent held in the name of FCIB.

ITCB almost certainly held its shares in a nominee capacity for a client who did not want his or her identity to be publicly available.

Deuss has been one of the most significant international businessmen on the island for many years. It is widely believed he financed most of the election campaign that culminated in the Progressive Labour Party achieving Government for the first time in November, 1998.

Deuss is a former car salesman in the Netherlands who went on to become something of a legend in the international oil industry. In the 1980s, he made a fortune by breaking an apartheid-induced trade embargo on South Africa, at one time providing as much as 20 per cent of its crude oil requirement, according to press reports.

When a British newspaper exposed his role in helping to prop up the South African economy, his home in Holland was fire bombed by a protest group calling itself "Pyromaniacs Against Apartheid". No one was injured in the attack.