size of their operations, according to Permanent Secretary Dr. Walwyn Hughes.

But a plan to place them under the Bermuda Monetary Authority Act 1969 "regrettably ... was never resolved before the whole thing came unstuck,'' Dr. Hughes told The Royal Gazette .

Televest Ltd., Telecheck Holdings Ltd., and three related companies have been placed in provisional liquidation by the Supreme Court. A hearing date on petitions to wind up the companies has not been set.

More than 500 Bermudians had invested about $8.3 million in Televest, attracted by guaranteed annual returns of seven to nine percent on purchases of preferred shares.

The shares were redeemable upon 14 days notice, but dividend payments and redemption of shares was halted when provisional liquidators Kempe & Whittle Ltd. were appointed in December.

The apparent failure of the companies prompted questions from the public about why Televest was not under Government control.

When that question was put to Finance Minister the Hon. David Saul, he stressed that Televest was not a financial institution. "This is a private company -- private companies come and go,'' he said.

But a document given to The Royal Gazette by lawyer Mr. Julian Hall showed that Dr. Saul wanted to list some of the Televest companies along with financial institutions in the Third Schedule of the BMA Act.

The move would be made "in the public interest to introduce a level of investor protection,'' said the two-page document, titled: "The Televest Group -- Memorandum by the Minister of Finance''.

Dr. Hughes did not look at the newspaper's copy of the memorandum, but he said it "sounds very similar to something the Minister had prepared.'' The document was considered by Government in early summer, he said.

Dr. Hughes would neither confirm nor deny that the memorandum was a Cabinet document, as it was described by Mr. Hall.

The lawyer represents Televest directors Mr. Thomas Burns, Mr. Richard Burns, and Mr. Christopher Donnachie, who are fighting the liquidations. Mr. Hall would not say how the memorandum came into his possession.

"The Government gave consideration to it,'' Dr. Hughes said. "The question then arose as to which of the four or five companies could probably or should probably be put into the Third Schedule of the Bermuda Monetary Authority Act.

"We entered into some discussions,'' he said. "Regrettably, that was never resolved before the whole thing came unstuck.

"The Third Schedule of the BMA Act is really for financial institutions. You don't put them there without good reason to do so.'' The memorandum said that an earlier investigation by the Attorney General's Chambers showed Televest's "products'' did not contravene the Interest and Credit Charges Act 1975, nor the Deposit Companies Act 1974.

"This was not a bank or deposit company or anything else,'' Dr. Hughes said.

"It obviously wasn't a financial institution, per se.'' Asked why the Government would want to include it with financial institutions in the BMA Act, Dr. Hughes said it was because of "the scale of the thing,'' and because of "the fact that the Government was concerned''.

Mr. Hall, who has alleged a local conspiracy to shut down the Televest companies, said the existence of the memorandum showed that Dr. Saul clearly "regarded the Telecheck group as a financial institution,'' and "that for reasons that we don't know about he clearly wanted to find a way to police the group under the Monetary Authority without trying to change the law.'' There had been no failure to honour promises to investors and no complaints from investors, but "considerable and growing disquiet amongst at least one or two of the banking institutions about the rapid rise of the Telecheck group,'' and the fact "they were swallowing up significant volumes of Bermuda dollar liquidity and there was no Government control over it,'' Mr. Hall said.

He said the memo, combined with the fact Government appointed an inspector soon after the provisional liquidations were ordered, amounted to "more than coincidence''.