Minister of Finance Paula Cox has revealed that a wide-ranging inspection of companies at the centre of money laundering and corruption allegations is set to conclude by the end of the month.

She has promised that there will be no cover up regarding the dealings of the IPOC International Growth Fund and associated companies as it is essential that Bermuda?s international reputation is protected.

Last month, the Wall Street Journal revealed that the mutual fund had been set up on the Island five years ago by a convicted fraudster.

It was alleged that it was effectively a holding company for around $1 billion in telecommunications assets transferred through a network of shell companies. The WSJ the scandal went all the way up to the Russian IT and Communications Minister Leonid Reiman.

Former Opposition leader Grant Gibbons said in December that a number of international money laundering probes into the matter were casting doubts over the credibility of Bermuda?s entire fund industry.

However, in a statement released yesterday, Ms Cox responded to scrutiny on the issue by promising tough action. She said she had requested inspections into IPOC International Growth Fund Limited and eleven other associated Bermuda companies. In March 2004, she appointed two inspectors from KPMG Financial Advisory Services Ltd to conduct an independent probe.

The terms of reference include identifying the source of IPOC?s funds, considering whether it adhered to undertakings given to the Bermuda Monetary Authority and determining whether Bermuda?s laws were breached.

?The nature of the investigation and the wide-ranging scope and interlocking network of the companies has required considerable detailed investigation and analysis of the corporate structure and on-site visits to other jurisdictions.

?This has been no simple task. However, I have been periodically briefed as to the status of the investigation. It has comprised many layers,? she said.

Ms Cox acknowledged that any time there is a question raised over the conduct of a company with a Bermuda connection, it causes by implication questions to be raised as to the Island?s reputation. Accordingly, she said, the IPOC matter has been taken very seriously and that, given the limited powers available to the Bermuda Monetary Authority, it was decided to invoke the stronger powers of the Minister of Finance to order an inspection.

?There will be no form of cover up and any necessary follow-up action will be actioned. Any suggestion to the contrary would be flagrantly untrue and palpably wrong,? she said.

She explained that the inspectors are adhering to a precedent set in the United Kingdom in similar statutory investigations whereby the individuals to be criticised are given a period to comment on the criticisms before the report is finalised.

The inspectors, she said, anticipate that letters to this effect will be issued to the relevant parties before the end of this month. Once this period has ended, the inspectors will finalise the report and it will be issued to Ms Cox and the companies.

The Minister did not mention in her statement whether the contents of the report will be made public at any point, and could not be reached for comment as went to press.

The IPOC allegations are not the only ones that have recently cast a cloud over Bermuda?s international reputation.

The UK?s High Court of Justice found last month that a sham Bermuda company, Sphynx (Bermuda) Ltd, was used by the Republic of Congo to mask the movement of hundreds of millions of dollars in oil revenues with the aim of keeping money out of the hands of creditors.