before they were placed in provisional liquidation, The Royal Gazette has learned.

A two-page document headed "The Televest Group -- Memorandum by the Minister of Finance'' -- recommends that Televest Ltd. and four related companies be put under the "supervision, regulation and inspection (of) the Bermuda Monetary Authority.'' The document, the contents of which a Government source confirmed as authentic, casts a different light on comments made by Finance Minister the Hon. David Saul when the Supreme Court ordered the companies' activities halted.

On December 15, when asked why Government was not regulating Televest, Dr.

Saul stressed that it was not a financial institution. "This is a private company -- private companies come and go,'' the Finance Minister told The Royal Gazette .

But the Minister's memorandum, which sources said was drafted months before the provisional liquidations were ordered, recommended an addition to the Third Schedule of the Bermuda Monetary Authority Act 1969 "in the public interest to introduce a level of investor protection''.

"Through its preference shares scheme, Televest Ltd. has now `borrowed' over $5 million from members of the general public,'' the memorandum says. The change would be made by order of the Finance Minister "to ensure that the operations of the group are being conducted in a prudent way''.

Dr. Saul, who is attending the World Economic Forum in Switzerland, could not be reached yesterday to answer questions about why the order was never made.

More than 500 Bermudian investors who invested about $8.3 million were left in the lurch when Televest and other companies were placed in provisional liquidation. Directors Mr. Thomas Burns, Mr. Richard Burns, and Mr.

Christopher Donnachie are opposing petitions to wind the companies up. A hearing date in Supreme Court has not been set.

Televest investors bought blocks of preferred shares and were promised annual returns of seven to nine percent. The shares were to be redeemable upon 14 days notice.

Televest was owned by Telecheck Holdings Ltd., a company that operated 10,000 Signature and Travel Card credit cards. Telecheck's cheque approval service for merchants processed more than 25,000 cheque transactions per week.

A day before provisional liquidators were named for those two companies, the related companies TBL Ltd. and CTRAK Ltd. were provisionally ordered wound up in response to petitions from United Kingdom creditors. The apparent failure of the four companies was described as a chain reaction.

The UK claims are for more than $2 million. A petition to wind up a fifth related company, Compuguide Ltd., was later added.

The Minister's memorandum says that regulation was first considered in 1990, but rejected because of concerns about giving Televest a "seal of approval''.

The document outlines the history of the companies, noting that Telecheck opened its doors in 1985.

The Bermuda Monetary Authority first met with the group's principals in May of 1989, "primarily to gain a better understanding of the group's operations.'' After that, the BMA consulted with the Attorney General's Chambers and was advised that "products'' offered by the group contravened neither the Interest and Credit Charges Act 1975, nor the Deposit Companies Act 1974.

When 1990 amendments to the BMA Act were drafted in 1990, Government considered adding the group to the Third Schedule of the Act, the document says.

"But at the time it was felt that as none of the companies was required by existing legislation to be licensed, such an inclusion would be viewed as an inappropriate and an undeserved `seal of approval'.'' The recommendation was being made again. The Attorney General had been consulted and "has no legal objections,'' the memorandum says.

"If it is found by the Authority that the operations of the group are not being conducted in a prudent manner it will be open to the Minister of Finance to appoint an inspector under ... Section 110 of the Companies Act 1981.