EU clampdown on offshore business interests

The European Commission wants to force EU companies to disclose fully all offshore business interests as part of its tightened grip on Europe's auditor industry.

Faced with industry leaders' failure to "stand up and take charge" over Europe's accounting scandals, Internal Market Commissioner Frits Bolkestein said on Wednesday the EU is prepared to take serious steps to stamp out fraud.

The commission has already announced changes to EU accounting practices as part of Europe's 'company directive'.

But following the scandal at Italian dairy giant Parmalat the Dutchman told MEPs the commission could adopt three other proposals as early as this year.

These would involve the full disclosure in company accounts of offshore business interests known as 'Special Purpose Vehicles'.

Companies would have to explain their need for the SPV and the commission would tighten auditor control on its content, Bolkestein said.

Parmalat falsely claimed around €4 billion was held through an SPV registered in the Cayman Islands.

The proposals will also examine the role of non-executive directors and the responsibility that all directors hold for company accounts.

And the internal market chief blasted the financial services industry for failing to impose self-regulation and boost investor confidence.

"We need some real industry leadership to..clear out the crooks, expose their unscrupulous practices and curb excessive greed," he urged.

"If industry leaders are not prepared to do this then regulators will have to do much more than perhaps they or we would like. If that is the result, then industry leaders can't winge about regulation from Brussels", the Dutchman went on.

"They will have brought it upon themselves."

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