Ms Cox said she was satisfied that vetting and due diligence procedures carried out by regulatory body the Bermuda Monetary Authority had been properly carried out in the case of Sphynx (Bermuda) Ltd.

A case in London's High Court exposed the company's role as one of a chain of companies controlled by Denis Gokana, president of the Republic of Congo's state oil company the SNPC, which, according to the judgment of Mr. Justice Cooke, were used to hide oil assets from creditors.

"While the Ministry does not comment on specific cases, I have no doubt that the vetting in respect of Sphynx (Bermuda) Ltd. was conducted in the usual thorough manner," Ms Cox told the .

"As to what will transpire with respect to this company, the Ministry anticipates having the results of an internal inquiry to hand very shortly and will act on any adverse findings as required by law."

Stephen Lowe, the Registrar of Companies, confirmed that action was being taken by his department in relation to Sphynx.

"Matters related to Sphynx (Bermuda) Ltd. are under active review and Bermuda takes seriously the improper conduct of the company and its impact on Bermuda and necessary action has been taken under the Companies Act 1981," a statement from Mr. Lowe read.

"Issues involving misuse of corporate vehicles are not tolerated. Bermuda, as a responsible international financial centre, has implemented high standards for vetting all corporate incorporations and responds when those standards are not followed.

"The Companies Act 1981 provides powers to the Registrar of Companies to investigate the affairs of a company where there is reasonable cause so to do. The inquiry is conducted confidentially and any adverse findings are acted upon in accordance with the law."

Even though Mr. Gokana is a special adviser to the Republic of Congo ? rated by watchdog Transparency International as a country of "rampant corruption" ? and he was named as Sphynx's principal in incorporation documentation, the company passed the BMA's vetting procedure.

Ms Cox argued that the BMA's due diligence process was sound and she described how it worked.

"The vetting and due diligence process is a rigorous and coherent process that is applied to all incorporations by the BMA," she said.

"You may recall that KPMG considered that the BMA's vetting of proposed beneficial ownership put it at a high level of compliance that substantially exceeded the minimum requirement.

"Let me illustrate, for the benefit of the public. In conducting its due diligence in the matter of company incorporations, the BMA utilises online information sources such as Lexis/Nexis and Dow Jones.

"Assistance is sometimes sought from law enforcement services, overseas regulatory authorities and the Commercial Crime Services of the International Chamber of Commerce.

"The Lexis/Nexis and Dow Jones checks cover all shareholders and beneficial owners notified to the BMA. Other checks are generally made where the initial check highlights an issue of concern or indicates a need for further investigation."

Two local businessman, Trevor Williams and Arthur Jones, both of Consolidated Service Ltd., were hired to act as directors for the company from the time of its incorporation in February 2002 until they resigned in April 2005.

Both denied knowing anything about the $472 million in bogus oil trades that had passed through the company, nor did they even know the location of the company's bank account.

Ms Cox also addressed the question of whether directors should be required to take their responsibilities more seriously. She said it was an issue of corporate governance that was a "burning issue" world-wide.

"That is why we have rules and regulations," Ms Cox added. "My general sense is that Bermuda's rules and regulations work fairly well and I noted a report today that attributed a positive remark about Bermuda's regulatory standards to Lord Levene, the current chairman of Lloyd's of London.

"Let me conclude by saying that not every scandal requires a government or a regulatory response. To do so would be uneconomic because it would require substantially more resources that would add to the cost of doing business.

"As Minister of Finance, I consider it far more preferable and prudent to maintain good regulatory standards that are almost always supported by legitimate businesses, maintain an intelligence system that flags potential problems, assess these problems when flagged and then make a considered response that may, in some cases, lead to the tightening of some of the regulatory regimes."