Bermuda has ?nothing to be ashamed of? in the operations of a sham company used by the Republic of Congo to dupe creditors and would the Island will ?plug the holes? in our laws to prevent a similar situation developing again, Finance Minister Paula Cox declared yesterday.

And Ms Cox confirmed Sphynx (Bermuda) Ltd.?s operations to mask the movement of hundreds of millions of dollars in oil revenue ? are being investigated by regulators.

The Mid-Ocean News reported last week that a judgment announced by the UK?s High Court of Justice found that at least $472 million had passed through Sphynx (Bermuda) Ltd.

Former directors of the company told the newspaper they were unaware of alleged bogus trades, and said they had done nothing wrong.

Ms Cox is confident the Island?s high standards will insulate it from reproach in the Sphynx probe and the investigation of hedge fund IPOC International Growth Fund, set up here five years ago by a convicted fraudster.

IPOC International Growth Fund is the subject of a money laundering and corruption investigation, involving the Russian IT and Communications Minister, Leonid Reiman.

The Wall Street Journal alleged last month that the fund was effectively a holding company for around $1 billion in telecommunications assets transferred through a network of shell companies.

?I think that whenever we have some issues that cause a question to be raised about reputation, I think it can certainly cause collateral damage,? Ms Cox told .

?That?s why we have redoubled our efforts both within the Ministry of Finance and the (financial) regulator to make sure where we can, plug the holes in our legislative framework.?

The Minister conceded that even if anything has not been done to make a Bermuda entity directly culpable, damage can be harmful to the Island?s name and brand and causes her concern.

She said where the Government sees gaps in the legislation it will try and mitigate the damage quickly and will have to go out in the marketplace to reassure people about Bermuda?s reputation.

The Chairman of the Bermuda Monetary Authority is at the BIBA (Bermuda International Business Association) London briefing and has not been able to respond to the allegations.

?Certainly people have done due diligence and vetting. Right now we are in a very competitive environment and every little thing can be seized on because I think in some areas we are seen to be taking business from some other jurisdictions.?

?It makes our job collectively that much harder because you have to rebut what may be a stereotype. People who are un-informed call Bermuda a tax haven. We are not.?

?They mix us up with other jurisdictions but every time you hear this you have to find a way to rebut it and sometimes you are able to deal with it over the medium and long term by the relationships that are built. But sometimes we deal with it by dealing with gaps in our legislation.?

The Minister said it is necessary to comply with the requirements placed on Bermuda by external agencies.

?I think we have nothing to be ashamed of ? but it does require that we continue to be vigilant and raise the bar because if you are perceived as not quite up the mark, it damages you. Bermuda is seen as a jurisdiction with cachet and has a premier reputation.?

A statement from the Ministry of Finance this week said: ?The Registrar of Companies advises that matters related to Sphynx (Bermuda) Ltd. are under active review.?

The statement explained Bermuda took any improper business conduct seriously and the ?necessary action? had been taken under the Companies Act 1981.

It continued: ?The Registrar of Companies stated that 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.

?Furthermore, the Companies Act legislates rules and regulations for proper corporate governance, similar to those adopted by other jurisdictions.?