Two United States companies voted yesterday to reincorporate in Bermuda, Cooper Industries and Leucadia National, in moves that are likely to continue to stoke the anti-Bermuda fire currently burning in the States.

US companies have been flocking to the Island in a bid to cut their tax bills, despite controversy in the United States about such decisions and vows by lawmakers to stop the flow by passing laws in Congress.

The shareholder approval by the two companies comes after the controversy sparked by toolmakers Stanley Works shareholders voting to move to Bermuda - a move which will be contested in the US courts and has forced the company to say it will hold a second shareholder vote on the move.

And by the end of the month Weatherford International Inc are expected to vote on whether the company is to reincorporate in Bermuda to avoid a take-over and to save money on its taxes.

Toolmakers Stanley Works, whose move to Bermuda would save them $30 million in US taxes, has incurred the wrath of Congress by making no bones about the reasons for its move.

Other companies to fuel Congress' wrath by daring to move to Bermuda include Ingersoll-Rand, Foster Wheeler and Nabors Industries.

Patriot tax legislation in the US - which could adversely affect companies that reincorporate in Bermuda - may have a chance of being passed in to law according to a recent New York Times report.

The US currently taxes on foreign-sourced income, which can be avoided by reincorporating almost anywhere apart from Australia. The two are part of just a handful of countries in the world that tax in this way. US companies argue that the tax makes them uncompetitive globally.

Cooper Industries, which is listed on the New York Stock Exchange under the ticker symbol CBE, closed 2001 with revenues of $4.2 billion and is a worldwide manufacturer of electrical products, tools and hardware.

The company yesterday announced that its shareholders had overwhelmingly approved a corporate restructuring that will result in Cooper Industries changing its place of incorporation from Ohio to Bermuda.

In a release it said that of the 93,009,285 shares outstanding and entitled to vote at yesterday's special meeting of shareholders, 68.3 percent voted in favour of the proposal, well above the majority vote required by Ohio law.

And it added that of the 69,941,079 shares voted at the meeting, 90.8 percent voted in favour of the proposal.

As a result of the vote, Cooper Industries, will become the parent holding company of Cooper Industries, Inc.

The company said it expects the reincorporation to be effective as soon as possible following the close of business on May 21, 2002.

Upon completion, the shares of Cooper Industries, Inc. common stock will automatically be converted to shares of Cooper Industries, Ltd. common stock and the new shares will still be listed and traded on the New York Stock Exchange under the ticker symbol CBE. Leucadia National, which is also traded on the New York Stock Exchange under the ticker symbol LUK, also had its shareholders pave the way for the company to reincorporate in Bermuda.

Leucadia was formed in the late 1970s when Chairman Ian Cumming and President Joseph Steinberg took over distressed finance company Talcott National. The New York concern is now involved with a potpourri of businesses, from wineries to real estate to insurance to copper mines.

Leucadia's chief financial officer Joe Orlando said that shareholders approved the proposal to reincorporate at the company's annual meeting in New York yesterday morning, but declined to give preliminary voting results.

Shareholders also backed the Shareholders also backed the company's bid to reduce the number of shares required for approval of the transaction - to a majority from two-thirds of outstanding shares. So it is unclear whether the company reached the higher two- thirds threshold that would have been necessary without the simultaneous charter change. The new, lower, voting threshold will apply to a number of transactions, including mergers and asset sales.

Despite securing shareholder approval, Leucadia said it has no immediate plans to follow through with a proposed reincorporation.

In contrast to the way most companies handle the tax consequences of a reincorporation, Leucadia has in mind a transaction that would result in an immediate tax hit to the company, rather than shareholders. Most companies undertaking the corporate change-of-address will leave shareholders with a capital gains tax, with the idea they will ultimately lower taxes.

For now, Leucadia is holding back because there would be "an unacceptably high" tax cost, according to Securities and Exchange Commission filings, because the transaction would be treated as if the company sold off assets.

Based on the value of its assets in April, when it sent information out to shareholders, a transaction would incur a tax bill of roughly $315 million. Going into the vote, the company already knew it could count on big "yes" vote as the chairman and president own roughly a third of the shares. The approvals are likely to spark more controversy. Stanley Works shareholders on Thursday narrowly approved that company's proposed Bermuda reincorporation, but the New Britain, Connecticut, tool maker has been bogged down in controversy ever since.

After 401(k) participants complained that they received two conflicting sets of voting instructions about how an unreturned proxy would be treated, prompting Connecticut `s attorney general to take the company to court, Stanley decided to scrap the original results and hold another vote.

Bucking the trend of incorporating in Bermuda, Royal Trust (Bermuda) Ltd., is to move operations to Cayman Islands and the Bahamas. The bank is pulling out of Bermuda and will split its business between other offices in the Caymans and the Bahamas, a company spokesman said on Monday.