involved directly in gambling was behind a decision that has halted a controversial Canadian company from moving here.

Involved in a number of lawsuits in Canada and the US, with outstanding allegations of fraud and market manipulation, Gaming Lottery Corporation has now asked shareholders to approve a new proposal to move to the British Virgin Islands (BVI).

The company said the Ministry of Finance had previously approved the firm's application to continue business in Bermuda.

But they were subsequently asked to provide certain undertakings to the Minister which would have severely restricted the company's ability to move on with plans to expand its business activities in the technology and electronic sectors of the gaming industry, the firm said.

The company said that a move to BVI would give it greater flexibility in carrying out its new business direction.

Gaming Lottery said new business direction included actively pursuing opportunities in the technology, electronic and digital sectors of the gaming industry with plans to engage in international gaming operations.

It was that change of emphasis that became a stumbling block to its arrival here.

The Financial Post yesterday quoted a key figure in the plan, Larry Weltman saying: "Bermuda is an anti-gaming country. They were concerned that we would be getting directly into gaming activities with our new products.'' He would not tell the Post what those new products would be.

Finance Minister Grant Gibbons said, "Traditionally, we have avoided exempted companies in the gaming business who are actually involved in running gaming operations. One of the reasons for that is because these companies are difficult to supervise. We don't have the supervisory structure set up for exempted companies in this area.

"And to be perfectly honest, traditionally, we as a country, have not been terribly enamoured with the gaming business.'' Dr. Gibbons said the Mississauga, Ontario-based company was given permission to come to Bermuda under the understanding that it was to be involved in the production of products that could be used in gaming.

"But,'' he said, "there appeared to have been substantial changes in the underlying nature of the business between the time the application was first made and a later point in the review process.

"This is a continuance and permission has to be given in such a move by regulators from the jurisdiction they are leaving. There were delays and controversy in Canada, so work was required between the two regulatory bodies.'' Mr. Weltman is executive vice president of the company, described by the Post as the top deputy to printing entrepreneur and promoter, Moroccan-born Jack Banks, who formed Gaming Lottery and related companies.

Two Mexican investors have claimed in a New York court that they were defrauded after buying $20 million worth of stock in the company and a related concern. They want the deal rescinded, their money back, and an additional $25 million in damages from banks, his companies and others involved, including a blue-chip British bank.

The company's lawyer said the complaint has no merit.