The following statement has been issued by the Cayman Islands' Executive Council and the Monetary Authority:

"Over the past several weeks the Executive Council and the Cayman Islands Monetary Authority have worked to find a solution to the problems of First Cayman Bank which would allow the bank to continue operating. This action was taken as Executive Council and the Monetary Authority realised that a closure would damage depositors and other affected.

"The local deposits of First Cayman Bank total CI$6.2 million.

"A licensed bank undertook a check of the accounts of First Cayman Bank, with a view to purchasing it and to continuing its operations. However, those checks revealed that First Cayman Bank had been implicated in a fraudulent scheme which cannot be quantified at this time.

"On Friday, 10 October, 1997, that licensed bank notified Executive Council and the Monetary Authority that they were withdrawing from the purchase.

"On Saturday, 11 October, 1997, Executive Council decided to close First Cayman Bank and Gulf Union Bank for business on Monday, 13 October.

"On Thursday, 16 October, Executive Council considered the reports of the controllers of First Cayman Bank and Gulf Union Bank and all relevant matters, including the serious implications of the fraudulent scheme affecting First Cayman Bank, and decided to revoke the bank licenses of those two banks, and to apply to the Grand Court to appoint liquidators. Deloitte & Touche were duly appointed liquidators on Monday, 20 October."

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