GUERNSEYFINANCE has rejected suggestions that reports of links with questionable arms deals have tainted the island industry’s image. The Guardian said the Serious Fraud Office was investigating allegations that funding for security contracts worth more than £343m. was administered through Investec Trust Guernsey.

Both the bank and the Guernsey Financial Services Commission have refuted the allegations and said the matter was being dealt with appropriately.

GuernseyFinance chief executive Peter Niven said the industry had nothing to hide.

‘Largely, we have a clean book but you can’t say 100% we don’t have any bad apples,’ he said.

‘Occasionally they come out and the important thing is that we deal with them rapidly and effectively and also that we learn from our mistakes. We are transparent.’

The Mail on Sunday reported that Investec Trust Guernsey had processed money for alleged transactions between a Scottish arms dealer, Lightweight Body Armour, and the Kenyan government.

The newspaper said that when the bank became aware of potential arms deals it sought legal advice from Ozannes, which recommended it reported the matter immediately to the authorities.

Mr Niven said it was just another story.

‘Every one like this chips away at the finance industry’s integrity but it doesn’t have a major effect,’ he said.

‘We are doing too much good business for that to be overshadowed by one

isolated incident.

‘If you look to the past, there are similar stories about every jurisdiction. It’s when an industry sweeps things under the table that it starts to look bad.’

An Investec Trust Guernsey spokesman said the company was aware of the matter and was satisfied it had been dealt with appropriately.

GFSC director-general Peter Neville said he took very seriously any evidence that a licensed finance business had been involved, even unwittingly, in untoward activities and would take action if that was the case.

‘What is important in all such matters is to understand fully the circumstances and the facts of the case before taking the appropriate action, if any action is required,’ he said.

‘This process is – quite correctly – one that is not undertaken in public.’