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company5 pursuant to the laws of the Cayman Islands. To maintain
its registration as an exempted company in the Cayman Islands,
LTD submitted on March 4, 1983, November 21, 1983, December 5,
1984, February 18, 1988, November 29, 1988, and December 8, 1989,
an "Annual Return and Declaration" stating, inter alia, that its
operations since its last return have been mainly outside the
Cayman Islands.
LTD was a "sister company" of InverMexico; i.e., LTD and
InverMexico were owned by the same persons or entities. During
the years in issue, no client of LTD was a citizen or resident of
the United States.
The principals of InverMexico managed a diverse group of
financial services companies in the name of InverMexico and other
entities; such companies were called "Grupo Inver", or the "Inver
Group". During the late 1970's and early 1980's, in the face of
Mexico's declining oil revenues, the massive devaluation of the
peso, and a growing sense of political instability, wealthy
Mexicans increasingly sought opportunities outside Mexico's
borders for investments that were considered safer than domestic
investment opportunities. In response to such "capital flight",
during those years the Mexican Government placed increasing
5
An "exempted company" is one the operation of which is
conducted mainly outside the Cayman Islands. Secs. 179, 181, The
Companies Law of the Cayman Islands.
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