To this I quote a portion of the Government rules: "Do not encourage or tolerate cheating and abuses of the game rules in your realm. If you learn of any cheating going on, immediately inform us privately or on the mailing list. If you are certain, then have your ruler use the OOC Ban function." As the rulers on the island, the players on the ruler channel have a responsibility to report violations and enforce the rules as well they can. To say that these players, who are already given this responbility, cannot discuss current situations amongst themselves is absurd.
If there was proof and the ruler of Cathay were in a position to do something about it via his OOC banhammer, I could see this. Since neither of these is the case to my knowledge, it is actually rather problematic. It's essentially libel, and could have a real and negative impact on the realm of Toupellon if it unjustly biases Cathay's stance toward them.
