NEWS
05/11/2017 20:28 GMT | Updated 06/11/2017 16:04 GMT

Paradise Papers: 7 Extraordinary Revelations From Massive Tax Haven Leak

The Queen and Bono caught up over offshore investments.

The Queen’s private estate invested in controversial retailer BrightHouse as part of £10m sunk into offshore funds that have never before been disclosed, it has been claimed.

Millions of documents have been leaked as part of the so-called Paradise Papers that reveal how the powerful and wealthy have secretly invested vast sums in offshore tax havens.

The most eye-catching is the claim the Queen, through her Duchy of Lancaster private estate, has invested in an array of businesses, including the Britain’s biggest rent-to-own retailer that was recently forced to compensate nearly 250,000 customers for its exploitative behaviour.

Around 13.4 million files are said to have been disclosed, which come one year after the disclosure of the Panama Papers sent shockwaves through the world of business.

The Panama Papers caused a significant international fall-out when they were released in April 2016, even leading to the resignation of Iceland’s prime minister amid protests and the surrounding controversy. 

Two offshore service providers are said to be the source of the material, along with the company registries of 19 tax havens.

Millions of the files come from a single company, Appleby, which offers offshore legal services. Appleby has denied any wrongdoing in relation to the findings from the documents.

Here are some of the most startling revelations from 100 media groups investigating the papers, including the BBC and The Guardian.

1. The Queen’s private estate secretly invest vast amounts.

The Queen’s private estate has been found to have millions of pounds invested in offshore tax havens, according to reports.

It is alleged that the Duchy of Lancaster, which handles the Queen’s investments, has held funds in the Cayman Islands and Bermuda.

Around £10m of the Queen’s private cash is said to have been tied up in offshore portfolios, the BBC reports.

There is nothing to suggest that any investments are illegal, the broadcaster added.

Among the investments is in retailer BrightHouse, which has been accused of exploiting the poor by overcharging customers and using hard sell tactics on the vulnerable.

It was last month ordered to pay £14.8m in compensation to 249,000 customers. 

Hannah Mckay / Reuters

In 2007, the US company running one investment fund asked the Duchy to contribute $450,000 to five projects, including an interest in London-based private equity firm that acquired 100% of BrightHouse and 75% of the owners of Threshers off licence chain.

The Duchy said the BrightHouse holding is now just £3,208 and it was not involved in fund investment decisions, but could not disclose the size of its original investment.

The chief finance officer of the £500m estate, Chris Adcock, told the BBC: “Our investment strategy is based on advice and recommendation from our investment consultants and appropriate asset allocation...

“The Duchy has only invested in highly regarded private equity funds following a strong recommendation from our investment consultants.”

A spokesperson for the Duchy of Lancaster added: “We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate.

“The Queen voluntarily pays tax on any income she receives from the Duchy.”

FULL STORY HERE.

2. Donald Trump’s commerce secretary is shown to have a stake in a firm dealing with Russians sanctioned by the US.

Donald Trump’s Commerce Secretary has significant business links with Russian allies of Vladimir Putin.

Wilbur Ross has a stake in Navigator Holdings, which transports oil and gas for Russian energy firm, Sibur.

The company makes millions every year and two major shareholders are under US sanctions.

Another shareholder is Kirill Shamalov, the son-in-law of the Russian President. 

During his confirmation hearing in January, Ross testified he had cut all business ties that could present a conflict of interest.

A spokesperson for Ross told the BBC’s Panorama: “Secretary Ross recuses himself from any matters focused on transoceanic shipping vessels.

They added the Secretary “works closely with Commerce Department ethics officials to ensure the highest ethical standards”.

FULL STORY HERE.

3. Tory donor Lord Ashcroft ‘ignored rules around the management of his offshore investments’.

The peer is alleged to have given assets worth hundreds of millions of dollars to the Punta Gorda Trust in Bermuda in 2000, but the Paradise Papers suggests he sometimes made decisions without consulting trust officials.

The BBC suggests such action could see the trust challenged by HM Revenue and Customs.

Lord Ashcroft, 71, said he would not respond because of the way he has been treated by BBC Panorama in the past.

He took to Twitter after the revelations were made to say ‘dear dear dear’.

FULL STORY HERE.

4. Bono ‘used Malta-based firm to buy Lithuanian shopping centre’.

In one of the more unusual revelations, the U2 frontman is claimed to have used a company in Malta to to purchase a share of a shopping centre in Lithuania.

The Aušra mall opened in 2007 and was soon bought by a firm called Nude Estates of which the singer is an investor.

Bono’s spokeswoman told the Guardian: “Bono was a passive, minority investor in Nude Estates Malta Ltd, a company that was legally registered in Malta until it was voluntarily wound up in 2015. Malta is a well-established holding company jurisdiction within the EU.”

FULL STORY HERE.

5. Offshore webs used by billionaires to buy Everton and Arsenal football club.

The Paradise Paper revelations also extend, perhaps unsurprisingly, into the multi-billion world of Premiership football.

The firm at the centre of the leak, Appleby, is said to have overseen the acquisition of a major stake in the Liverpool-based Premier League club Everton for Farhad Moshiri and a 30 percent stake in Arsenal for Uzbek-Russian oligarch, Alisher Usmanov.

Whilst this in itself is not unusual, the newly released files show a long-running and close business relationship between the two men raising questions as to whether the two clubs can function and rival each other independently on the pitch.

The financial waters are further muddied by a multi-million pound “gift” from Usmanov to Moshiri.

FULL STORY HERE.

6. Justin Trudeau aide may have ‘cost Canada tax dollars’.  

An investigation by Canadian broadcaster, CBC, and the International Consortium of Investigative Journalists (ICIJ) alleges that an adviser to the Canadian Prime Minister moved millions of dollars to offshore havens. 

The Paradise Papers suggest the family investment business of Stephen Bronfman, chief fundraiser for Trudeau’s Liberal Party, engaged in a complex web of investments in the US, Israel and the Cayman Islands that may have cost the country millions of dollars in taxes.

Lawyers said no deals had tried to evade tax and all were legal.

FULL STORY HERE

7. Jared Kushner keeps failing to disclose connections with Russians.

Jared Kushner, President Donald Trump’s son-in-law and senior adviser, allegedly failed to disclose business ties to a Russian oligarch whose deep pockets helped Russian government institutions invest in Facebook and Twitter.

A Kremlin-backed bank and the financial arm of the state-owned oil and gas company Gazprom made large investments in the social media companies through Yuri Milner, a Russian technology magnate, the Guardian reported.

The state-owned financial institutions which Milner assisted are often used for “pet political projects” of Russian President Vladimir Putin, Alexander Vershbow, former U.S. ambassador to Russia, it was reported.

FULL STORY HERE