A worldwide
research effort in collaboration with the Guardian/ICIJ reveals the real people
behind these anonymous companies
James Ball
travels to the tiny Caribbean island of Nevis searching for Sarah Petre-Mears,
who on paper controls more than 1,200 companies scattered around the Caribbean,
the
The
existence of an extraordinary global network of sham company directors, most of
them British, can be revealed.
 |
| Offshore Secrets |
More than
21,500 companies have been identified using this group of 28 so-called nominee
directors. The nominees play a key role in keeping secret hundreds of thousands
of commercial transactions. They do so by selling their names for use on
official company documents, using addresses in obscure locations all over the
world.
This is not
illegal under UK law, and sometimes nominee directors have a legitimate role.
But our evidence suggests this particular group of directors only pretend to
control the companies they put their names to.
The
companies themselves are often registered anonymously offshore in the British
Virgin Islands (BVI), but also in Ireland, New Zealand, Belize and the UK
itself. More than a score of UK agencies sell offshore companies, several of
which also help supply sham directors.
One British
couple, Sarah and Edward Petre-Mears, who migrated from Sark in the Channel
Islands to the Caribbean island of Nevis, have sold their services to more than
2,000 entities, with their names appearing on activities ranging from Russian
luxury property purchases to pornography and casino sites.
In 1999,
the government claimed Britain's sham director industry had been
"effectively outlawed" after a judge, Mr Justice Blackburne, said the
court would not tolerate "the situation where someone takes on the
directorship of so many companies and then totally abrogates
responsibility". But our findings show this has failed to be policed.
These
nominee fronts conceal a wide variety of real owners, including those that are
perfectly legal, from Russian oligarchs to discreet speculators in the British
property market. Their only common factor is the wish for secrecy. Some of the
owners we have identified include:
• Vladimir
Antonov, the London-based billionaire Russian purchaser of Portsmouth FC, who
is currently fighting an extradition request from Lithuania, where he
controlled a bank. He denies wrongdoing.
• Yair
Spitzer, a north London software engineer who bought and sold London flats. He
said: "We were advised by UK accountants that this structure … was
perfectly legal."
• The
Hackmeys, a wealthy Israeli family, one of whom used a BVI company to buy a
£26m London office block. Their spokesman said: "The deal was introduced
by a [confidential] joint venture partner who set up the deal and
structure."
• Nicholas
Joannou, whose Armstrong Group sold shares from an address in Berkeley Square,
central London. The Guardian was unable to contact him.
• SP
Trading, which was linked in 2009 to a Kazakh businessman and an arms to Iran
scandal. The nominee directors in Vanuatu turned out to have no knowledge of
the company's true activities. They told us there were "very few cases of
misuse by clients".
In a
parallel investigation Monday's Panorama on BBC1 is due to show a company
formation agent offering to assist its undercover reporter to escape tax. The
agent, James Turner, of Turner Little in York, offers nominee directors in
Belize and says: "They won't even know that they were a director, they
just get paid."
A
representative of a second company, Atlas Corporate Services, is asked for
maximum confidentiality. He explains that many of its nominees are not even
aware of how their names are being used. Jesse Hester, who runs Atlas Corporate
Services from Mauritius, is seen assuring a potential client that the UK is
unlikely to catch up with him. "Tax authorities don't have the resources
to chase everybody down … They reckon it's probably the same rough odds as
probably winning the lottery," he says.
The
revelations launch a week-long series onthe Guardian site designed to strip
away anonymity from offshore companies, the most shadowy aspect of the UK's
financial industry. The British Virgin Islands are a particularly successful
hideaway, thanks to the exceptional secrecy on offer. This Caribbean territory,
which is ultimately controlled by the UK, has sold more than a million
anonymously-owned offshore entities since launching itself in 1984 as a tax haven.
The
purchasers are often people who, for a variety of reasons, some perfectly
legitimate, do not wish to advertise what they are doing with their wealth.
But a
worldwide research effort has been launched this year by the ICIJ. It aims to
identify, country by country, thousands of the true owners.
The
Guardian has collaborated with the ICIJ, a non-profit organisation, to analyse
many gigabytes of the British data. This week we intend to reveal the names of
more owners. We do not suggest criminal wrongdoing by them. Among those we have
contacted, not all go so far as to employ nominee directors. Some insist they
have done nothing improper, and are merely taking advantage of legitimate tax
breaks or the opportunity for privacy. Critics say, however, that the islands'
system can be open to abuse because of its lack of transparency.
Gerard
Ryle, the director of the ICIJ, said: "We are applying specialist software
to crunch through literally hundreds of thousands of offshore entities to look
for patterns. We are marrying our findings with old-fashioned shoe leather and
interviews from key insiders who can provide further context on this little
known and loosely regulated world. We are satisfied that the information we
have is authentic."
Ryle
believes the ICIJ's global project, when it is completed next year, will haul
into the open a shadowy financial system estimated to conceal the movement
around the world of trillions of dollars.
Offshore
secrets
Guardian
team: David Leigh, Harold Frayman and James Ball.
The project
is a collaboration between the Guardian and the International Consortium of
Investigative Journalists (ICIJ) headed by Gerald Ryle in Washington DC.
Guardian investigations editor David Leigh is a member of ICIJ, a global
network of reporters in more than 60 countries who collaborate on in-depth
investigative stories that cross national boundaries. The ICIJ was founded in
1997 as a project of the Center for Public Integrity, a Washington DC-based
non-profit.
