Tax Dodging / Avoidance / Offshore / Dodgy Schemes / Players

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Another one from The Eye ... a real beauty ... a cast of many with whistle stop tours of some " Interesting " destinations :

Big fortunes and the Big 4.


FEW NAMES crop up quite as frequently in the Paradise Papers as those of the world’s major accountancy firms. Often they appear in connection with tax avoidances schemes devised some time after famous scandals like those of Vodafone, Starbucks and “LuxLeaks” might have been expected to change their behaviour. Analysis by the Eye suggests the “Big 4” – EY, PwC, KPMG and Deloitte – held hundreds of business relationships with clients of law firm Appleby in the years up to 2015.

Behind most of the reported VAT avoidance schemes run out of the Isle of Man, including Lewis Hamilton’s, was EY, formerly known as Ernst & Young. It wasn’t too fussy about who it chose to help dodge tax, either. The first of what were then the “Big Five” beancounting outfits into Moscow after the fall of the Soviet Union, EY is still evidently doing sterling work keeping the oligarchs happy.

When Vladimir Putin’s ally, the shopping centre tycoon God Nisanov, sought to acquire an Airbus A318 jet through an Isle of Man company owned by his associates, internal Appleby emails revealed “EY Moscow as the introducing party” and explained the source of Nisanov’s fortunes. “Given the family connection to God Nisanov,” the lawyers duly noted, “…it is evident that this is the source of wealth for the purchase of the aircraft.” EY duly saved the oligarch millions in VAT.

Money-laundering vehicle of choice

One presentation prepared by EY for a wealthy VAT dodger in October 2015 explained how the scheme could work. The buyer would acquire the jet through an Irish company that would provide “passenger transport services” to other companies owned by the same people, creating a commercial veneer that would allow for zero VAT. All was helpfully explained on slides under EY’s strapline “building a better working world”. How avoiding tax helps to do this was not explained.

EY was also behind a scheme through which another wealthy Russian who made his money in the railway business, Yury Korotchenko, tax-efficiently bought a £13.5m G200 Gulfstream in 2012. Although there is no evidence the accountants knew of the source of Korotchenko’s funds, Appleby emails reveal the money emerged from an account at a Latvian bank held by a British “limited liability partnership”, Intertrade Continental LLP – the same kind of set-up previously exposed by the Eye as the money-laundering vehicle of choice.

At the time of the jet purchase, Intertrade Continental LLP filed accounts saying it was a “trade agent for industrial equipment” earning commission of £4,600 a year. It was owned by two Seychelles companies, Monohold AG and Intrahold AG, whose names will be familiar to Eye readers. They are straight out of the International Overseas Services network exposed in the Eye’s Where There’s Muck There’s Brass Plates special report in May 2013. Together, they jointly own around 600 further LLPs.

There was also plenty of work with Appleby clients for the world’s largest accountancy firm and engine of the “LuxLeaks” tax avoidance factory, PricewaterhouseCoopers. The firm could also be found advising wealthy private jet tax dodgers. “Appleby are good friends of ours,” wrote one of PwC’s Isle of Man tax directors to a colleague in PwC Moscow’s “private wealth services” division in 2013, after the latter had approached the lawyers with “several potential clients, who consider using IoM for their aircraft structures”.

‘A lively biography’

One PwC client was oligarch turned MP Vitaly Malkin. “Also sometimes we ask PWC for their professional tax advisers,” came the reply of the oligarch’s lackey to Appleby’s request for details of Malkin’s money. After some digging, Appleby hit on a snag: “Like many Russian billionaires,” reads an internal email, “Mr Malkin has a lively biography” including, according to Malkin’s client file, “close connections to the Kremlin… alleged involvement in criminal activities [and] misappropriate allocation of funds”.

This stark assessment was based on Canadian federal court documents stating how, during the fall of Soviet communism, Malkin was alleged to have siphoned $48m from a debt-reduction deal with Angola, while a visa officer told the court how Malkin “had used profits from organised crime to subvert the democratic process in Russia” in a bid to swing the elections in favour of Boris Yeltsin. When Appleby raised these “minor points” with Malkin’s representative, she dismissed them as “mean comments” unworthy of attention. They certainly didn’t phase PwC.

As LuxLeaks showed, however, PwC’s real specialism is in the huge corporate tax scheme. No part of the world is too poor to be exploited by their tax planners. So when India’s GMR Group bought half of a Dutch power company in 2010, it did so on the strength of PwC’s tax advice, said Appleby, “via a Maltese company wholly owned by an IoM company, in turn wholly owned by a Mauritus [sic] company which is owned by the Indian company”. When the interest was later sold, the gain will have escaped the clutches of the Indian taxman.

Closer to home, PwC used a similarly huge “tax structure”, involving half a dozen Luxembourg companies, for the Blackstone private equity group’s £300m re-financing of its investment in the Chiswick Park office complex in 2013. All this from the firm whose head UK tax partner, Kevin Nicholson, told parliament in 2013: “We are not in the business of selling schemes.”

Offshore trebles all round

Deloitte, meanwhile, could be found advising multinationals including Holidaybreak and engineering group Amec Foster Wheeler on rearranging their finances offshore to take advantage of tax law changes in 2012 that they had loudly cheer-led. “We do have a good news story now,” Deloitte’s senior tax partner, Bill Dodwell, said at the time. “We can indeed compete with the Netherlands, Luxembourg and Switzerland.” As the Paradise Papers show, it is indeed now offshore trebles all round.

In an “asset and wealth management” report for its rich clients last month, PwC speculated that: “Being viewed as not paying a fair share of tax or using questionable tax havens will [soon] be unacceptable.” But there is little sign that the Big 4 beancounters are about to walk away from them and the fat fees they pay. Just how fat was revealed in a proposal for advice from PwC’s London office to Allied Irish Bank in 2013: “Our hourly charge-out rates are as follows: partner – £650; director – £570; senior manager – £440; manager – £370; senior associate – £310; associate – £110”. As it is the same top beancounters to whom governments turn to for advice on handling tax havens, they’ll be playing the great offshore game for some time yet.

Private Eye had access to the 13 million documents of the Paradise Papers, obtained by Germany’s Süddeutsche Zeitung and turned into a worldwide exposé by the International Consortium of Investigative Journalists

Follow that one ?

I will ... just give me a little time ... plenty of likely sources ?

Occasionly , a picture is all that's needed ?

Paradise papers !
Another one with a slightly different flavour ... the rape of the remanants of Briitish Steel : ... Steel.html

Monarch owner now making millions from British Steel: Tycoons charging sky high interest for loans to Scunthorpe plant

The former owners of failed Monarch Airlines are set to extract millions from British Steel after loading it with debt, accounts reveal.

Brothers Marc and Nathaniel Meyohas and business partners Richard Perlhagen and Daniel Goldstein are charging interest of 9.6 per cent on a £154million loan.

Their private equity firm Greybull Capital snapped up British Steel, which employs 4,400 people in the UK, largely in Scunthorpe, for a nominal £1 to stop it going under in 2016.

Employees took a pay cut to try to turn around the firm.

But the French brothers are now set to rake in cash from the loan pumped in via a company in tax-haven Jersey as part of a £400million rescue package.

They have already charged fees of £3million, and accounts reveal that a further £16million in interest was due last year.

It comes as Greybull is under fire for its ownership of collapsed airline Monarch.

Nearly 1,900 workers were made redundant when Monarch went bust in October, forcing authorities to step in and help more than 100,000 holidaymakers get home.

Greybull is believed to have reduced its exposure to losses through a complex deal with financing from airplane maker Boeing, and the private equity firm will get first say on any of the travel operator's assets.

FRENCH-born brothers Nathaniel Meyohas, 46, and Marc Meyohas, 43 (pictured), are part of a wealthy French family and made their fortune from investments in private equity.

They set up Greybull Capital in 2010 but have had a series of failures. Before Monarch, which collapsed in October, Rileys Sports Bars fell into administration in September 2014.

My Local convenience store chain collapsed last year and, most famously, Greybull had a role in the collapse of electronics retailer Comet, which left the taxpayer with a £23m bill.

Meanwhile, Monarch customers and business partners are expected to lose out from the demise.

Last night, Greybull defended its loan to British Steel. It said: 'Greybull's investment structure is market standard and in line with the way many financial institutions provide capital to higher risk companies in the midst of a turnaround.'

Greybull has not yet received any interest payments, as it has let British Steel defer them until it makes more money. The total debt has climbed to £167million.

Greybull created British Steel out of Tata Steel's long products division, which it bought just as it was almost wiped out by a major downturn in the industry.

Tata has since sold further assets and closed its heavily indebted inherited pension scheme, threatening workers' pensions and triggering a frenzy among financial advisers.

Greybull then rebranded the division as British Steel and staff agreed a 3 per cent salary cut.

British Steel has returned to profit for the first time since the industry collapsed, making £39million last year compared to a £65million loss the year before, on revenue of more than £1billion.

Chairman Roland Junck, 62, said he was targeting around 10pc profit. Staff have been rewarded with a 5pc stake in the business.

Greybull said: 'We are delighted with the progress that British Steel has made since mid-2016.

'We are proud that the employees will share in the success of British Steel through the profit and share ownership schemes that we have put in place.' British Steel said: 'We have had nothing but strong support and help from Greybull since they rescued the business.'

In the annual accounts yesterday, British Steel directors said: 'We have made great progress under our new ownership.

Oh dear , one of the oldest tricks in the book when looking at company recoveries with outside venture capital.

Buy for a nominal amount ... cut costs and get the remaining workforce on board ... then loan said company monies at a premium rate.

If said company cannot meet the interest payments , look to recover said loan monies by selling off the assets ( As a debenture holder or secured by a floating charge ) ... leaving a carcass devoid of even the bones.

Deficit in the pension fund ?

Not a problem ... the Governmnet will step in ... as for the workers pensions ... a large hair cut !!!

The maths involved mirror what we are seeing in the care homes debacle.

Nothing ever changes ?
Slimy Bar stewards the lot of them.