UK tax-haven move could have Irish business implications
Caveat: Tory rebels’ move will force overseas territories to open up shareholder registers
The Cayman Islands’ premier said the UK move to open up company directorship registers in overseas territories smacked of “colonial despotism”. Photograph: David Rogers/Getty Images
This week’s move by the British government to direct its 14 overseas territories, places such as the Cayman Islands and Bermuda, to whip the kimono from their company secrecy regimes will capture the attention of many Irish businesspeople.
Irish businesses from stockbroking firms to nursing homes, from pubs to the company that scans your passport at Dublin airport, are owned by companies registered in tax havens such as the Caymans or the British Virgin Islands (BVI).
But an insurgency by backbench Tory parliamentarians, who lined up to back a cross-party legislative amendment this week, has forced the British government to direct its tax haven territories to publicly list all company ownership by 2020.
The islands, which have based their entire economies around their few-questions-asked business regimes, have predictably gone apoplectic. The Caymans’ premier said the move smacked of “colonial despotism” while BVI says it “calls into question” its constitutional relationship with Britain.
But the die appears cast. No more vesting ownership of assets in faceless entities in faraway tax havens that operate under the British flag.
It is clear, however, that the same politicians who forced Theresa May’s hand this week on the likes of Bermuda also have the crown dependencies in their sights. Andrew Mitchell, a Tory MP and former minister who was previously best known for calling a policeman a “pleb”, is leading the charge. He says he expects the British authorities to force the dependencies to similarly fall into line.
For now, however, it is just the overseas territories that legally must comply. As you would expect, some of our wealthiest citizens do much of their business from such havens.
Dermot Desmond is a particular fan. Daon, the biometric company he founded, and which supplies passport kiosks at Dublin airport, is ultimately owned by a Caymans company. All of its investors will have to be revealed under the proposed laws. He also based his Macro fund from there. Maxillian, a Caymans entity, invested in footballer Niall Quinn’s ill-fated Q-Sat business. Desmond helped Quinn raise cash.
Establishment financial firm Goodbody stockbrokers is owned by BVI entity Ganmac Holdings. This is, presumably, controlled by Goodbody’s parent group, Fexco. But if there are any unknown unknowns to its ownership, they will soon be revealed.
Merrion Capital, which is being bought by Cantor Fitzgerald, is currently co-owned by a Bermudan outfit, Somers. There is currently no information publicly available about who owns Somers. Whoever they are, there is a cheque in the post.
Control of Mowlam Healthcare, one of the State’s largest nursing home groups, is vested in a PO Box on Tortola in the BVI. Its neighbour on the island is a PO Box, which is registered to the company that controls Brindley Healthcare, which owns a chain of competing nursing homes in the Irish northwest.
Ultimate control of the Viridian group that controls electricity provider Energia is vested on Grand Cayman. So is the airline CityJet.
Even the old Anchor Bar in Graiguenamanagh in Kilkenny, which was seized from a former Bank of Ireland official at the outset of the financial crisis a decade ago, was once controlled from BVI.
The control of many BVI and Cayman entities which own Irish enterprises can often be inferred on the basis of the identity of the directors of the Irish companies. But the ownership can never really be proven. Under the British government’s proposed changes, all of the companies above will have to reveal all shareholders.
However, the Isle of Man is still by far the favourite destination for Irish business people who want to keep their affairs away from prying eyes. And, as a crown dependency, it is unaffected by the changes.
Mitchell, however, said this week that his band of rebels “expect the [British] government to use its good offices to persuade the crown dependencies to introduce public ownership registers . . . But if they do not, parliament will return to the charge.”
If the Manx island, as Mitchell threatens, is forced to unveil company ownership, then large swathes of corporate Ireland will sit up and take notice.
The Irish businessperson most closely associated with the island’s closed-doors regime is Denis O’Brien.
Blaydon, the Manx company that the Office of the Director of Corporate Enforcement says paid the bill for the suspected data “breach” under investigation at Independent News & Media, is controlled by O’Brien, his associates conceded to the ODCE. His links to Blaydon were first publicly confirmed, however, by The Irish Times as a result of documents uncovered during last year’s massive Paradise Papers leak.
Jarrahdale, a Manx company linked to O’Brien, invested €250,000 in INM director Triona Mullane’s start-up without it being disclosed to INM’s board, in contravention of corporate governance guidelines about director independence. Mullane was subsequently re-designated as non-independent due to her links with O’Brien. But those links emerged in the first place only because this newspaper noticed that Jarrahdale was also an investor in an O’Brien family firm.
Publicly opening up the shareholder registers of Cayman and BVI companies changes the landscape for many Irish businesses. Opening up the Isle of Man would change the whole game.
Cromwell to lead charge on UK banking competition
While we’re focused on the affairs of the British government, this week they also appointed a hereditary peer as the executive chairman of banking competition remedies. The peer will dispense £750 million of Royal Bank of Scotland’s cash to boost its smaller rivals.
His name? Lord Cromwell. Okay, okay, this guy is a Godfrey and not an Oliver. But still, his surname would put the heart across many Irishmen and women, given its associations with the pillaging of the island.
Then again, maybe we could do with a Cromwell-type character to ride into the middle of our own recalcitrant banking sector. Old Ironsides would soon sort the tracker mortgage scandal.
The news that the Supreme Court has decided to hear an appeal over Apple’s shelved €850 million data centre in Athenry went down like a lead balloon in the east Galway town.
“A complete and utter disaster,” according to prominent local pro-data centre campaigner, Paul Keane. Sara Walls, another pro-data centre campaigner, told Keane’s Facebook group she was “screaming inside”.
Apple has clearly long since written off its hopes of building in Athenry, where the project has been held up by two local objectors on environmental grounds. It is investing heavily in Denmark instead.
The Athenry objectors lost at county council level. They lost at An Bórd Pleanála. They lost in the High Court. The Supreme Court has yet to hear their case, so that could go either way. But if they lose there too, they will likely still have a further potential blocking route in the European courts.
What a mad system we have for approving large-scale investment projects by mobile multinationals. Efficiency and fairness, how are ya?