A year after the government forced companies to identify their ultimate beneficial owners, following revelations by the Eye and others of shell companies’ role in fraud and money laundering, it is clear that British shell companies remain popular among the world’s better connected wealthy elite.

The Eye compared names and dates of birth on Companies House filings of so-called “persons with significant control” with those on databases of PEPs produced by Thomson Reuters and transparency campaign group mySociety. We found more than 40 well-connected individuals with little apparent reason for a shell company other than to conceal assets. But only just over half the PEPs give birth date information and can therefore be matched, implying a total almost double this number. Even this is likely to be the tip of the iceberg. As Eye 1442 reported in April, internal Companies House documents revealed that another 3,000 companies that should have declared who controlled them simply gave tax haven companies, “which is not allowed under the statute”.

Tax have atoll
Nor is precise identification of PEPs helped by a decision in 2015 by the then minister responsible for Companies House, former Tesco director Baroness (Lucy) Neville-Rolfe, that the official register would no longer disclose exact birth dates, just the month and year. Ironically, the change was presented as a crime prevention move to make identity theft harder. Occasionally, the identities of the shell company owners do become certain through other sources.

Georgian MP Gela Mikadze, for example, is a member of the pro-Russian opposition party the Alliance of Patriots, and also the ultimate beneficial owner of Bestfort Development LLP, a limited liability partnership which he controls via two corporate directors – Pintox Systems Ltd and Systen Group Ltd – both registered on the tax haven atoll of the Marshall Islands. Back in 2013, the Eye exposed how this set-up had become the vehicle of choice for big-time money launderers.

In 2015, Bestfort and 13 other UK-registered LLPs were sued in the high court in London over claims that they were involved in embezzling $42m from Rakia, the sovereign wealth fund Ras al-Khaimah, one of the United Arab Emirates.

Rakia claimed that Mikadze had diverted funds meant for lucrative contracts in the former Soviet state and funnelled the ill-gotten gains into bank accounts in Latvia belonging to the LLPs. The judge on the case refused to freeze the assets of the LLPs, however, due to insufficient evidence that they had any. Nevertheless, Mikadze pleaded guilty to the theft of shares by authorities in Georgia, although he now says his prosecution was politically motivated and is appealing to the European Court of Human Rights. Mikadze remains wanted in Ras al-Khaimah after a court last month sentenced him to 15 years in prison and ordered him to repay $12.8m.

Corruption-soaked regime
Other PEPs enjoying the UK’s accommodating corporate system include Theophilus Danjuma, a multi-millionaire former Nigerian defence minister. He is the ultimate beneficial owner, via British Virgin Islands company Ottis Group Holdings Ltd, of Ottis (UK) Ltd. The company was set up the year after Danjuma was appointed chairman of the presidential advisory council in Goodluck Jonathan’s corruption-soaked regime with a view to “buying and selling of own real estate”.

Then there is Behgjet Pacolli, the billionaire former deputy prime minister of Kosovo, who is the ultimate beneficial owner of MAB Engineering Ltd, which has sat apparently inactive on the company register for seven years. Pacolli won a series of lucrative construction contracts in Russia and the former Yugoslavia, shaking off a raft of anti-corruption probes in the process, through his Swiss-based conglomerate, Mabetex.

Aburizal Bakrie, the Indonesian politician and chairman of the Golkar party that ruled the country in coalition until 2014, is the ultimate beneficial owner of Stepscale Ltd. The company, which is registered to an address in Milton Keynes, owns a property in Monaco.

While increased transparency over shell company ownership is welcome, what the Eye’s analysis also suggests is that more PEPs are likely to be using offshore tax havens for their shell companies. Many of the major tax havens, such as the British Virgin Islands and the Cayman Islands, are British overseas territories, which the UK government has consistently refused to force to open up.

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