Theresa’s financial husbandry
May channels Miliband, Issue 1429
Declaring that “tax is the price we pay for living in a civilised society”, she reminded companies that “their goods are transported by road, their workers are educated in schools, their customers are part of sophisticated networks taking in the private sector, the public sector and charities”.
All that casts the investment advisory business in which her husband Philip is a top suit, the UK arm of the Capital Group of Companies Inc, in an unflattering light.
US tax haven
Capital International Ltd company has not paid corporation tax since 2009, and in 2011 it received a £1.45m repayment of what it had paid then. The reason is that the fees it receives from its parent company in the US for investment advice have fallen far short of its £50m-per-year costs, even though the funds it manages seem to be doing fairly well.
How the main US fund management company itself is performing is a mystery as, although based in California, it’s registered in the US tax haven of Delaware and doesn’t publish accounts.
Capital International’s latest accounts show it has changed its arrangements with the US parent company, which now pays it a small profit margin (£4.3m last year) on its costs. But with accumulated losses of £26.4m available to set against future taxable profits, it will be a while before the UK company, which employs around 130 people, is paying towards Britain’s schools or roads, etc.
Such sustained losses over so many years when providing services to an overseas parent company would normally be a red flag to a tax official. “If you’re a tax dodger, we’re coming after you,” said Mrs May in her scariest voice. Will Mr May’s company be one of the first in the firing line?
PS: Capital International isn’t entirely with the programme on British workers, either. Plans to make companies list the number of “foreign workers” would reveal that of its six directors three are foreigners. Two, an American and a German, live in the UK.
Wealth warning for the PM’s donors
WHAT will the big money backers of Theresa May’s prime ministerial election campaign make of her new resolve to confront the excesses of capitalism? Would they have got their cheque books out so readily had they known about it?
Among the PM’s pre-election donors was Sir Mick “the miner” Davis, former head of Swiss mining conglomerate Xstrata plc, who gave her campaign £30,000. A longstanding Tory donor, Davis lavished £500,000 on the party just weeks before his company’s controversial merger with Glencore in 2013. Despite strong opposition from shareholders, Davis walked away with £75m from that deal.
The PM-to-be also received £30,000 from Abel Halpern, a senior partner at US private equity firm TPG Capital. The firm operates in the UK as TPG Europe LLP, jointly controlled from the US by Coulco Europe LLC and Bondoco Europe LLC, both incorporated in the tax haven state of Delaware.
Kickbacks to Iraq
A further £15,000 came from Ian Taylor, CEO of Vitol. Back in 2007 the Swiss oil trader pleaded guilty in the US to grand larceny for paying kickbacks to Iraq under the UN’s oil-for-food programme. Vitol was fined $17.5m but avoided sanctions against individual executives. Then there was £15,000 from South African retail tycoon Michael Lewis, whose ample family wealth is managed from the tax haven of Jersey via Oceana Concentrated Opportunities Fund Ltd.
May also accepted £5,000 from care home tycoon Ravinder Gidar. Back in 2014 hacks at The Bureau of Investigative Journalism exposed how his company, Gold Care homes, had failed numerous inspections by the Care Quality Commission. When in 2013 inspectors visited Queensway House, a Gold Care home in Hemel Hempstead, they found one resident lying in “a urine-soaked bed, naked and unable to call for assistance”.
Among the new PM’s first statements after her triumph funded by these men was that: “We need to get tough on irresponsible behaviour in big business.” If she ever does, she may upset some wealthy friends.
More top stories in the latest issue:
Rioja in hand, Nigel Farage indulges in some alpha-male boasting about what he thinks France’s National Front leader Marine Le Pen wants to do with him.
The unique naval repair ship – recently refitted – that’s now up for sale because there aren’t enough sailors to crew her.
Ignore the delays and big cost overruns of defence procurement – the arms industry and MoD ministers still agree on the need for... regular suppers!
The millions the MoD spends on an army of defence attachés who serve (mostly drinks) in some of the world’s more agreeable and peaceful locations.
Why blameless Durham county cricketers are relegated and in the financial mire while those in Yorkshire are poised to make hay.
Discord hits fever pitch in Bosnia; China buys a slice of Antigua for an offshore financial centre; plus briefings from Brussels and the Palestinian territories.