UK property market...target of slush funds
Private Eye, UK’s authoritative news and current affairs magazine noted for its incisive social and political observations and investigative journalism has unearthed how politically exposed Nigerians and other nationals are using the lucrative UK property market to stash away illicit money from their home countries.
The report traced how public persons in offshore nations have found the UK property market a safe conduit to hide ill-gotten wealth. The report which did not name the Nigerians involved, except former Delta State governor James Ibori, alluded strongly to politically exposed persons from developing nations making the most, illicitly, of the dynamic UK market.
In its current expository edition, the Private Eye wrote:
How many kleptocrats are stashing their ill-gotten gains in London’s property market? The Eye has identified quite a few in the past couple of years, such as corrupt Nigerian governor James Ibori’s houses in Hampstead and elsewhere. But a report from Transparency International now puts a number on the problem.
Researchers looked at around 45,000 property and land acquisitions by offshore companies in London, first established by the Eye’s work and mapped online (see www.private-eye.co.uk/registry). They identified 986 linked to “politically exposed persons”, or PEPs, who are either senior politicians or public figures and their close relatives. The individuals were linked to the offshore companies largely using information from the Panama Papers, acquired last year by Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists; the “World-Check” database of PEPs compiled by Thomson Reuters; and growing international registry OpenCorporates.
Owners of the properties could be established for fewer than half the offshore companies, so the true number of PEPs owning London property is likely to exceed a couple of thousand. Based on the values of the properties where these could be found, their interests are likely to run to around £1bn. Ultra-secretive Panama was the choice for half the PEPs identified, with Britain’s overseas territory the British Virgin Islands next favourite, chosen by a quarter. Transparency International declined to name names, but from a version of the World-Check database acquired by the Eye, some typical characters can be seen:
Muharbek Aushev, a former member of the Russian state Duma and deputy chairman of the Committee on Credit Organisations and Financial Markets, is a shareholder of Panama company Musical Distributors International Inc. In September 2005, while Aushev held office, the company acquired a £2m leasehold on an apartment in 20 Palace Street, a luxury development in Westminster.
Major General Mohammed Abdul Rahim Al Ali, deputy defence minister of the UAE, is the sole shareholder of BVI company Davado Ltd. In September 2009, the company acquired the leasehold on an apartment in Ascensis Tower, a luxury Thames-side development in Battersea, for £875,000. The minister, however, gives his address as a semi-detached home in Pembroke Gardens, Kensington, which was acquired for £1.1m in 2001 by another BVI company, Baywatch Developments Ltd.
Sean McWeeney, ambassador to the Vatican for the (overwhelmingly protestant) Bahamas and the Caribbean tax haven’s former attorney-general, is a director of Bahamas company Ketley Investments Ltd, which in 2004 acquired Woodchester House, a mansion in the Gloucestershire countryside, for £2.3m. McWeeney is also a director of another Bahamas company, Luton Investments Ltd, which acquired the leaseholds over two apartments in Clarendon Lodge, a mansion in Notting Hill, for a combined £1m.
Ahmad Ali Al-Mirghani, the former president of Sudan who was ousted in a military coup in 1989, owns BVI company Orange Star Corporation. In March 2007, the company acquired the leasehold over an apartment in Raynham, a luxury tower block overlooking Hyde Park, for an undisclosed sum. Al-Mirghani died the year the property was purchased, but Land Registry records show that the property is still owned via the BVI company.
Mamdouh Ismail, a former member of the Egyptian Shoura Council under deposed autocrat Hosni Mubarak, is a beneficiary of BVI company Freelance Properties Ltd. In October 2010, the company acquired the leasehold over the Hilton Hotel in Maidstone, Kent, for £6.25m. Ismail is also a shareholder of another BVI company, Queensgate Overseas Ltd, which in January 2009 acquired a leasehold over a flat in Chiltern Court on Baker Street overlooking Madame Tussauds.
As the last Eye pointed out, government plans to demand automatic identification of beneficial owners of UK property under David Cameron’s supposed anti-corruption crusade appear to have stalled. The task will be left to campaigners and hacks for a while yet.
