ICIJ’s revelations about offshore finance secrecy have prompted the British government to promise that it would investigate any abuses revealed involving sham nominee directors.
The UK’s business secretary, Vince Cable, promised to investigate the global trade in sham offshore company directors following the disclosure of widespread abuses in Secrecy for Sale: Inside the Global Offshore Money Maze, a major joint reporting effort by ICIJ, the Guardian and the BBC’s Panorama program.
Cable said on Monday in a statement: “We are not complacent or naïve. We recognize that there are individuals who will seek to abuse or evade” the regulations.
He would carefully consider the evidence being brought to light, and would review the so-called nominee director trade.
“I can assure you that we will investigate fully any specific allegations and ensure that appropriate action is taken … If we identify a need for further action as a result of that review, we will not be afraid to take it.”
The booming sham director industry, which is largely led by a small group of expatriate Britons, opens the way to tax avoidance and concealment of assets. The UK government has also allowed the anonymous purchasers of offshore companies, particularly those registered in the British Virgin Islands, to take over an increasing number of UK properties while hiding their true identities.
The joint investigation into Britain’s role in the sham director trade has identified more than 21,000 companies, spread across the world in different jurisdictions, whose directors are pretending to control companies which are secretly owned by other people, such as Russian oligarchs and property speculators.
The British sham directors, many originally from the Channel island of Sark, are based in remote places, including Nevis, Vanuatu, Mauritius, Cyprus and Dubai. They sell their signatures on official company documents, sometimes thousands of times.
Cable said that if nominees did not even know they had been appointed as directors of a company, a criminal offence of making false statements could have been committed. “My department has also disqualified a number of individuals who have accepted directorships in return for a nominal fee or commission from someone unknown to them.”
But he added: “I am, however, conscious of the need to avoid additional burdens being placed on the vast majority of companies and directors who do comply with the law. We are therefore focusing our attention on those who deliberately seek to contravene it.”