Offshore Companies based in Tax Havens own the Procurement Portal used by our Council

The road to hell, so they say, is paved with good intentions. So it was on the 25 Sept 2019, at full council, Cllr Lesley Whybrow (Green) (pictured) moved in Opposition Business for a Fair Tax Declaration to be taken up by our council . In her proposal it set out nine points and two of them we re-iterate here:

Demand clarity on the ultimate beneficial ownership of suppliers and their consolidated profit & loss position.

Support calls for urgent reform of EU and UK law to enable local authorities to better penalise poor tax conduct and reward good tax conduct through their procurement policies

Of the four recommendations open to the Council on what steps to take, they chose option (b); which was to “Refer the issue to the Cabinet for their observations before deciding whether to make a decision on the issue) be agreed.” The voting was 28 for, 0 against, 1 abstention (Cllr Jackie Meade (Lab))

A report which was to explore the implications if the council chose to adopt a Fair Tax declaration, was to present research undertaken by officers to enable Cabinet to determine the future direction regarding companies paying their fair share of tax, has not, as far as we are aware, come before the Cabinet, even though Cllr Whybrow now sits on the Cabinet. Almost three years have past and still no action on this issue. Talk is cheap.

Cllr Whybrow like many other Cllrs is not a stickler for detail. She probably is not aware the procurement portal used by Folkestone & Hythe District Council, is ultimately owned and controlled by a company and a person based in three offshore tax havens. They use every permissible accountancy trick to lower their tax.

The council use the Proactis site to alert companies and individuals to tenders it is placing; and tenders which have been won and awarded. They are not the only council who use this site. All other Council’s in Kent use this site, including KCC. Outside of Kent, other councils, NHS Trusts, Universities and other organisations, also use this  site to advertise tenders for their procurement work.

The Proactis site is owned by Proactis Group Ltd, which is owned and controlled by another company, and so it goes on through a chain of companies until finally arriving at Proactis Topco Limited (PT Ltd). Within this company, there is one person with control, and one company who have control.

But before moving onto the company who own and control Proactis Topco Limited, let’s take a look at the directors. They are

Michael Jordan Branigan who appears in the Paradise Papers and is linked to a company in Jersey as a shareholder in DouglasBay Capital II Founder Partner SLP which is registered in a known offshore tax haven and an address in Liverpool.

David Ian Alexander Morrison who also appears in the the Paradise papers and is linked to the same company as Mr Branigan, as a shareholder.

There are two other directors in Proactis Topco Limited who have similar names to those mentioned in the Paradise Papers, but we cannot be 100% it is them. So when in doubt leave it out, as it stops one from possibly getting sued.

Coming back to the company – Proactis Topco Limited – the company who has significant control of it, is named Cafe Parentco Limited. It’s address is 11-12 Hanover Sq, Mayfair, London, W1S 1JJ. This Company is controlled by Psc Nominee 4 Limited, and the company is registered at PO Box 656, Third Floor East Wing, Trafalgar Court Les Banques, St Peter Port, Guernsey, GY1 3PP. This address is mentioned in the Paradise Papers released in Nov 2017.

Psc 4 Nominee 4 Ltd was incorporated on the 06 Apr 2020. The company is indefinitely Audit Exempt, as is allowed under Guernsey law. There is no need to file a Directors Report, as it can use an exemption. The company is described as an “equity holding company (excluding  intellectual property, real estate and transport) with significant shareholder control over another entity“.  In short this means it is  a company which has as its sole function the acquisition and holding of shares or equitable interests in other companies, which does not carry on any commercial activity and which is a holding company within the meaning of the Guernsey Company law.

Guernsey is a known tax haven and it along with other Channel Island Tax Havens, has been described as being “among worst tax havens” worldwide.

Coming back to Proactis Topco Ltd, the person – as opposed to the company – with significant control, is Mr Alexander Maria Paiusco (pictured), who gives his address as C/O Dbay Advisors Ltd, 4th Floor, Derby House, 64 Athol Street, Douglas, Isle Of Man, Isle Of Man, IM1 1JD, also a known offshore tax haven.

Mr Paiusco gives his country of residence as Monaco, a known offshore tax haven. Monaco, as described by Sommerset Maugham is “a sunny place for shady people.”

Alexander Maria Paiusco appears in the Paradise Papers, and is linked to one company in the Cayman Islands, described as “the most notorious tax haven on earth“, four companies in Jersey, a known offshore tax haven, one of which the two directors mentioned above, Michael Jordan Branigan and David Ian Alexander Morrison, also sit in as shareholders. He also is named in eight companies in the Isle of Man, also a known offshore tax haven. And he is linked to three addresses in the Isle of Man, plus he is variously cited as a director, a shareholder, a signatory and an ultimate beneficial owner of the 13 named companies in the Paradise Papers.

Now in Councillor Whybrow’s call for a Fair Tax Declaration she states:

Polling from the Institute for Business Ethics finds that “corporate tax avoidance” has, since 2013, been the clear number one concern of the British public when it comes to business conduct.

Almost two-thirds (63%) of the public agree that the Government and local councils should consider a company’s ethics and how they pay their tax as well as value for money and quality of service provided, when undertaking procurement.

We know that the procurement portal owned by Proactis uses known offshore tax havens to reduce their tax bills. We know many other organisations in Kent and beyond use this procurement portal, including those who have have passed the Councils for Fair Tax Declaration; which rather defeats the point.

Finally, after three years there is still no report to Cabinet on this matter, and given Councillor Whybrow joined the Cabinet two and half years ago, she’s obviously not that serious about getting companies such as Proactis to pay their fair share of tax, or even getting rid of them and finding a procurement portal company who does pay there fair share in tax.

Cllr Whybrow started off with good intentions, but since has lost her way. The fair tax declaration still waits to be passed, three years and three months since she was elected, will it happen before May 2023? Only time will tell.

NB: – There are legitimate uses for offshore companies and trusts. The inclusion of a person or entity in this blog post is not intended to suggest or imply that they have engaged in illegal or improper conduct.

The Shepway Vox Team

Dissent is NOT a Crime