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Pandora Papers: The secret owners of UK property worth billions

London property traced to offshore firms

 

The secret owners of more than 1,500 UK properties bought using offshore firms have been uncovered by a BBC investigation.

The details are featured in the Pandora Papers leak of offshore financial documents and list property with an estimated value in excess of £4bn.

The owners include high-profile foreign politicians, individuals accused of corruption and UK political donors.

Ministers say they will bring in a new law when they have parliamentary time.

Successive Conservative governments have pledged to introduce legislation making it compulsory to name those owning property via foreign companies in a bid to stamp out money-laundering.

Among the revelations:

Retail magnate Sir Philip Green and his wife went on a buying spree of London

property while the couple’s recently sold High Street empire teetered on the verge of collapse

The Qatari ruling family purchased two of London’s most expensive homes through offshore companies, saving millions of pounds in tax

Ukrainian billionaire Gennadiy Bogolyubov, who is under investigation by the FBI and had hundreds of millions in assets frozen in a fraud case, owns more than £400m of UK property

A £40m London office block is owned by the son of sanctioned Russian oligarch Mikhail Gutseriev

The BBC worked with the International Consortium of Investigative Journalists (ICIJ), the Guardian, Finance Uncovered and other media outlets to identify in the leaked files the individuals behind overseas companies that owned property in England and Wales.

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Owning real estate through an offshore firm is legal, and there is no suggestion of wrongdoing in simply using a foreign company to purchase property.

However, the UK government recently raised its own assessment of the money laundering risk for the property market from “medium” to “high”.

The greatest level of risk is where there are “difficulties in determining the ultimate beneficial owners”, according to a Home Office report in December 2020.

It comes as a number of world leaders – including the King of Jordan and the ruling family of Azerbaijan – have featured in the Pandora Papers leak after buying property in the UK using offshore companies.

 

The following year they bought parts of the ground and first floor of this property in Mayfair for £15m

And this building in Marylebone, owned offshore by the Greens, was the BHS headquarters. They sold it to their own company, Arcadia, for £53m in 2015

The wife of retail tycoon Sir Philip Green purchased multi-million-pound prime London real estate as BHS, the department store chain they had owned, headed for collapse.

Her identity as the buyer of properties in London was hidden because they were bought through anonymous companies based in the British Virgin Islands, a tax haven.

The purchases included a £15m apartment in Mayfair and a new home for their daughter near Buckingham Palace, bought for £10.6m in 2016.

The buying spree took place in the months after the Greens sold BHS for a token sum to a one-time bankrupt who had no retail experience. The chain collapsed, leading to the loss of 11,000 jobs and vacant sites in town centres.

The downfall also led to an outcry when it emerged the business had left a black hole of up to £571m in its pension fund.

Through their lawyers, both Sir Philip and Lady Green declined to answer detailed questions, suggesting that these were private matters.

The Pandora Papers leak also reveals the property portfolio of the Qatari ruling family owned through another cross-border network of companies.

The royal Al-Thani family purchased two properties on one of the world’s most expensive terraces, overlooking Regent’s Park in London. They were bought through offshore companies, saving millions of pounds in tax.

BBC analysis found numerous other properties owned by members of the family through these structures, estimated to be worth over £650m.

The Qatari government did not respond to questions about the BBC’s findings.

Gennadiy Bogolyubov is a Ukrainian billionaire who is under investigation by the FBI for money laundering.

He and his business partner are accused of defrauding the bank they founded of more than £1bn.

Court documents included in the Pandora Papers reveal him to be the ultimate owner of a collection of UK properties likely to be worth over £400m, including a building on Trafalgar Square.

They are held via a network of companies, some offshore, that hide the identity of the owners.

Mr Bogolyubov is the co-founder of PrivatBank, Ukraine’s largest lender.

The bank was nationalised in 2016 after regulators found a $5.5bn hole in its balance sheets.

PrivatBank has been pursuing Mr Bogolyubov and his business partner Igor Kolomoisky through court action in England and the US, trying to reclaim more than $3bn relating to the money lost during their leadership.

In 2020 the US Department of Justice sought to seize commercial properties in Texas, Ohio and Kentucky from the pair, suspecting that they were “acquired using funds misappropriated from Privatbank”. The court cases are ongoing.

Mr Bogolyubov’s assets are currently subject to a worldwide freeze, secured in court by PrivatBank in 2017.

In 2016 he decided to leave the country and settle in Switzerland, partly for “tax reasons”.

Lawyers for Mr Bogolyubov declined to comment as legal action is ongoing.

 

Mikhail Gutseriev

Mikhail Gutseriev is a Russian oligarch who was sanctioned by the UK in August for his close relationship with Belarus President Alexander Lukashenko. The Pandora Papers reveal that his son owns a multi-million pound office block through a secret offshore company, purchased for more than £40m.

Mr Gutseriev is the founder of Safmar Group, a Russian conglomerate with interests in oil, coal, property and retail.

Following the crackdown on human rights and democracy in Belarus in 2020, the UK and EU have recently brought in sanctions against President Lukashenko, along with Mr Gutseriev and other close associates.

The British government has accused the Belarusian regime of continuing to “crush democracy and violate human rights”.

It described Mr Gutseriev as “a prominent Russian businessman who is one of the main private investors in Belarus and a longstanding associate of Alexander Lukashenko”. It added that he had “provided support for the government of Belarus, including through use of his business interests”.

Mr Gutseriev is no longer involved in Safmar, which is now part-owned by his son, Said, a British citizen.

Said Gutseriev’s representatives told the BBC he did not have “any business links with his father”.His lavish wedding made headlines in 2016 – it featured performances by Jennifer Lopez and Enrique Iglesias and was reported to have cost $1bn.

What is the UK government doing?

Plans for a register of foreign companies owning UK property were first announced in 2016 by then Prime Minister David Cameron, so that “corrupt individuals and countries will no longer be able to move, launder and hide illicit funds through London’s property market, and will not benefit from our public funds”.

Draft legislation was published two years later and “progress” on changing the law was promised in the 2019 Queen’s Speech.

Earlier this year, following the G7 summit, the government reiterated its commitment to create a public register of overseas entities who own UK real estate.

However, the law has still not been introduced to Parliament and was not listed as one of the government’s legislative priorities at this year’s Queen’s Speech.

Labour MP Margaret Hodge told the BBC that when in government David Cameron and his Chancellor George Osborne “promised us that they would create a public register of beneficial ownership here in the UK… but we’ve been waiting since 2016 for that promise to be enacted”.

She added: “It’s ready, it’s sitting there, it’s not complicated… but it has yet to emerge… so it’s a scandal that that’s not happened.”

The government says it is cracking down on money laundering with tougher laws and enforcement, and that it will introduce a register of offshore companies owning UK property when parliamentary time allows.

World leaders

UK properties owned offshore by foreign leaders
Tap to see the UK offshore properties of foreign heads of state
The King of Jordan owns eight properties in London and south-east England, through offshore companies
These include multi-million pound properties near Buckingham Palace. He bought the building on the left and three flats in the building on the right
Azerbaijan’s ruling Aliyev family, long accused of corruption, were, with close associates, involved in property deals in the UK worth over £400mPhoto of Azerbaijan President Ilham Aliyev
This includes a £33m property in central London bought for the president’s 11-year-old son

The UK property holdings of the King of Jordan and the ruling family of Azerbaijan were exposed by BBC Panorama on Sunday.

Lawyers for King Abdullah said he used his personal wealth to buy the homes and there was nothing improper about him using offshore firms to do so.

Other revelations from the Pandora Papers highlight further links between foreign leaders and offshore ownership of UK property.

The family of Kenya’s President Uhuru Kenyatta, which has dominated the country’s politics since independence, secretly owned offshore companies for decades.

One of these firms bought an apartment in central London, according to Land Registry records.

The company was set up by Ngina Kenyatta, the president’s mother, and her two daughters Kristina and Anna.

In 2018, Mr Kenyatta told the BBC Hardtalk programme that his family’s wealth was known to the public, and as president he had declared his assets as required by law.

Ukraine’s President Volodymyr Zelensky participated in a network of offshore companies, co-owned with his long-time friends and TV business partners, the Guardian revealed on Sunday.

These firms held assets including apartments near London’s Regent’s Park.

A number of world leaders have released statements denying wrongdoing after featuring in the leak.

Tory donors
Closer to home, major political donors to the Conservatives have invested in properties through offshore companies.

Mohammed Amersi, bought two properties using offshore companies: a Mayfair townhouse and a country home in Gloucestershire. He was revealed by Panorama to have been involved in one of Europe’s biggest corruption scandals. He denies any wrongdoing.

Lubov Chernukhin has given more than £1.8m to the party since 2012. The Pandora Papers leak revealed the scale of the secret offshore wealth she shares with her husband, a former Russian minister. It includes a house near Regent’s Park in London now worth about £38m, and a mansion in Oxfordshire bought for £10m. The properties were secretly acquired through a network of offshore companies. Mrs Chernukhin’s lawyers say she is a British citizen and is entitled to do as she wishes with her money

Russian businessman Victor Fedotov’s companies have given £900,000 to MPs. He purchased a Hampshire manor house through a network of offshore companies. Files in the Pandora Papers suggest he made millions from a project that became mired in allegations of corruption. Mr Fedotov’s lawyers said “there is no evidence whatsoever” he behaved improperly.

The BBC searched for information about donors to all of the political parties among the Pandora Papers documents but the stories that emerged from the files were about Conservative donors.

Pandora Papers banner

The Pandora Papers is a leak of almost 12 million documents and files exposing the secret wealth and dealings of world leaders, politicians and billionaires. The data was obtained by the International Consortium of Investigative Journalists in Washington DC and has led to one of the biggest ever global investigations. More than 600 journalists from 117 countries have looked at the hidden fortunes of some of the most powerful people on the planet. BBC Panorama and the Guardian have led the investigation in the UK.

Images from: BBC, London News Pictures, Central News, Shutterstock