Details are beginning to emerge of Barbados’ link to the Panama Papers leak, described as history’s biggest data leak.
Barbados TODAY reported last night that 34 companies from Barbados had been listed in the Panama Papers, an unprecedented leak of 11.5 million files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca, exposing the offshore holdings of government leaders, criminals and celebrities in secret tax havens and showing the myriad ways in which the rich can exploit secretive offshore tax regimes.
With the help of the International Consortium of Investigative Journalists (ICIJ), Barbados TODAY had accessed a search engine which showed an infographic numbering the 34 companies from Barbados, 12 clients, five beneficiaries and 34 shareholders but no names or addresses of the businesses.
However, the Guardian newspaper in the United Kingdom, listed by ICIJ as one of three of its reporting partners, today reported that the British music tycoon Simon Cowell was among those named in the leak.
The paper made it clear that there was nothing to suggest that Cowell or any of those it has named in its coverage of the story, sheltered, or sought to shelter, money or assets offshore to avoid tax or for any unlawful purpose.
However it reported that the X-Factor boss was named in the papers as the sole shareholder of two British Virgin Islands companies called Southstreet Limited, set up in February 2007, and Eaststreet Limited, set up in October 2007.
According to the British newspaper, the companies were set up at a time when Cowell was planning to purchase two plots of land in Barbados.
The land is part of the moribund Four Seasons development at the 32-acre Paradise Beach site in Black Rock, St Michael. The hotel and villa development was touted as the ultimate millionaire’s hideaway, with investors tempted by plans showing luxury Balinese-style properties overlooking the beach. The developers boasted that upon completion it would rival Sandy Lane Resort.
Buyers reportedly paid between £6m (approximately $17m at today’s rate) and £11m (approximately $31m) for plots, with Cowell paying more because he bought two sites.
Neither of Cowell’s companies was ever used, and both are now dormant, the paper said.
“The companies were set up, not by my client, but by accountants acting for him as a common means for an overseas investor to purchase property in Barbados. My client, however, preferred to purchase them transparently in his own name. Therefore, the companies were never used for anything at all. I can also confirm on behalf of my client that he has not used any offshore companies for any purpose whatsoever,” the Guardian quoted Cowell’s spokesman as saying.
It reported that under Barbadian law, companies incorporated outside Barbados must be registered as an “external company” before they can own real estate here. The paper reported that one of the companies – Southstreet – was registered in Barbados in March 2007, shortly after the British Virgin Islands company was established.
“Using an offshore company to own land in Barbados can avoid stamp duty of about one per cent and a property transfer tax of about 2.5 per cent when the land is sold on,” the paper stated. There is no suggestion that Cowell sought or did benefit from this, it added.
The paper also quotes Cowell as saying that he pays tax all over the world: “Whenever I got knocked for what I do, I always say, well I do pay my taxes, and it helps, and I’m quite proud of that, here and all over the world.”
Cowell is said to be worth about £325m (approximately $1b).
The Paradise Beach project stalled several years ago after the developers missed various completion dates. British-based oil firm boss Aidan Heavey and Universal Music’s Lucian Grange both had filed legal actions in the Barbados Supreme Court against the developers in an attempt to recover their deposits.