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Showing posts with label director. Show all posts
Showing posts with label director. Show all posts

Sunday 22 April 2018

Britain, headquarters of fraud. The strange case of Kevin Brewer

Oliver Bullough in The Guardian

Officials get fed up with accusations that Britain is a cesspool of dirty money; that they do too little to check the wealth hidden behind shell corporations. They grouse among themselves that their critics overlook the work they’re doing to expose the money flows and to drive out the corrupt.

When they do get a win, therefore, they trumpet it. Last month, Companies House successfully prosecuted someone who had lied in setting up a company, the kind of white-collar crime committed by the sophisticated fraudsters who fleece ordinary Brits every day, and the government went large. “This prosecution – the first of its kind in the UK – shows the government will come down hard on people who knowingly break the law and file false information on the company register,” crowed business minister, Andrew Griffiths, in a press release.

A Warwickshire businessman called Kevin Brewer had pleaded guilty, paid a fine and the government’s costs: a total of more than £12,000. His crime had been to falsely claim that two companies he created belonged, in one case, to the MP Vince Cable, and, in the other, to the MP James Cleverly, Lady Neville-Rolfe and an imaginary Israeli. At first, the public response to the news was everything the press release’s authors could have hoped for. The Times splashed with the details of the crime – the government was tough on fraud, tough on the causes of fraud. But the victory was short-lived. Within a month of the triumphant press release, Tory MP John Penrose, the government’s anti-corruption champion, was slamming the prosecution as “a bone-headed exercise in shooting the messenger”. Brewer may have been, by his own admission, naive, but he was trying to expose a flaw in British regulations that enables frauds totalling hundreds of billions of pounds. His reward was years of being ignored and, finally, a criminal record. “That has to be wrong,” said Penrose.



 Lady Neville-Rolfe was minister responsible for Companies House when Kevin Brewer set up a company that included her as a director and shareholder. Photograph: Richard Gardner/REX/Shutterstock

The 4m corporate vehicles in the British registry are the building blocks of our economy, crucial to our prosperity. Hidden among them, however, like pickpockets in a crowd, are thousands of fake companies used by fraudsters to commit their crimes. Companies let criminals look legitimate and make their frauds, tax evasion or kleptocracy resemble normal business activity.

These fake companies have tell-tale flaws: invented addresses, offshore ownership, dormant companies acting as other companies’ directors. The strange thing about Brewer’s companies, however, is that they did not have these flaws. They were registered to Brewer’s address; his business acted as their agent; he wrote to the MPs and the peer to tell them he had created companies in their names; and he dissolved the companies after he’d done so.

If he was a criminal, he was a very strange one: a bank robber who took no money, left his business card on the counter and wrote the manager a letter confessing to the crime. Yet, while real bank robbers are getting away with theft all around us, Brewer ended up in court. His is a story that goes to the heart of Britain’s ramshackle approach to tackling money laundering and exposes our shameful failure to combat a crime that spreads far beyond our borders.

Brewer, who turned 66 on Saturday, is a company formation agent and reckons he has created half-a-million corporate vehicles since 1984. “It grew into a national enterprise, forming companies for anybody in the country,” he told me. “My main clients were solicitors and accountants, professional clients more than the public, because of – I’d like to say – the quality of the service.”

Part of that service was a rigorous due diligence process: he checked his client’s identity, the source of their funds and the purpose of their company. Often, investigators from the police or the Revenue & Customs would ask to look at his files and he would help them discover who was behind a company that had committed a crime. “I’ve given witness statements in very large trials. The Serious Fraud Office sent me a thank-you letter,” he said.


For the price of fish and chips, anyone could log in, form a company, put in any name they liked – Mickey MouseKevin Brewer


His problems began in 2011 under the coalition government, when business secretary Vince Cable opened up Companies House’s online registration system. As part of a drive to make the country more entrepreneurial, anyone could now register a company via the registry’s web portal, rather than doing it on paper or going via an intermediary such as Brewer. You may remember the “Britain Is Great” advertising campaign from bus stops in 2012: one strapline boasted that it took less than 24 hours to incorporate in the UK. Ministers thought this was good; Brewer thought it was awful.

“For the price of some fish and chips, anyone in the world could log in, form a company, put in any name they liked, Mickey Mouse and Donald Duck, somebody else’s name, totally fictitious names, get their companies formed and get their certificate,” he said. “You could be in Russia, Jamaica, anywhere.”

Where Brewer had charged £100 for a company, Companies House charged £18; where he checked his client’s intentions and identity, Companies House didn’t check anything. This threatened his business, but it also threatened to unleash fraud on a scale never before seen. He felt sure the government hadn’t considered the consequences of its policy, so he wrote to Cable. “Not only is the policy misguided and costly, it has created massive opportunity for fraud and deception,” Brewer wrote. “To illustrate the point we have created a company in your name without your consent or knowledge and could start trading using your identity.” John Vincent Cable Services Ltd had been incorporated on 23 May 2013, with a single shareholder – the business secretary.


 Illustration: Dom McKenzie

Jo Swinson MP replied on behalf of Cable, explaining at length why Companies House was not covered by anti-money laundering regulations. She also warned that he had committed a criminal offence in creating the fake company, but that she didn’t want to see him prosecuted. The Daily Mirror wrote it up as a curious oddity and that was the end of the matter.

A spokesman for the Department for Business, Energy & Industrial Strategy (BEIS) was careful to point out to me last week that Brewer was not being altruistic when he made his warning to Cable: he was losing business as a result of the changes to Companies House. Although this is true, it does not detract from the fact that Brewer had a point.

British corporate vehicles have enabled fraud on a global scale. The former president of Ukraine used British companies to conceal his property, as did his cronies. The “Russian laundromat”, a complex money-laundering scheme that moved $21m out of Russia, was run through Scottish limited partnerships. Transparency International UK (TI-UK) last year analysed 52 corruption cases and found they involved 766 British corporate vehicles, which had laundered some £80bn. “The human damage inflicted on the victims of these crimes is still being counted,” it said, in its report Hiding In Plain Sight.

Sophisticated financial crime is impossible without corporate vehicles. Carousel fraud, a scam in which traders import goods, sell them to themselves via related companies, before exporting them and claiming back VAT that they never paid, costs the UK £500m to £1bn a year and that is just one category of crime. The UK as a whole loses as much as £193bn a year from fraud, while perhaps another £100bn is laundered through the country’s financial system, according to a National Crime Agency (NCA) report from last year.

In an attempt to stop this happening, David Cameron’s government obliged UK companies to declare a person with significant control (PSC – someone who actually owns the shares) and made it free to search Companies House so as to increase public scrutiny. The trouble is that no one at Companies House is checking the accuracy of the information submitted. No matter how transparent something is, the old tech rule applies: garbage in, garbage out. 

There is a cottage industry of activists seeking discrepancies in Companies House’s data in an attempt to make it do something about this problem. In January, Global Witness analysed PSC entries and found 4,000 toddlers owning companies, as well as one beneficial owner who was yet to be born. Graham Barrow, a City expert on financial crime who is currently working at Deutsche Bank, likes to post amusing cases on his LinkedIn page. A recent example documented the adventures of a man who had spelled his name six different ways, thus foiling attempts to search for him electronically.

However, Companies House doesn’t appear to respond to such revelations. I wrote an article in 2016 that featured a serial company director whose career had been unimpeded by her death four years earlier; two years on and she’s still director of an active company listed on the registry. TI-UK alerted Companies House to active companies that had been involved in the money-laundering schemes it had identified, but no noticeable action appears to have been taken against them.

“I’ve worked for a number of global banks who between them have received multimillion dollar fines and none of them was close to being as bad as Companies House with their due diligence,” Barrow told me. “Poor Kevin Brewer, I feel for him. A man tries to show how bad things are and he’s the one who ends up getting prosecuted.”

Part of the problem is the extraordinary complexity of the money-laundering regulations, which float around in an acronym soup. If an accountant or lawyer creates a company, she will be regulated by one of 22 different bodies, which are in turn overseen by the newly created Office for Professional Body Anti-Money Laundering Supervision (OPBAS), which is part of the Financial Conduct Authority (FCA). Company formation agents such as Brewer, however, are regulated separately, although they’re doing exactly the same job. They report to HMRC, which is a non-ministerial department. When Companies House creates corporate vehicles, meanwhile, it isn’t regulated for anti-money-laundering purposes at all and is an executive agency working with BEIS.

According to Jon Benton, who retired last year after a career investigating corruption and financial crime in the Met, the NCA and the Cabinet Office, most of these agencies don’t even have software that can communicate with the others, let alone share intelligence with them. “I’m in the private sector now and I see the power of the analytical software used by financial institutions. It’s decades ahead of law enforcement,” he told me. “We criticise things in places like the British Virgin Islands, but it’s happening on our doorstep.”

In March, MPs discussed a sanctions and anti-money-laundering bill and Labour’s Anneliese Dodds, a shadow Treasury minister, proposed two amendments that would have addressed the problems identified by Brewer, TI-UK, Global Witness, Barrow, Benton and pretty much everyone else who has looked at Companies House for any length of time. One amendment sought to make the registry liable to money-laundering regulations and the other sought to block anyone not subject to UK regulations from creating UK companies.

“A huge number of companies are created without any checks. We are talking about 251,628 companies last year,” Dodds told the public bill committee. “Our proposal has been portrayed as only a burden, when it could help our constituents from being ripped off by unscrupulous individuals… they can be there by day, fly by night, and leave the unfortunate person who dealt with that company in a very difficult position.”

John Glen, a Treasury minister, replied for the government, repeating many of the same arguments that Jo Swinson used with Brewer in 2013: Companies House is just a repository of information, it has no powers to check the accuracy of what is presented to it. He also stressed that it would not be fair for legitimate companies to have to repeat the kind of identity checks they already do to open bank accounts. “The impact on resources to carry out due diligence on that number of companies would be considerable,” he said. “The overall cost to the UK economy could run into the hundreds of millions of pounds each year.”

TI-UK has also assessed the cost of the kind of changes Labour was arguing for, but came to a figure far below that of the government. It estimated that Companies House could cover the cost of the reform by raising the price of incorporation by just £5-10. That would make incorporating in the UK cost around £20, which would still be cheap by global standards. Buying a company in the British Virgin Islands costs 50 times as much. Frances Coulson, an experienced insolvency solicitor and a director of the Fraud Advisory Panel, which aims to help Britons fight financial crime, said that even a £100 fee would be a price worth paying. “This is a hole, through which people can launder money. I don’t think fixing this would be problematic for business; what’s £100 to them? And it wouldn’t cost the state anything - it’s self-funding,” she said. “There are thousands of companies on the register with nonsense information; we come across them all the time, the information is just nonsense. So the question is what sort of business would it deter? Do we want fraudsters? This wouldn’t deter legitimate business, because they need to do all the same checks to set up bank accounts anyway.”


  Vince Cable, in whose name Kevin Brewer set up one of his fake companies. Photograph: Andrew Matthews/PA

Dodds said that she didn’t think the government had understood the scale of the problem. The proportion of companies created directly with Companies House, rather than via regulated intermediaries, is increasing every year and is approaching 50%. If the ownership information for half of all new companies is non-verified, that brings the integrity of the entire registry into question.

“We need to be absolutely sure that London or Potters Bar, or Glasgow for that matter, are not locations for washing dirty money. Because that’s about stealing money from poor people and we really shouldn’t be helping,” she said. “The only thing that’s happened is this poor bloke has been convicted. It’s outrageous and it needn’t be that expensive to do something properly.”

After Cable lost his position following the 2015 general election, Brewer renewed his campaign with the new all-Conservative government. He wrote to MPs he thought might be sympathetic and to ministers, trying to persuade them this flaw in Britain’s anti-money-laundering defences was something they should be concerned about.

He won a friendly response from James Cleverly, leader of the Free Enterprise Group of Tory MPs, and he hoped to persuade Neville-Rolfe, who was then the minister responsible for Companies House. He decided to repeat the trick that had failed to impress Cable and incorporated a new company – Cleverly Clogs Ltd – on 17 May 2016.

Cleverly and Neville-Rolfe were shareholders and directors, alongside the fictitious Israeli Ibrahim Aman (whose home address, for some reason, Brewer listed as being in a shopping mall in Braintree). It didn’t help, however. The meeting with Cleverly was cordial, but he never got to meet Neville-Rolfe and ministers were every bit as noncommittal as their Lib-Dem predecessors. “It got nowhere; I was disillusioned and had come to the end of the road really. I didn’t think there was much more than I could do. That was 2016,” he said.

He may have been finished with Companies House, but Companies House wasn’t finished with him. An investigator from the Insolvency Service interviewed him under caution, so Brewer showed him the correspondence, explained how he’d told Companies House about his stunts, tried to tell the people whose names he’d used, explained that he’d been trying to highlight a problem. “I hadn’t done anything for nefarious purposes; I closed the companies immediately after. Nobody said I was going to get prosecuted,” he told me. “I’d just been a bit naive in my actions, which were well-intentioned, to try to get dialogue, because I felt they just didn’t understand. Every letter you got back from whatever minister was virtually word for word the same.”

Then, on 11 December last year came the summons to Redditch magistrates’ court. He consulted a lawyer and pleaded guilty on 15 March. With the fine, his own costs and those of the government, he was £22,800 out of pocket.

This was the decision that so appalled Penrose, the anti-corruption champion. “The only prosecution that has ever been brought was the gentleman who was trying to point out the problem in the first place, and admitted it, and drew it to the authorities’ attention. And what did he get for his pains? A £22,000 [bill],” he said, at the media-focused Frontline Club’s regular kleptoscope event (full disclosure: which I organise and host) in London on Wednesday. “That cannot be right, that has to be wrong. But it rather self-evidently proves the point that we’re not paying enough attention to whether this information is being filed properly and I’ve already taken this up in the last 24 hours with ministers.”

It took me most of a day to discover who had taken the decision to prosecute Brewer. BEIS, the department whose minister, Andrew Griffiths, was so enthusiastic in the original press release, passed me on to Companies House, which credited the decision to unnamed “prosecutors”. A spokesman for the Crown Prosecution Service told me with undisguised relief that the decision had had nothing to do with them. Eventually, the buck stopped with the Insolvency Service, where a spokesman confirmed that they had received a file from Companies House. “The Insolvency Service Prosecutor concluded that there was sufficient evidence to institute criminal proceedings with regards to the Code for Crown Prosecutors and that it was in the public interest to do so,” he said.

The Code for Crown Prosecutors is an 18-page document laying out what to consider before taking someone to court. It is divided into stages and this case would have clearly passed the evidence stage, since Brewer himself had either provided all the evidence needed or else left it in plain sight in the files of Companies House. The public interest stage was a more interesting hurdle to overcome, however, particularly the requirement to consider the “circumstances of the victim”. Who exactly was the victim of Brewer’s crime?

Neville-Rolfe, who had no warning or explanation for what had happened, never met Brewer and didn’t realise it was supposed to be a stunt, said it felt like a violation, almost as if she’d been hacked. Cleverly, however, who had met Brewer and perhaps realised the robust nature of his sense of humour, has confirmed that he sees no reason for Brewer to be prosecuted.

Cable, now leader of the Liberals Democrats, said in a statement that he thought this was an overreaction. “The civil servants were doing their job trying to protect me because they were worried this was a scam. However, in retrospect. this was heavy handed and they did not sufficiently realise that Kevin Brewer was trying to improve the system,” he said. “They should drop the fine.”

Thursday 18 January 2018

Four lessons the Carillion crisis can teach business, government and us

Larry Elliott in The Guardian


Carillion’s collapse was capitalism in action. Profits are the reward for taking risks, and sometimes the risks materialise. Carillion’s problem was not that its profits were too high, but that they were too low when things started to go wrong. In a free-market system, it’s that simple.

Except that it isn’t quite that simple in this case, because much of Carillion’s work was for the government: building roads and hospitals, running prisons, providing school meals. Whitehall didn’t want the company to go bust, so bunged it a few new contracts when it was already in trouble in the hope that something would turn up. Instead, Carillion staggered on for six months as a zombie company before the banks pulled the plug.

What’s more, the directors of the company took steps to shield themselves from financial risk. The Institute of Directors – which strongly believes in free markets and the profit motive – described a 2016 change to pay policy that made it harder to claw back bonuses as “highly inappropriate”, which of course it was. The company’s workforce, its subcontractors and its pensioners have not been so fortunate.


PFI has been an attempt to prove that it is possible to get world-class public services on the cheap. This is a delusion


Jeremy Corbyn says the demise of Carillion is a watershed moment, and he could well be right. The reputation of business is already at a low ebb and the Carillion saga has everything to get the public fired up: mismanagement, dividends for shareholders and boardroom fat-cattery leading to job losses, pension cuts and more expensive public services. Voter resistance to local councils taking previously outsourced services back in house is likely to be minimal.

The time has come to have a hard look at the private finance deals that have been the vehicle of political choice for delivering infrastructure projects – and, increasingly, public services – for the past quarter of a century. Public-private partnerships started as an accounting wheeze in John Major’s government when it needed a way to prevent spending on capital investment boosting high borrowing built up in the early 90s recession.


‘Gordon Brown (left), chancellor under Tony Blair (right), needed to find a way of building new schools and hospitals promised in opposition.’ Photograph: WPA Pool/Getty Images

But the Conservatives became less wedded to them when an improving economy led to an improvement in the public finances as the 90s wore on. It was Labour’s arrival in office in 1997 that gave private finance a new lease of life. Gordon Brown, Tony Blair’s chancellor, pledged to stick to the tough spending targets inherited from the Tories for two years, but still needed to find a way of building the new schools and hospitals promised in opposition. PFI (the private finance initiative ) – under which the private sector would pay for a new project up front and be paid back by the government over the coming decades – was the answer.

PFI, essentially a live-now pay-later approach, was always an expensive way to fund infrastructure, and the private sector did well out of them.

Life became a lot tougher after 2010, when the coalition government decided its first priority was to reduce a budget deficit at 10% of GDP. Spending on infrastructure was cut, and private sector contractors such as Carillion found Whitehall more miserly when negotiating contracts. Local government, which bore the brunt of government spending cuts, came under pressure to outsource services to save money.

Austerity and PFI was an unhappy marriage. To be sure, taxpayers saved money by getting the private sector to provide services more cheaply. But savings came at a price. Prisoners turned up late for court appearances; schools were built to a lower specification; PFI contractors cut corners to save money whenever they could because the bids put in to win contracts were barely enough to cover their costs. This was a race to the bottom, and Carillion won it.
George Osborne, who masterminded the coalition’s austerity strategy, says the problem was a failure to use more small- and medium-sized companies instead of relying on the big beasts. This is absurd: only large outfits could contemplate taking on large PFI contracts. And in many cases, multifaceted companies such as Carillion used profits from one sector to subsidise losses elsewhere in their portfolios.Q&A
How are you being affected by the Carillion liquidation crisis?Show

There are lessons to be learned from Carillion’s collapse, but the idea that SMEs should be building billion-pound hospitals is not one of them. Lesson one is that governments can have austerity or they can have PFI, but not both together. For the past eight years, it has been possible for the state to borrow for long periods at historically low interest rates. This would have been – and still is – a more cost-effective way of financing big infrastructure projects.




London libraries assess impact of Carillion collapse


Lesson two is that the state is not well equipped to manage big infrastructure projects. There are plenty of examples – the abandonment of the NHS IT project at a cost of £12bn, for example – of official incompetence. Whitehall’s handling of Carillion has left a lot to be desired. No matter what Labour says, the private sector will inevitably have a big role in the delivery of major projects. Even under a Corbyn-led government, there would inevitably be a role for it.

Given that, lesson three is the need to rethink company law. Trade unions felt the full force of the law when they were deemed to have acted badly in the late 70s and 80s; a similar approach for corporate wrongdoing is long overdue. It might simply mean enforcing existing laws more strongly, but the step that would send a shiver through boardrooms would be the end of limited liability for directors of limited companies. Limited liability is supposed to encourage entrepreneurship. In Carillion’s case it seems to have created moral hazard.

The final lesson is for the public. PFI has been an attempt to prove that it is possible to get world-class public services on the cheap. This is a delusion. If we want world-class public services, one way or another they will have to be paid for.


Wednesday 17 January 2018

Carillion's Directors Ticked all the Good Governance Boxes

Kate Burgess in The Financial Times



Following the collapse this week of Carillion, with less than £30m in the bank and liabilities of more than £2bn, the board of the construction company has been accused of being either deluded or just plain inept. 


On paper, the directors looked well qualified to steer the outsourcer. As chairman, Philip Green was a former chairman of United Utilities, the UK’s largest listed water company. Not only had he run a large contracting company, he was also a fully paid-up member of the great and good as a former adviser to then prime minister David Cameron on corporate responsibility. 

The directors did not lack experience, sitting on boards from Royal Dutch Shell to Premier Farnell. 

Alison Horner, head of the remuneration committee, was formerly operations director at Tesco and a non-executive director of Tesco Bank. The head of the audit committee was an accountant, as were three other directors. 

And none were entrenched. The chief executive, Richard Howson, who joined Carillion’s board in 2009, was the longest-serving member. 

The board ticked all the boxes in terms of good governance. Carillion’s non-executive line-up included two women. The average age of directors was about 54 years, or 57 excluding Mr Howson (48), and Zafir Khan (also 48), the finance director appointed in January last year. 

Yet just a year ago, the board cheerfully signed off statements from Mr Howson that debt would be below £300m within months. 

With hindsight, the board fell into a series of textbook traps that have, over the years, felled many a construction and contract business: 

- Failing to halt acquisitions and the build up of liabilities 

-Signing off aggressive accounting policies that allowed revenues to be booked early and costs to be delayed 

-Not tapping shareholders for help and instead continuing to pay out dividends even as cash haemorrhaged out of Carillion 

- Signing off on hefty pay packets and bonuses for top executives even when they scored zero on key performance targets introduced to instil capital discipline 

-Allowing clawback conditions to be changed a year ago, striking out corporate failure as a reason to take back bonuses 

The board had seemed to be everything UK investors might want for a youngish business in a youngish sector. Carillion may have been formed from the construction divisions of Tarmac, Wimpey, Alfred McAlpine and Mowlem, which have been around for decades, but the company itself was formed in 1999. It engaged well with investors, even those who had shorted Carillion stock. Notably, shareholders approved directors’ elections without a murmur. 

It is worrying to think the construction company’s board was such a model of good governance. If the line up had been different, would another cast of characters have done any better? 

And how many other supposedly well-run boards are presiding over impending corporate disasters elsewhere?

Thursday 4 April 2013

More than 175,000 UK companies have offshore directors


Figures raise concern about scale of offshore secrecy arrangements by British businesses
Channel Islands, Europe, True Colour Satellite Image
On Sark in the Channel islands there have been 24 current and former UK company directors for every resident. Photograph: Universalimagesgroup/UIG via Getty Images
More than 175,000 UK-registered companies have used directors giving addresses in offshore jurisdictions, the Guardian has established. This raises fresh concerns about the scale of Britain's involvement in offshore secrecy arrangements.
Data obtained from the corporate information service Duedil reveals 177,020 companies have listed directors in jurisdictions such as the Channel Islands, British Virgin Islands, Cyprus, Dubai and the Seychelles.
More than 60,000 of those companies are listed as currently active on Companies House, the official register of UK businesses.
Having directors in offshore jurisdictions does not indicate a company is doing anything illegal, or that a director is necessarily a sham.
British expats who retain directorships of their business would feature in this data, as do "personal services companies" based in the Isle of Man, which help self-employed people incorporate themselves as a limited company.
However, the figures do reveal the huge scale of company registration relative to some of the islands' tiny populations: 47,161 companies have listed directors from the Isle of Man – representing one British company for every 1.8 residents of the island.
The figure is even more stark for the secrecy haven of the British Virgin Islands, where there is one director listed for every 1.3 residents of the islands, for a total of 17,959 UK businesses, past and present.
On the tiny Channel Island of Sark, there have been 24 current and former UK company directors for every resident of the island.
Many of the key figures involved in the "Sark Lark", as it was known, emigrated when the island's controversial practices came under scrutiny a decade ago. Most of those companies are now defunct, with only around 209 active directorships.
A Guardian/ICIJ investigation, published last November, documented the activities of more than two dozen "sham directors" – Britons each listed as directors of hundreds, and sometimes thousands, of companies registered across the world, allowing the real people behind them to stay in the shadows.
These sham directors held directorships not only in offshore companies but also in more than 8,900 British-registered companies – meaning UK authorities were left in the dark as to who was really in charge of supposedly British businesses.
These new findings suggest the numbers of such less-than-genuine directors on British company registers may be much greater than the 28 so far identified.
The Offshore Secrets investigation identified groups of nominee directors working out of territories scattered across the world. Atlas Corporate Services operated from Dubai and the Seychelles with six sham directors purportedly controlling more than 5,400 international companies.
Another pair of British expats, Sarah and Edward Petre-Mears, appeared to have a global empire of more than 2,250 directorships between them – run, initially, from their home in Sark, and then from a collection of addresses on the tiny Caribbean island of Nevis.
Writing in the Guardian in the wake of the initial findings, and before the latest figures came to light, the business secretary, Vince Cable, warned against the practice of using sham directors based in offshore territories. "[We] must identify and stop the minority who sail too close to the wind in order to protect the UK's reputation as a trusted place to do business," he said. "Becoming a company director carries with it legal responsibilities which, if breached, can result in disqualification, fines and prison.
"Some people think that putting up a straw man as a director makes them immune from the consequences. This is not the case: if you are acting as a director, you are liable."