A Dutch group of prominent figures in the business world has invested for years through a tax haven. Among others, Chairman of the Board Tom de Swaan of ABN Amro and outgoing Minister of Finance Wopke Hoekstra, still a consultant at McKinsey at the time of investing, are or were co-owners of a letterbox company located in the British Virgin Islands. This is evident from the Sunday published Pandora Papers, a study by the collective International Consortium of Investigative Journalists (ICIJ), which includes the The Financial Times and Fidelity be part of.
The club invested millions of euros in for-profit safari parks in Tanzania and Kenya. A trust office on the British Isle of Man manages the letterbox company in the British Virgin Islands that is used for this purpose. According to the investigation, Hoekstra sold his share in the investment, worth around 26,500 euros, a week before he took office as Minister of Finance in 2017.
In a response to the research collective, Hoekstra said he never knew who the co-owners of the letterbox company were, nor that it was located in the Caribbean. The return he got on the investment, about 18 percent, he would have donated to charity.
Chairman of the Supervisory Board of ABN Amro De Swaan would currently still invest via the letterbox company, as would Supervisory Board members Maarten Muller of Van Lanschot Kempen and Alexandra Schaapveld of the French bank Société Générale. Until March 2020, Schaapveld was also a supervisor at the Financing Company for Developing Countries, the Dutch development bank in which the state has a majority stake.
Investing in tax havens is legally permitted and the collective has not found evidence of tax avoidance by the Dutch businessmen. Nevertheless, according to several professors who spoke to the newspapers, it is undesirable for high-ranking bankers to invest in tax havens. “It is clear and obvious: if you have an interest in a tax haven and you have to decide on the bank’s policy on tax havens, then there is (the appearance of) a conflict of interest,” says Leo Huberts, emeritus professor of public administration. FD and Fidelity.
Investing through tax havens is often done through trust offices that specialize in setting up financial and legal structures, where it is difficult to find out who owns the assets deposited there. Such offshore structures are often intended to pay little tax and are not by definition punishable. Yet they are often used to disguise wealth and to make black money disappear – which is punishable by law.
Investigative collective ICIJ looked at nearly twelve million tax documents from around the world, including leaked emails, registration forms and contracts. Documents from other tax havens, such as the Seychelles and Panama, were also examined. Worldwide, 600 journalists from 115 countries examined the documents.
The same research collective is known for the 2016 published Panama Papers. It was revealed through which constructions the money of the rich and powerful of the earth flowed. Many banks decided to ban investing in letterbox companies in tax havens after the publication of the Panama Papers.