Sunday, 15 May 2016

Panama Papers reveal tangled offshore web

EXCLUSIVE by Our Investigations Unit

New Earth Solutions (Scottish Borders) Ltd., the so-named special vehicle set up to develop and deliver a £21 million waste treatment facility for Scottish Borders Council can now be linked to at least six offshore entities in the British Virgin Islands, with Panamanian law firm Mossack Fonseca identified as agents in each case.

A searchable internet database featuring details from over 11 million confidential documents leaked to the International Consortium of Investigative Journalists [ICIJ] is now available for public scrutiny for the first time. It contains the names of shareholders, investors, intermediaries and owners of tens of thousands of companies registered in tax havens around the world.

The so-called Panama Papers from the files of Mossack Fonseca are revealing the special arrangements made by wealthy and powerful individuals and corporations to keep their financial arrangements top secret. But, as the ICIJ points out, ownership of or involvement in an offshore firm does not necessarily involve wrongdoing, and the practice is perfectly legal.

Research by Not Just Sheep & Rugby has concentrated on the Premier Group (Isle of Man) Ltd. whose directors include David Whitaker and Michael Richardson. The Group controls or manages an extensive range of businesses and investment funds with a stake in New Earth Solutions Group, the contractors chosen by Borders councillors in March/April 2011 to provide waste treatment services.

Mr Whitaker was appointed as a director of New Earth Solutions (Scottish Borders) on April 15 2011, ten days after the firm was incorporated (set up). He served in that capacity for four and a half years until his resignation in November 2015 following the total collapse of the Scottish Borders contract.

Premier Group also runs the New Earth Recycling & Renewables [Infrastructure] fund (NERR), the outfit selected to finance a waste processing plant at Easter Langlee, but which was unable to come up with the cash.

The leaked Panama Papers show Premier Group acts as direct intermediaries for four separate offshore entities, all of them established long before the deal was signed between NES Group and SBC.

The vast ICIJ dossier names the BVI "businesses" as Projected Solutions Inc. (incorporated 2009), International Product Distribution Inc. (2002), Premier Group Distribution Inc. (2009) and Premier International Distribution Inc. (2005). In each case Mr.Richardson and Mr Whitaker are named as beneficiaries or shareholders. There are between a dozen and 60 shareholders in these firms.

Mr Richardson also has shares in Premier Balanced Distribution Inc. (2004) and Premier Property Distribution Inc. (2002), also based in BVI.

Premier Group (IOM) was contacted on May 11 and was asked to outline the nature of these offshore companies, what purpose they serve, and what impact or influence they have on the New Earth Recycling & Renewables (Infrastructure) Fund and on New Earth Solutions Group. To date there has been no response.

As we reported last week, Mr Richardson has just circulated investors in NERR with an update on the troubled fund's latest position, and with details of the continuing efforts to reshape New Earth Solutions.

The new missive issued from the Isle of Man says negotiations have been continuing on the restructuring of the waste business of the NES Group. These include talks with a potential 'developer' of large combined heat and power plants in Europe who might take the solid substances produced at NES conventional treatment centres.

But the activities of those offshore entities remain shrouded in mystery as does much of Scottish Borders Council's disastrous and costly involvement with NES and NERR.

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