Tax authority of Denmark has charged Jensby, the former board chairman of bankrupt IT Factory, as well as his wife, with tax evasion. Company’s CEO Stein Bagger fled from authorities in 2008, after it became known that the company received huge profits as a result of a Ponzi scheme. The former chairman has never been accused with regard to the fraud, but Skat now considers that he owes about 440,000 kroner of profits earned from the business and hidden with the British Virgin Islands-registered company.
Jensby reportedly sent money he earned in IT Factory and as head of JMI Invest to his own company Troya Private Equities Inc., based in the British Virgin Islands. Commenting this fact, Jensby said he had possibly been the victim of identity theft. Jensby admitted that Skat was pursuing a case against him, but would not provide any further comments. However, he could not agree with Skat’s interpretation of the issue.
Last week, Russian state-owned enterprise Rosneft had to pay US$430 million to Yukos Capital, in compliance with the Dutch court’s decision. Russian oil company had to pay this sum to the former subsidiary of Yukos after the court denied it the right to appeal the case two months ago.
The arbitration awards paid by Rosneft are related to loans Yukos Capital made to Yuganskneftegaz in 2004, which were subsequently defaulted upon. YNG, the principal production subsidiary of Yukos Oil Company, was acquired by Rosneft in 2004.
However, Rosneft informed in a press release on its intention to get back control over the $430 million paid to Yukos Capital as a result of a long-lasting lawsuit between the companies. The state-owned company said that this sum is actually owed to companies registered in the British Virgin Islands. These companies are involved in lawsuits against Yukos Capital, and Rosneft claims its ownership over them and their assets. Also, the company noted that Yukos Capital managers had pledged not dusburse the funds received, until final decision concerning ownership of the BVI companies.
According to Yukos Capital, the court did not recognize Rosneft’s ownership over the British Virgin Islands companies.
Cool-er device of the British Virgin Islands-registered company Interead, which has received a winding up order a month ago by the high court in Liverpool, UK, is still sold by companies Argos and Tesco. The businessman behind the company Neil Jones is running Coolerbooks.com, which sells e-books from the Cool-er and other electronic readers, but is owned by a separate company, registered in the British Virgin Islands and called Interead.com. This firm was put into liquidation on June 8, however, the companies Argos and Tesco are continuing to sell the device, and the customers are not informed about the problems in the firm.
According to Argos, they took a commercial decision to phase out this product range, because they no longer have active working relationship with this supplier and were unaware of the suggested recent developments in this business.
The Guardian claims that the founder of the BVI company Neil Jones has “told friends he is the firm’s biggest creditor, claiming to have put about $1m (£660,000) into the business”.
Also, Interead has not filed any accounts and is being wound up following an outstanding claim from public relations advisers.
According to Indian press, the person accused of the so called Satyam scam, B. Ramalinga Raju, had moved Rs 26 crore to around six companies in the British Virgin Islands. The Central Bureau of Investigation (CBI) that has found this has sent a rogatory letter to the BVI, and is now waiting a reply. One of CBI officials said that they are to find out why this money was sent to the offshore tax haven.
Upon getting a reply from the British Virgin Islands, CBI will decide on filing a chargesheet regarding fund diversion.
Two oil blocks in eastern Democratic Republic of Congo (DRC), located on the border with Uganda , were sold to the companies registered in the British Virgin Islands and owned by relative of country’s president. The presidential decree, according to which the blocks were awarded to companies Caprikat and Foxwhelp, was published on June 22, 2010.
However, previously the DRC had signed contracts with two other companies to develop the blocks. After the contracts were awarded to the two new companies, one of the previous companies having contract with DRC, Tullow Oil, has not received presidential decree to begin exploration of its blocks and now is considering to start legal action.
Another company, Divine Inspiration Group (DIG), registered in South Africa, signed a competing contract for block 1 in 2008, and spent about US$4 million in signing bonuses and fees to secure the block. Andrea Brown, the executive director of DIG, said that “the developments with respect to the block 1 contract are not in line with principles of transparency and due process”. This company is going to appeal for compensation, looking forward to constructive engagement with the government on this matter.
The oil blocks have an estimated 2 billion barrels of reserves that have already been discovered. According to the DRC, exploration is to begin in the near future.
Vancouver-based copper miner First Quantum Minerals Ltd. is planning to put the issue on one of the worst expropriations in the Canadian mining sector on the agenda to be discussed at the upcoming G20 summit. Its US$765mln Kolwezi Tailing project in the Democratic Republic of the Congo was sealed off, after the government of CDR claimed that there was violation of Congolese law. There was no explanation provided on this matter. Also other assets of the company in Congo, the Frontier and Lonshi mines, are now under threat.
Instead of negotiating the contract with the Canadian company, the Congolese government signed a joint-venture agreement that gave the rights on the Kolwezi project to the British Virgin Islands-incorporated Highwind Properties Ltd., which is actually not mining company. According to First Quantum president, they were aware of this fact, but they were not aware of the process that was conducted for awarding the contract, or of any tender involving the project.
Sources said that passing the rights to the BVI company is part of a “grab-and-flip” strategy by the government, in which the rights are later sold to a third party, and insiders get profit. Highwind is mentioned in connection with an Israeli businessman Dan Gertler, who conducts business in the Congo. He is famous for his top-level government ties, and is known to control a large number of companies.
First Quantum not only lost the project, it was also ordered to pay a US$12-billion fine by a DRC court. Investors now place almost no value on the company’s Congo assets. The Canadian company has taken the case to international arbitration court.
In the case of an Australian actor Paul Hogan, who had already been accused of defrauding the tax office by establishing loan scheme with an offshore company GB Film Finance registered in the British Virgin Islands, new allegations appeared against him and his advisers who “had the intention of breaching tax laws.” According to documents that were made public by the High Court, Hogan and his advisers concealed information from the tax office, failed to declare income and misled tax officials about his residence. The documents containing allegations and made by the Australian Crime Commission are to be used in a case against Hogan.
The documents include detailed tax advice from Ernst & Young on how the actor could minimize tax by moving tens of millions of dollars between companies and family trusts in US and Australia. The ACC alleges that Hogan’s advisers, on his behalf, “concealed relevant matters” from the Australian Tax Office, including the fact that Hogan was half-owner of the British Virgin Islands-registered offshore companies GB Film and Trelene Investments. According to the ACC, he failed to tell the taxman about a $US5 mln payment from Trelene; also, he avoided tax by failing to declare as income a $US4mln loan from GB Film. The ACC alleges that he even claimed a tax deduction on the US$910,000 in interest he paid the company.
The panel that was set up in March 2010 by Nigerian President to probe the most prospective purchasers of former Nigerian state telecommunications monopolist Nitel, has submitted its report on these two companies to the president and is waiting for further directions.
There were some doubts about the financial backers of a US$2.5 million preferred bid approved by the Bureau for Public Enterprises (BPE) – this was five times more than some industry analysts said it was worth. This bid was done by the New Generation consortium including China Unicom, China’s second-biggest carrier, Dubai company Minerva and local firm GiCell. Another company investigated was British Virgin Islands-registered consortium Omen International – a reserved bidder with a US$956 million offer.
In case the probe of the BVI and Chinese consortia would show the two bidders were unable to stump up the funds for their offer prices. BPE spokesman Chukwuma Nwoko said that there were issues arising from both of the bidders sharing the same technical partner.
According to some sources, there were two options in the panel’s report – the first that New Generation be allowed to pay a US$750 million deposit in the next 10 days, the second that negotiations should take place with the second and third reserve bidders (including the BVI company).
The investors in the ARP Growth fund formally received a nil valuation of their investments, and now the losses from the fund’s manager Trio Capital Limited are to exceed US$180mln.
The administrators of Trio Capital Limited, the accounting group PPB, were investigating company’s managed investment schemes, and in a meeting in Sydney on May 23 informed that they were unable to value the main investment vehicle of the ARP fund, British Virgin Islands-registered Professional Pensions ARP Ltd (PPARP), through which more than US$52mln were invested. By words of unit holder, Mr. Terry Gammell, the delay in finding any value in PPARP meant the ASIC should examine the disappearance of the money.
The nil valuation of PPARP adds to the disappearance of US$123mln invested by another fund managed by Trio Capital, Astarra Strategic. This investment, made through another BVI company EMA International, brought likely losses from Trio Capital to more than US$180mln. By order of NSW Supreme Court, five Trio Capital funds, including ARP Growth and Astarra Strategic, were winded up. The judge found that Astarra Strategic had signs of a “fraudulent scam”, and he also said there were “inherent vices” in Trio Capital’s business model.
The administrators are awaiting the appointment of a liquidator in the British Virgin Islands, PricewaterhouseCoopers, to attempt to recover some value from the PPARP investment, which was held through a complicated structure, using also a HK-based Empyreal Holdings as funds manager.
Fuqi International, Inc., a Chinese designer of precious metal jewelry, selling a wide range of products in the Chinese luxury goods market, and having a British Virgin Islands-registered subsidiary Fuqi International Holdings Co., Ltd., has been filed additional lawsuit. Murray, Frank & Sailer LLP is now investigating federal securities claims against Fuqi International, on behalf of all investors who purchased Fuqi common stock in connection with the company’s second public offering on or about July 22, 2009 through early August 2009. In this offering, Fuqi International sold over 5 million shares at US$21.50 per share.
The investigation concerns violations of certain sections under the Securities Act of 1933 through the issuance of materially false and misleading registration statements, prospectus, and other documents which failed to disclose that the company’s wholesale business was slowing. As a result of company’s actions, its financial statements were materially false and misleading at all relevant times.
Murray, Frank & Sailer LLP has already filed the class action against Fuqi International, Inc. in the US District Court for the Southern District of New York, on behalf of all individuals and institutions who purchased publicly traded securities during the period between May 15, 2009 and March 16, 2010, alleging violations of the Securities Exchange Act of 1934.