In summer 2006, a BVI film production company Wise Giant received funds from NZ Venture Investment Agency.
The New Zealand Government’ Venture Investment Fund (NZVIF) contributed a 1/3 of USD 1 million venture capital investment in a British Virgin Islands-registered production company Wise Giant owned by an unnamed Auckland firm. NZVIF backs Investment and fund management company iGlobe Treasury Management and puts in USD 1 for every USD 2 of private capital raised by it.
IGlobe having a majority stake in Wise Giant refused to name the Auckland animation firm behind it not to risk the commercial prospects of the animation firm.
The Representatives of the National party require the name of the Auckland firm should be disclosed to have an accountable and transparent process when dealing with public money.
They also do not consider the reasons of unreleasing the company name to be convincing enough as well as have questions regarding the British Virgin Islands’ domicile instead of New Zealand’s, for which the only reason of having an offshore company in a tax haven they can see is avoiding paying tax.
IGlobe claims the company was registered in the BVI because media companies prefer signing contracts in neutral countries.
The Jakarta Stock Exchange (JSX) has made an inquiry to PT Energi Meda Persada, to disclose full information required for investors to know about the company’s divestment of its wholly owned unit Lapindo Brantas Inc. to Freehold Group Ltd., a company incorporated in the British Virgin Islands. Information about company’s signing sale and purchase agreement was given in the latest development of PT Energi.
PT Energi has said that BVI-based Freehold is an independent third party, not affiliated with Bakrie Group, its controlling shareholder, and the sale does not need approval either from minority shareholders or from the capital market regulator. However, JSX president Erry Firmansyah said that the JSX can’t properly judge whether or not the divestment needs shareholder approval until Energi has disclosed complete information about the transaction, including its amount and the name of the ultimate main shareholder of Freehold.
PT Lapindo Brantas is the operator of a gas well in East Java, which has been spewing mud since last May over nearby villages and agricultural territory, and forcing thousands people to leave their land. Another Indonesian oil exploration firm PT Medco Energi International Tbk has filed a complaint against PT Lapindo, which resulted in the firm facing a hefty compensation bill.
However, on Friday Medco Energi informed about its wish to settle differences with its partner over a troubled oil block in East Java outside an arbitration panel. Medco is seeking to relieve itself of any financial costs stemming from the drilling accident by filing the complaint under an agreement for arbitration to be done by a US arbitration court. It was said by Hilmi Panigoro that Energi Mega’s decision to divest its stake into BVI-based company would not affect the whole case.
It has already been discussed previously that lawyers and taxmen insisted on the taxation of capital gains realized from the transactions connected with Temasek Holdings - Shin Corporation and BVI-registered Ample Rich Investments Co Ltd. and that the Shin investigation revealed a complex web of share transactions between the children of Thai Prime Minister Thaksin Shinawatra that involved holding the British Virgin Islands - registered companies. Now, the public witnesses ever new development of the story.
All Shin Corp share transfers over the past 10 years will be traced by the assets scrutiny committee that will look for all possible cases of tax evasion. Let me remind you that in 1999, 11.87% of Shin Corp was purchased by Ample Rich – a holding company established in the BVI and headquartered in Singapore. Ample Rich was suspected of being set up as an offshore holding company to minimize tax liabilities for the Shinawatra family, the founders of Shin Corp. So, the decision of the assets scrutiny followed decision of the Revenue Department to collect income tax from the huge profits earned by which the Shinawatra siblings from the sale of shares in Shin Corp to Temasek Holdings of Singapore via a BVI- registered Ample Rich.
The matter is urgent because of the fact that the statute of limitations on tax liabilities will be waived after a decade. The matter is also complicated because of the complex and tricky way the company did business. It is necessary to investigate every share transfer thoroughly in order to find out if its price was reasonable. All the cases will be carefully looked through.
Now the directors of Ample Rich are liable to pay tax on the difference between the price they paid for the shares and their actual the market price. Therefore, on November 6, 2006, the children of Thaksin were informed by the department that they were liable to pay tax on the difference between buying 329.2 million shares from Ample Rich at 1 baht per share and selling them to Temasek at 49.25 baht per share. Both could be forced to pay tax as well as interest of more than 11 billion baht.
Finance Minister said he sue a finance official who reportedly assured the Shinawatras that they were not liable to income tax if buying Shin Corp shares from Ample Rich through the stock exchange. Thaksin’s children are also claiming a misunderstanding and blaming their advisers.
On October 16, 2006 the BVI Government warned the public on Royal Dominion to protect it from potential misunderstanding or possible scams. The complete statement is posted on the BVI Financial Services Comission website.
The website royaldominion.vg attracted attention to the BVI Government for pretending that sales are sanctioned by the Government of the BVI. But the Government, actually, has no association with Royal Dominion and does not empower the site to sell “honorary knighthoods†or other product.
It is obviously, that the way the information is posted on the Royal Dominion’s site with the usage of the flag, Her Majesty’s picture and other BVI symbols could be deceptive or even denigratory advertising or a scam. Since the statement by the BVI Government i.e. after about a month, no changes have been applied to the website design and state symbols are still being used.
Still, both the statement and the investigation, which is in the process now, suggest that the BVI Government will not let somebody violate the law and make a fortune behind its back. But let us see how this story develops. So, to be continued.
If you have obtained “honorary knighthoods†from Royal Dominion or you have some valuable information on inquiry on this subject, you can contact Attorney General’s Office of the British Virgin Islands as it is stated in the BVI government’s statement.