It’s safe to say offshore company structures have become a hulking presence in divorce cases brought before English courts, practically inspiring their own legal revolution.
In the High Court judgment in M v M and Barkov and others, ‘hulking’ becomes an understatement: Read more
Compare (Reuters, March 25):
“It was made clear to our Latvian friends that if they want to join the euro, they should not provide a haven for Russian money exiting Cyprus,” a euro zone central banker said.
Contrast (Mr Kristaps Zakulis — financial regulator, Riga, April 24): Read more
It’s an indirect path from one to the other.
Gawker on Thursday unloaded some 950 pages of filings from Bain Capital-affiliated offshore funds in which Mitt Romney has invested his fortunes over the years. We’re still reading through the docs, though Dan Primack (who’s already read through them) thinks there’s not much to the issue. Read more
Just a quick shout-out for Bloomberg News reporters’ exhaustive dive into the wealth (some $136m accounted for) of the clan of Bo Xilai, the fallen Chongqing politician:
Bo Xilai’s relatives built their assets in a nation where per-capita income ranks 121st out of 215 countries, according to the World Bank. They set up offshore companies and used multiple names, making it more difficult to track their titles and business dealings. Companies in Dalian and Chongqing, where Bo Xilai held office, were among the beneficiaries of their investments, corporate filings in Hong Kong and the U.S. show… Read more
The SEC has pushed companies,including Dow Chemical, Fortune Brands, Caterpillar and CIT to increase the information they provide to investors about overseas earnings and cash, according to the FT. Regulators have acted after increased scrutiny of offshore cash at Microsoft and Google in recent months. While the SEC lacks a rule to enforce offshore disclosures, the agency can use public comment letters to raise the issue. Corporate recourse to offshore cash has been thrown into the spotlight after firms lobbied the White House for a repatriation tax break on their overseas income, in addition to the issue of “trapped cash” on balance sheets.
Three former Credit Suisse bankers and a Swiss financier have been charged with conspiring to defraud the US, part of a multi-pronged crackdown by US authorities on offshore tax evasion, the FT reports. The US justice department and the Internal Revenue Service said on Thursday that Markus Walder, former head of North America offshore banking and two other ex-Credit Suisse bankers, Susanne Ruegg Meier and Andreas Bachmann, were charged along with Josef Dorig, the founder of a Swiss trust company. All four, none of whom is in custody, were accused of “illegal cross-border banking that was designed to assist US customers evade income their taxes by opening and maintaining secret bank accounts at the bank and other Swiss banks”. A spokewoman for Credit Suisse declined to comment on whether it still employed any of the bankers, Reuters reports, but said it was “committed to a fully compliant cross-border business. Subject to our Swiss legal obligations and throughout this process we will continue to cooperate with the US authorities in an effort to resolve these matters.”
The Globe and Mail on Sino-Forest, June 20:
Its corporate structure has opened Sino-Forest up to criticism that it is too opaque. The company has scores of subsidiaries in China and offshore locations such as the British Virgin Islands. It has refused to disclose the names or locations of the customers who buy its standing timber, saying it doesn’t want to reveal the identity of its customers for competitive reasons… Read more
The SEC pressed Microsoft to disclose its foreign tax holdings earlier this year, forcing it to reveal that most of its $50.2bn in cash is held abroad in filings revealed on Monday, the FT reports. The regulator had questioned what it termed the ‘disproportionate’ share of the company’s profit – 62 per cent – generated by certain low-tax jurisdictions, despite a smaller share of its international revenues. Microsoft responded that it had benefited from channelling sales through tax havens including Ireland, Singapore and Puerto Rico. Regulators also challenged Microsoft’s need for bond issuance, with the company countering that it was taking advantage of liquidity.
Cyprus is one of the weirder cases of this disease Europe has called ‘Greek exposure’. Tiny sovereign debt, big bank gearing to Greece. All wrapped up in a web of offshore deposits.
Fitch cut the sovereign rating of Cyprus to A- from AA- on Tuesday (in line with S&P and Moody’s, but a large downgrade: two notches) based on Greece exposure. Read more