It’s just been brought to my attention that the Electoral Commission may be investigating the purchase and sale of the Tory’s former headquarters in Smith Square after a Lib Dem Peer, Lord Oakeshott, questioned whether the transaction contains what would be, in effect, a £4.9 million anonymous donation into party coffers.
So far as I understand the transaction, the Tories held a lease on its Smith Square premises valued at £10 million and, in March 2006, purchased the freehold on those premises, together with that of a second property in nearby Tufton Square, at a cost of £15.6 million.
This deal was, however, rather more complicated than your average property transaction as it was conducted through a Tory-owned subsidiary, C&UCO Properties Ltd, which acquired the freehold by taking over its previous owner, Platinum Overseas Holdings, which was registered in the British Virgin Islands.
Remarkably, when quizzed by the Electoral Commission about this transaction, last September, the Tories claimed that they had no idea who the owners of Platinum Overseas Holdings actually were when they took over the company.
The Tories have since sold the two properties to an Irish property company, Harcourt Developments, for £30.5 million, netting them a total profit on the deal of £4.9 million in less than a year.
The Lib Dems have repeatedly claimed that that the deal under which the Tories acquired Platinum Overseas Holdings undervalued the properties by at least £4 million, but Lord Oakeshott, who manages a property investment company, has claimed that the true market value if the freeholds should have been at least £25million and has apparently written to the Electoral Commission raising concerns concerns about the transaction.
The Sunday Telegraph also revealed, last September, that the manner in which the deal was structured enable the Tories to avoid paying stamp duty on the purchase, saving them £625,000 in tax and that they have kept Platinum Overseas Holdings offshore, since purchasing the company, on the pretext that they intend to sell the company - quite what there is to sell, having disposed of its primary assets is unclear.
To add further a little further intrigue, when questioned about the transaction, Tory Party Chairman, Francis Maude, claimed that the sale of Platinum was conducted by Citigroup - however the Telegraph claimed in the same article that sources at the bank were unaware of the existence of this transaction.
Give Paul Staines’s recent obsession with the word
Sith Smith, you might have thought that the scent of a possible financial scandal in major political party that involves tax avoidance, dodgy property deals, undeclared anonymous donations and offshore companies would be right up his street, and yet all he’s had to say on the subject is…
Tories Sell Old Smith Square HQ for £30m
So that leaves the Tory party virtually debt-free, whereas Labour are bordering on insolvent and barely able to afford holding a leadership election, never mind a general election.
Can Gordon get his mate Ronnie “PFI” Cohen [pictured] to cough up some of his profits for the party?
Maybe Paul could offer some expertise of offshoring and tax avoidance instead?
He is, apparently, well versed in such matters.
Posted by Unity on 23 Feb 2007 at 16:10 pm