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Care home company ships profits to Cayman Islands

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A round up of scandals and news of the week. Including the offshore profits of Care homes going offhore and the Tory ministers in the secret CIA think tank
Issue 2785
A graphic of a tax have

Profits head offshore

The private equity owner of HC-One, Britain’s largest care home provider, siphoned £5 million in tax‑free profits to the Cayman Islands while claiming extra ­government support during the pandemic.

The methods involved are legal but highly complex.

A company run by millionaire Saudi Olympic showjumper Kamal Bahamdan owns HC-One–which, has 265 facilities and a bed capacity of 16,116 in England.

Since 2002, he has been at the helm of Bahamdan Group, a global ­investment group with investments in ­telecommunications, education, ­infrastructure and retail in the Middle East and North Africa.

The Bahamdan Group controls Safanad Ltd, of which Bahamdan is also founder and chief executive, and which is the majority owner of HC-One.

According to a report by the Centre for International Corporate Tax Accountability and Research, the companies in the HC-One structure have loaned money to each other via ­complex accounting, with very high ­interest rates.

These high-interest payments reduced taxable profits in Britain and let the company shift money to the Cayman Islands as interest income—where it is tax-free. HC-One stresses it pays full tax in Britain. As the pandemic took hold, HC-One asked councils for financial help. The firm then received £18.9 ­million of taxpayer-funded ­government support.

A private care home director took home 120 times more money than front line staff during the pandemic.

It’s part of a pattern that saw two of the largest care home providers in Britain raise director pay despite ordinary people suffering in the under ­pressure sector.

Research by the i newspaper said that while carers’ pay is frequently around £9-£10 an hour, directors’ salaries run in the hundreds of thousands of pounds, and in some cases even into the millions.

Analysis of Barchester Healthcare’s accounts suggest its highest paid director received 120 times more than care staff employed by the company during 2020.

Care UK’s accounts suggest its highest paid director got paid almost 50 times more than care staff last year.

Tory ministers in secret CIA thinktank

Two current government ministers and two recent justice ministers have been funded by an opaque right wing group that includes spies. The Declassified website says eight current Conservative MPs are associated with the organisation.

The group, known as Le Cercle, was described by former Conservative minister Alan Clark in his diaries as “a right-wing think (or rather thought) tank, funded by the CIA, which churns Cold War concepts around”. Le Cercle has existed since the 1950s but has never revealed its funders. Even the group’s existence is only occasionally disclosed. It is unclear how influential Le Cercle—which is believed to meet twice a year, once in Washington DC and once elsewhere—actually is.

Declassified has found that eight current Conservative parliamentarians are associated with the group.

Two current ministers—business secretary Kwasi Kwarteng and his deputy minister Greg Hands—have been funded by Le Cercle.

Kwarteng was given £5,258 to travel to Bahrain in June 2019 for a trip jointly funded by Le Cercle and the Gulf regime.

Three former justice ministers are associated with the group. David Lidington, the justice secretary from 2017-18, and Crispin Blunt, a justice minister from 2010-12, were previously funded by Le Cercle to attend meetings in Washington DC and Madrid.

Rory Stewart, who served as a justice minister under Theresa May, was previously chair of Le Cercle. Other ministers known to have been funded by the group include William Hague and Labour’s Margaret Beckett.

Sun’s Slack on Tory party

Troublemaker can’t decide why the Sun newspaper was initially reluctant to take up the Downing Street party scandal.

One thought not to be sniffed at is because last December they threw a rather raucous rule breaking event in fake news towers.

Or perhaps it is because the now deputy editor of the Sun is James Slack who was a spokesman for Boris Johnson at the time.

Giant oil firm Trafigura has cashed in on Covid chaos

The oil, gas and metals merchant Trafigura will hand its top traders and executives more than $1 billion (£760 million) after making record profits from the market upheaval during the Covid pandemic. The loot is up 87 percent up on last year.

Ups and downs in the global commodities market helped the company to almost double its net profit to £2.4 billion, the highest in its 28-year history.

Commodity traders have emerged as one of the chief beneficiaries of the tumult in global markets, which has led to record highs in the price for oil, gas and copper. In 2006, a ship Trafigura owned was responsible for dumping toxic waste in Ivory Coast, west Africa.

It then sued people who said it had done so. Many people became sick and at least ten people died. Trafigura paid just £130 million in compensation.

Billionaires push up global inequality

The world’s billionaires grabbed the sharpest rise in their share of wealth last year since the World Inequality Lab began keeping records in 1995, according to a report released last week.

Billionaires saw their net worth grow by more than £2.75 trillion in 2020 alone. Meanwhile, the pandemic has pushed approximately 100 million people into extreme poverty, boosting the global total to 711 million in 2021.

“Global inequalities seem to be about as great today as they were at the peak of western imperialism in the early 20th century,” the study said.

The wealthiest 10 percent of the world’s population takes 52 percent of global income, compared to the 8 percent share of the poorest half.

An individual in the top 10 percent on an average trousers £92,500 a year.

A person from the poorest half earns £2,965 a year.

The poorest half of the world’s population have only 2 percent of the total wealth.

In contrast, the richest 10 percent own 76 percent of all wealth.

The house price boom in Britain during the past two decades has delivered an “unearned, unequal and untaxed windfall” that has benefited richer people the most, according to a new study. House prices have risen 86 percent above inflation since 2000, delivering a capital gain on homeowners’ main residences worth £3 trillion, according to research by the Resolution Foundation. The figure equates to a fifth of all wealth in Britain. The study found the trend was “amplified” by the pandemic.

Un-policed and unenforced anti-corruption laws have made Britain the global money laundering capital for a post-Soviet Union elite, says a report from the thinktank Chatham House. The report highlights the adoption of only four “unexplained wealth orders” (UWO) since the measure was introduced with fanfare in the Criminal Finances Act 2017. A UWO allows for assets to be seized. None have been issued since 2019.

‘The prime minister will not have lied about any parties’

Tory chief whip Mark Spencer

‘It was huge, there must have been 40 to 50 people. It was really bad.’

One Number 10 official on the party that didn’t happen

‘Respecting the lockdown rules’

Education Secretary Nadhim Zahawi gets the short straw and tours the TV studios to tell people Boris Johnson has done nothing wrong

‘It wasn’t a formal party but perhaps in hindsight it wasn’t the most sensible thing to do’

Spokesperson for Rishi Sunak denies they had a party at their party in the Treasury

‘Shamefully frivolous, vengeful and partisan’

Boris Johnson is convinced all his troubles are because the BBC is biased against the government

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