Print Published 6th Nov 2017, 16:45

Lord Ashcroft’s Jaywing shareholding in the spotlight

Lord Ashcroft’s 24.6% shareholding in the AIM listed marketing, analytics and risk management agency Jaywing has come under the spotlight after the former Conservative Party treasurer was identified in documents (the Paradise Papers) obtained by the German newspaper Süddeutsche Zeitung as one of a number of wealthy individuals who have made use of tax havens.

As previously reported in Marketing Services Financial Intelligence, Lord Ashcroft acquired some or all of his stake in Jaywing via shares he originally held in a company called Seashell II located in the tax haven of Belize that was listed on AIM at the time.

While Lord Ashcroft had a significant share interest in Seashell II, it entered into a merger arrangement that was a key component of the initial launch of Jaywing as a public company, then known as Digital Marketing Group (see DMG reports a maiden loss but profit margins look promising).

As part of that merger deal, carried out under Belize law, the newly incorporated Digital Marketing Group merged with cash-rich Seashell II and issued shares to former Seashell II shareholders (giving Lord Ashcroft a 13.8% interest).  Another Ashcroft-related company – called Mayfair and believed to be based in Bermuda – subscribed for additional shares and became a substantial shareholder in Jaywing. (The only company called Mayfair Ltd that is registered in the United Kingdom is a small business owned by the Kapur family with no obvious connection with Lord Ashcroft and located in north London.)

Jaywing did not respond to a request to confirm that Ashcroft’s shares are still held via a tax haven.

Ian Robinson, a business associate of Lord Ashcroft, is deputy chairman of Jaywing (see Ashcroft associate assumes chairmanship of Jaywing). Among other boards on which Robinson sits is the public company Gusbourne in which Lord Ashcroft holds 72% of the shares.

Other companies engaged in the marketing sector that have past or present associations with tax havens include Accenture which is registered in Ireland after moving there from Bermuda in 2009, Crossrider (incorporated in the Isle of Man), DBA Advisors (the Isle of Man parent company of the former Creston with directors in the Isle of Man and Monaco), and two Jersey-based Communisis shareholders associated with Richard Griffiths (see Should HMRC do business with a company part owned in a tax haven?).

Even WPP moved its head office to Ireland in 2008 for tax reasons but later returned to the UK when the Government here softened its attitude towards the taxation of foreign subsidiaries (see Jersey Court approves UK tax rehabilitation of WPP).