21 May 2018

UK: Countering Russian corruption is a national security priority, say Committee

The UK must get serious about confronting the full spectrum of President Putin’s offensive measures.

The robust rhetoric from the Prime Minister following the attempted murder of Sergei Skripal and his daughter has been undermined by the ‘business as usual’ sign hanging on the UK’s front door, says a new Report from the Foreign Affairs Committee.

Published today, Moscow’s Gold: Russian Corruption in the UK, says the use of London as a base for the corrupt assets of Kremlin-connected individuals is now linked to a wider Russia strategy with implications for the UK’s national security.

Tackling this should be a major priority for the UK’s foreign policy, says the Committee. There is a direct relationship between this wealth and the ability of President Putin to execute his aggressive foreign policy and domestic agenda.

Chair's comments

Chair of the Committee, Tom Tugendhat MP, said:

"The scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transaction in the City. There is no excuse for the UK to turn a blind eye as President Putin’s kleptocrats and human rights abusers use money laundered through London to corrupt our friends, weaken our alliances, and erode faith in our institutions.

"As the 2018 National Security Capability Review made clear, money laundering is a foreign policy issue as it affects our national security. Today, we make recommendations to Government with the aim of hitting Kremlin-linked individuals in their pockets and levering pressure on the regime.

"We can no longer allow ‘business as usual’. The UK must be clear that the corruption stemming from the Kremlin is no longer welcome in our markets and we will act. We must be united in our efforts to match rhetoric with action – in the City, through Government policy and among allies in the US, G7 and EU. We call on the Foreign and Commonwealth Office to set out a coherent strategy on Russia that clearly links together the diplomatic, military and financial tools that the UK can use to counter Russian state aggression."

Committee recommendations

In order to exert maximum financial and economic leverage, the Committee recommended the Government should:
  • Close the gaps in the sanctions regime that have seen companies use London markets but be sanctioned in other jurisdictions;
  • Close the loopholes that allow debt issuance be used to go around sanctions;
  • Extend sanctions to target more individuals who are closely linked to President Putin’s regime, including by using the Magnitsky powers set out in the Sanctions and Anti-Money Laundering Bill; and
  • Crack down harder on illegal money-laundering by speeding up plans to promote transparency of corporate ownerships.

18 May 2018

Carving up a Business Empire Through Tax Havens: The Ambani Way

The network of offshore companies and Swiss bank accounts that were used to divide Dhirubhai Ambani’s foreign assets after his death is being probed by the income tax authorities; a company crucial to the network was MoTech Software.

17 May 2018

FSDEA Legal Proceedings Accelerating Value Destruction of the Angolan People’s Investment Portfolio

Quantum Global Group today provided an update on the destruction in value to the investment portfolio managed on behalf of the Fundo Soberano de Angola (FSDEA).  The group also reiterated its desire to negotiate a settlement to the contract dispute in a professional manner, something the administration of the FSDEA does not seem to want.

The money invested in more than a dozen businesses across Angola and Sub-Saharan Africa have created hundreds of jobs and generated wealth for communities across the continent. This value is being progressively destroyed due to the FSDEA’s aggessive legal strategy and continued refusal to negotiate in good faith and conclude a settlement to what is essentially a contract dispute.

By continuing to resort to misconceived legal proceedings in Mauritius and the UK, the FSDEA is destroying value in their own investments. The portfolio companies cannot pay salaries, maintain operations, fulfil contract obligations to fund construction of new buildings or pay taxes or legal bills. Specific destructive outcomes include the following:
  • Illegal logging is expected to start immediately at Estrela da Floresta forest concessions without a management team in place
  • New plantations are already burning in the dry season due to a lack of local Angolan employee management
  • Without a management team in place, Fazangola farms cannot guarantee the harvest can be done at this critical point in the season
  • Angolan Fazangola workers will not be paid, depriving them of their livelihood and ability to support their families
  • The main contractor in the refurbishment of the Lusaka Intercontinental Hotel has stopped the redevelopment project exposing the Hotel Fund to significant legal liabilities
  • Several small Angolan businesses providing services to portfolio companies have not been paid
  • Ultimately, it is the Angolan people who are being hurt the most as they are the owners of the investment portfolio and the ones who were feeling the benefits of these investments through local employment, which is being impacted by the legal approach of the FSDEA.
Quantum Global will continue to defend its reputation against the unwarranted assaults through legal proceedings in Mauritius and the UK. But at the same time, the group looks forward to resolving this contractual dispute in a professional manner.

16 May 2018

Dawood Rawat v Mauritius: Dual-national claim dismissed based on treaty context interpretation

On 6 April 2018, a Tribunal constituted under the UNCITRAL Arbitration Rules rendered an Award on Jurisdiction in the case Dawood Rawat v. The Republic of Mauritius (PCA Case 2016-20).  Following a thorough analysis of the interpretation of the 1973 Investment Protection Treaty between the Republic of France and Mauritius (the “France-Mauritius BIT” or the “Treaty”), the Tribunal denied protection of the relevant investment protection treaty to a dual national – a French-Mauritian businessman – despite the treaty was silent on its application to dual nationals.  This approach was contrary to prior investment treaty decisions, such as Serafín García Armas and other v Venezuela, in which tribunals have rejected jurisdictional objections brought by respondent states where relevant the bilateral investment treaty (“BIT”) was silent on the exclusion of dual nationals.

15 May 2018

Thomson Reuters Harnesses Artificial Intelligence to Filter Media Content in Fight Against Financial Crime

Thomson Reuters has enhanced its World-Check One platform with the launch of Media Check, a unique media screening and processing feature powered by artificial intelligence (AI) that helps address the regulatory and reputational consequences of overlooking key data in the fight against financial crime. Media Check’s machine learning capability increases efficiency by filtering unstructured content from over 11,000 global print and web sources, giving financial institutions more accurate and relevant data faster.  

Thomson Reuters is committed to innovative solutions to assist its customers in the global fight against financial crime, and alleviate the considerable challenges associated with risk screening.

Institutions need to digest an increasing amount of relevant information to help prevent financial crime. The next-generation AI technology in Media Check lets them navigate this crowded environment to help comply with regulatory and other requirements and avoid the reputational risk of missing critical information that could result in criminal activity,” said Phil Cotter, Managing Director, Risk Segment, Thomson Reuters. “Adding a machine learning dimension to our World-Check One platform gives clients an exceptional means to help pinpoint the most relevant media information, thereby maximizing the efficiency of their due-diligence processes."

World-Check One’s Media Check has many benefits that include enhanced compliance workflow, and the assurance that only relevant content is presented to compliance professionals.  This is achieved through intelligent searching, a unique AML taxonomy informed by 15 years of industry leading World-Check experience, and machine learning algorithms honed by the World-Check research team.  The result is a reduction in false positives and improved content navigation leading to better and more informed decision-making. Media Check also provides continuous, up-to-date media and data monitoring.

Nespresso On Ice Limited Edition Italian Summer Duo

Discover the two Limited Edition coffees developed by Nespresso for the preparation of Italian iced coffee recipes: Ispirazione Salentina and Ispirazione Shakerato.

Ispirazione Salentina

A tribute to the Ispirazione Salentina, an iced coffee recipe from the south of Italy, this blend is a bold, balanced coffee with a smooth and round texture, nutty aromas and typical Robusta notes. When prepared with cane sugar syrup, ice and almond milk, it gives a refreshing drink with a sweet taste and a creamy texture.

Origin

Arabica and Robusta coffees from Uganda, Ethiopia, amongst other origins.

Roasting

The Arabicas and the Robusta are roasted separately. The Arabicas are long roasted at a medium to dark color. The Robusta is dark roasted for a shorter time in order to preserve all its aromas. All the coffees composing the blend are coarsely ground in order to allow a good mix and achieve an optimal homogeneity in the final iced coffee recipe.

Aromatic Profile

A bold, balanced coffee with a smooth and round texture, nutty aromas and typical Robusta notes

Ispirazione Shakerato

A tribute to the Ispirazione Shakerato, a famous iced coffee recipe from Italy, this blend is a straight, intense coffee with cocoa and spicy aromas together with a roasted finish. When prepared in a shaker with ice and sugar, it gives a powerful and smooth, full-bodied iced coffee topped with an indulgent foam.

Origin

Arabica coffee from Guatemala, Ethiopia, amongst other origins.

Roasting

The origins are roasted in different splits, at the same temperature, yet during different durations to deliver rich aromas, a specific structure, more texture and body. All the coffees composing the blend are coarsely ground in order to allow an optimal homogeneity in the final iced coffee recipe.

Aromatic Profile

A straight, intense coffee with cocoa and spicy aromas together with a roasted finish.

Nespresso - Explorations 2018: Galapagos Santa Cruz

Meet Galapagos Santa Cruz, our experts' Pick of the Year. The next edition of EXPLORATIONS took us to a low-lying volcanic island in the exotic Galapagos where an unusual microclimate and an extraordinary ecosystem combine to create a sweet cereal espresso as surprising as the land itself. What else would you expect from somewhere unlike anywhere else on earth?

An Unlikely Home For Coffee

It’s often in the most unexpected places that you find the most wondrous things. Coffee growing and high, ancient lands go hand in hand, so when we got the opportunity to sample a coffee thriving on Santa Cruz, a relatively young island in the low-lying Galapagos, we put the rule book to one side and packed our bags.

Rich, Fertile Soil Born From Volcanoes

Formed from erupting volcanic lava, the whole island is brimming with rich nutrients – from an extraordinary soil unlike most coffee growing places on earth. With over 80% of the Galapagos being a nature reserve, only very few places are allowed to carefully cultivate the land, making this rare coffee even more special, don’t you think?

Unseen Forces Collide

We all know that opposites attract and in the Galapagos, we see this first hand with two opposing ocean currents meeting to create something truly spectacular.

First, the hot climate is cooled by the Humboldt Current, flowing north along the coast of South America and via Peru. Then, the Cromwell Current flowing down from the north arrives carrying oxygen and nutrient-rich waters with it.

Where The Unusual Is The Norm

These two forces fuse and a special microclimate and prosperous land explodes. In the creation of this Arabica coffee, every one of mother nature’s wondrous elements joins together and allows coffee beans to grow in the most surprising of places.

Breaking The Rules Of Coffee

It’s widely accepted within the coffee world that the higher the altitude, the better the coffee quality. But Santa Cruz rolls its eyes at this. Imagine a coffee that tastes and roasts just like its high-altitude cousins from the Americas.

However, instead of the plants growing upwards from the lofty heights of 4,000 feet, they’re flourishing surprisingly low down at about 650 feet.

A Unique Microclimate Lets Coffee Plants Flourish At Low Altitude

Take the island’s unique cocktail of sunlight, rain and the mix of sea temperatures and you have beans that ripen slower developing more sugars and the potential for in-cup complexity. Paired with the careful picking and wet-processing and you’ve got a rounded, full bodied espresso. A split, medium roast brings sweet cereal and biscuit notes that’s surprising for the place where it grows. Meet Galapagos Santa Cruz, the coffee from an island that flies in the face of the usual.

Growing In Perfect Harmony

The only land on earth shared by marine iguanas, giant tortoises, and penguins.

This biodiversity is the Galapagos through and through; no wonder Darwin was so enchanted by the place. This delicate balance of nature’s harmony runs all the way down to the way coffee farmers respectfully harvest their coffee.

The Island's A Symphony And Everything On It Plays A Part

Farmers build rainwater catchment ponds to process their beans which they invite wild tortoises to share to escape the heat of the beating sun. Coffee plants attract and feed birds and butterflies which, in turn, they pollinate and prune. Astounded by its beauty, we bring you Galapagos Santa Cruz – a coffee that doesn’t just survive here, it thrives.

A Story In Taste

Inspired by this unusual land, our experts crafted a roasting profile to echo the careful attention the island’s farmers put into growing their crop.

A Medium Split Roast To Enhance The Fruity Aromas

When it came to the roast, the first split was for a medium time to keep all those fruit notes locked in. The second split was roasted a little darker with medium roasting time to reinforce the body and overall structure. And the result? A full-bodied espresso with roasted, sweet cereal and biscuit notes. Round, with some cacao-like bitterness, we bring you Galapagos Santa Cruz.

14 May 2018

McDonald’s new menu: less transparency, more tax havens

Today we release a new report on McDonald’s tax practices, focusing on the company’s use of tax avoidance mechanisms in Europe and low-tax and secrecy jurisdictions around the world. It shows how in the midst of a tax probe and the day after the Brexit, McDonald’s changed its tax structure.

In February 2015, our coalition of European and American trade unions unveiled a report about McDonald’s deliberate avoidance of over €1 billion in corporate taxes in Europe (from 2009 to 2013).

Three years later, this update shows that McDonald’s has significantly changed its corporate structure after the European Commission started investigating its tax dealings with Luxembourg and is less transparent on tax and more reliant on well-known tax-havens.

The Unhappy Meal report outlined in detail the tax avoidance strategy adopted by McDonald’s and its tax impact both throughout Europe and in major markets like France, Italy, Spain and the UK.

The new report 'Unhappier Meal' is co-authored by EPSU, EFFAT, and SEIU– the coalition of European and American trade unions, representing 15 million workers in different sectors of the economy across almost 40 countries.

Since the European Commission launched  its state aid probe,  McDonald's has moved from Luxembourg  to Delaware in the USA using a myriad of intermediate companies in Singapore, Hong Kong and the UK while making use of companies in the Cayman Islands,  Bermuda and Guernsey.

The new corporate structure is so untransparent that the new tax base is currently unknown. It does not allow for public scrutiny of the companies’ accounts, including taxes owed and paid.

Jan Willem Goudriaan, EPSU General Secretary says that “McDonald's recent move shows why we need strong global public country-by-country reporting. The European Council must take up its responsibility and protect our communities from corporate tax dodging. We call on the Commission to continue and deepen its investigation of the company and on national tax authorities to conduct joint audits.” He adds “The European Union cannot let companies like McDonald’s act with total impunity; the EU’s credibility is at stake.

Harald Wiedenhofer, EFFAT General Secretary, states: “This report adds insult to injury, after the successful McStrike actions in the UK, demanding a pay rise to £10 per hour, an end to zero-hour contracts and trade union rights and recognition, and several investigations at national and European level concerning workers’ rights. McDonald’s has to pay its fair share of taxes, and needs to guarantee decent working conditions, fair wages and proper information and consultation rights to all its workers, otherwise the credibility of Social Europe is jeopardised.

SEIU Executive Vice President Rocio Sáenz said: “It’s clear that McDonald’s will do whatever it takes to hide its abusive tax practices from public scrutiny. McDonald’s tax avoidance is just one example of how the company inflates its profits at the expense of everyone else, including workers, consumers and taxpayers. We urge the European Commission to vigilantly investigate McDonald’s continued tax avoidance and hold the company accountable for the damage done by its misconduct.

11 May 2018

Quantum Global Seeks Judicial Review into Mauritius Authorities Actions

Quantum Global Group today announced it has applied for a judicial review into what it called the unsubstantiated and illegal decisions of the Mauritius authorities to suspend its business licenses.

The Mauritius Court issued a series of restriction orders against Quantum Global last month on the basis of an affidavit by the Financial Intelligence Unit (FIU) that is still being withheld from the group despite repeated attempts over the past month to receive it.

The FIU obtained the restriction orders on the basis of statements it is unable to substantiate, Quantum Global states in the application for a judicial review. Moreover, the decision of the Financial Services Commission (FSC) to suspend its licenses was illegal, in breach of basic human rights and natural justice, and in breach of the Constitution of Mauritius, the group argues.

In a legal opinion, Lord MacDonald of River Glaven Kt QC, the former Director of Public Prosecutions of England and Wales, said: “The failure of the Mauritian authorities to provide even a gist of their case for the restriction orders is, in our view, a clear and significant breach of due process and fair trial rights.”

The FIU and FSC have allowed themselves to be drawn into a contractual dispute between Quantum Global and its client, the Angolan sovereign wealth fund known as Fundo Soberano de Angola (FSDEA), Quantum Global states.

Quantum Global manages $3 billion in seven private equity investment funds based in Mauritius under limited partnership agreements with the FSDEA. Following a change in administration, the FSDEA in early 2018 tried to terminate the limited partnerships, in breach of the agreements which guarantee a long-term commitment for investments in agriculture, infrastructure, hotels, healthcare, mining and timber.

When its first attempt failed, it appears the Angolan government persuaded the Mauritius authorities to start the court proceedings against Quantum Global. The FSDEA has also started legal proceedings against Quantum Global in the UK High Court, which granted a worldwide freezing order against the group. Furthermore, the FSC last month opened an investigation into Quantum Global, which the group believes to be a “fishing expedition” to try to justify its regulatory actions after the fact.

Lord MacDonald said: “In so far as a serious sanction has already been applied, that raises real concerns that the outcome of the investigation has been pre-judged, and that the sanction has been imposed unfairly.”

Arbitration proceedings are afoot in relation to the dispute with the FSDEA subsidiaries in Mauritius.

By wading into a contractual dispute, the Mauritius authorities have jeopardized the reputation of Mauritius as a financial center, Quantum Global says in the application, noting that arbitrary action and forced expropriations invariably undermine confidence in a jurisdiction as a whole. The group also reserves the right to seek redress for the damage and losses caused by the actions of the FSC and FIU.

Quantum Global asks the court to order the reversal of the FSC decisions and seeks a declaration that these decisions are illegal.

It should be noted that while the affidavit underlying the restriction orders has not been disclosed, several false and damaging allegations have been supplied to and published by the Mauritius media. Quantum Global believes that the leak of defamatory and unsubstantiated allegations is also wrong and against the principle of natural justice.

Quantum Global has strongly denied the false allegations reported by numerous media outlets in Mauritius and reiterated that all monies of the FSDEA are in place and accounted for. Quantum Global Group conducts its activities in accordance with approved investment policies and the applicable laws in Mauritius and worldwide. The seven investment funds based in Mauritius comply with strict IFRS reporting standards.

Quantum Global had also applied to the Mauritius courts to release funds from its frozen bank accounts for salaries and other essential operational expenses, which is a routine procedure allowed in such cases. However, the FIU has objected to the application. This decision is causing significant further financial damage to Quantum Global and the limited partnerships it manages. It also harms employees who are waiting to be paid.

Quantum Global’s Swiss shareholders have also informed the Mauritius government that they intend to apply for international arbitration under a bilateral investment treaty between Switzerland and Mauritius if the dispute is not resolved within six months.

Quantum Global will keep fighting what can only been seen as arbitrary FIU and FSC actions at this stage. More than a month after they have had their bank accounts frozen, the Mauritian authorities still refuse to account for their actions.

03 May 2018

ABAX: Lessons from the AB Mauritius and AB Holdings tax rulings

The rulings The AAR delivered its decision on the taxability of capital gains in India arising from the sale of shares of the subsidiaries of AB Mauritius and AB Holdings, AB India and AB International Private Limited respectively, to a group company, AB Singapore Pte. The Companies applied for separate rulings, which were delivered on 8 November 2017.

Quantum Global Announces Angolan Money Accounted For In Bank Accounts and Investments

FSDEA Legal Proceedings Destroying Value for the Angolan People

Quantum Global Group today issued a clarification for the people of Angola that all the funds of the Fundo Soberano de Angola (FSDEA) managed by Quantum Global are intact and properly accounted for.

The investment company detailed all the FSDEA funds under its management, past and present, to show that all the money was either deposited in bank accounts or invested in businesses across Angola and Sub-Saharan Africa, creating hundreds of jobs and generating wealth for communities across the continent.

Quantum Global expressed its dismay that the FSDEA has resorted to legal proceedings against the group when it has received regular updates on the fund operations and value, which has grown under Quantum’s management. Rather than launching misconceived legal proceedings, Quantum Global believes that the FSDEA should seek a negotiated settlement or arbitration in accordance with their contractual agreement.

The Quantum Global mandates

Quantum Global has historically managed two types of investments for FSDEA: the first is a liquid money mandate known as the multi-asset class mandate that invests principally in listed stocks and bonds; the second is a private equity mandate that invests in private companies for long-term growth.
  1. The liquid mandate Up until April 2018, Quantum Global Investment Management Ltd. (“QGIM”), Switzerland, managed a multi-asset class mandate on behalf of FSDEA, and the value of this money increased above key benchmarks under its management. This mandate was terminated by the FSDEA in February 2018 and these funds are already back under FSDEA management.
  2. The private equity mandate In addition, the FSDEA committed $3 billion to seven private equity funds based in Mauritius, where QG Investments Africa Management Ltd. is the investment manager. This money is deposited as cash and cash equivalents in the bank accounts of each fund, as an “advance cash contribution”. The remainder of the initial capital has been invested in the 20 companies that are listed on Quantum Global’s website: http://quantumglobalgroup.com/businesses/private-equity/portfolio-companies/. The value of these investments has increased according to the latest preliminary unaudited figures.

It should be noted that all investments and payments made have been audited according to international IFRS accounting standards and comply with the Fund’s investment policy. Contrary to media reports, the investment manager has provided the FSDEA with quarterly investment reports and as well half-year statements and full-year audited statements. The financial statements of 2017 are currently being audited by a respected independent auditing firm. In making these investments, Quantum Global Group as an investment manager has always acted in the interests of its investors.

Creating jobs and economic prosperity through portfolio company investments
Looking now at the portfolio companies that have benefited from the FSDEA’s private equity investments, they are all providing jobs and prosperity to communities across Angola and Africa, while delivering long-term sustainable returns to the FSDEA.

By investing in Porto de Caio through the infrastructure fund and Estrela da Floresta through the timber fund, for example, Quantum Global and the FSDEA are creating two powerful industrial clusters that are creating jobs today for Angolans, with the promise of more jobs and wealth for these communities in the future.

In Porto de Caio alone, where the FSDEA’s initial investment of $180 million is now valued at $385 million, will create 30,000 direct and indirect jobs when the port is fully operational in a couple of years’ time. The government revenue from the increased economic activity is expected to generate $300 million in tax revenue for Angola every year, according to research projections.

In the timber sector, Estrela da Floresta will create over 10,000 jobs and inject $1.1 billion into the local economy when all 18 concessions are operational.

For the agriculture sector, seven industrial farms are operated under the Fazangola brand and are working to reduce food imports and create a large-scale food industry for Angola.

The value destruction caused by legal proceedings

By continuing to resort to legal proceedings in Mauritius and the UK, the FSDEA is destroying value in their own investments. The portfolio companies cannot pay salaries or key suppliers, fulfil contract obligations to fund construction of new buildings or pay taxes or legal bills. All of these negative consequences resulting from the legal approach adopted by the FSDEA will result in financial damage to the FSDEA’s portfolio and to the Angolan people. This legal approach goes against the duty of the new FSDEA administration to protect the value of the existing investments.

Quantum Global will continue to defend its reputation against the unwarranted assaults through legal proceedings in Mauritius and the UK. But at the same time, the group looks forward to resolving this contractual dispute in a professional manner.

30 April 2018

Quantum Global Demands Fair Hearing in Mauritius as Damage to Investments Gets Worse

Quantum Global Group repeated its call for a fair hearing in Mauritius after the Financial Intelligence Unit (FIU) again declined in court to disclose the allegations behind restriction orders against the group.

The FIU has refused to disclose the reasons for the orders, which led to a freeze on the group’s bank accounts and the suspension of its licenses, for three weeks even when large extracts of what appears to be the FIU legal rationale have been reported in the press in Mauritius.

The dilatory tactics of the FIU appear part of a strategy to inflict maximum damage on the investment funds of Quantum Global Group, which is in a contractual dispute with its client, the Fundo Soberano de Angola (FSDEA).

Quantum Global is dismayed that the FSDEA has resorted to legal action in several jurisdictions rather than seeking a negotiated settlement or arbitration in accordance with the contractual agreement. Despite the false allegations being reported in the Mauritius press, all monies of the FSDEA are in place and accounted for.

The banking freeze is causing severe financial damage to the FSDEA’s own portfolio. It has impacted employees, clients, partners and the important investment projects that Quantum Global Group manages across Angola and Africa on behalf of the FSDEA.

This damage has been made worse by the refusal of the Mauritius authorities to release funds required for the continuance of the ordinary course of business, such as the payment of salaries to employees and thousands of African workers indirectly employed by the funds’ portfolio companies.

The group has maintained that the legal proceedings are unwarranted because Quantum Global has followed the investment policies of the FSDEA and the laws and regulations of every jurisdiction where it operates. The FSDEA has overseen Quantum Global’s investments on a quarterly basis since the inception of the funds and the value of the funds has increased under Quantum Global’s management, according to latest valuations.

The group has argued it is in the interest of Angola to apply any new FSDEA strategy in good faith and in accordance with contract law, to maintain the value to the portfolio and secure the jobs already created in Angolan industries including ports, forestry, agriculture and real estate.

Quantum Global looks forward to resolving this situation in a professional manner.

29 April 2018

Quantum Global Group Denounces Intimidating FSDEA Tactics Amid Court Proceedings

Quantum Global Group on Sunday denounced the intimidating tactics of the Fundo Soberano de Angola (FSDEA), its client, amid a mounting number of legal proceedings in Mauritius and the United Kingdom.

The group reiterated its call for fair proceedings three weeks after a Mauritius court issued the first of a series of restriction orders on Quantum Global Group companies in Mauritius, without disclosing the underlying reasons for the case.

A UK High Court reportedly granted an application by the FSDEA for a worldwide freezing order on several Quantum Global Group companies on Friday. The group has yet to be served the underlying court papers.

Following a change in strategy, the new administration of the FSDEA announced on Friday its intention to remove Quantum Global Group from the management of the private equity funds based in Mauritius. This would breach their long-term contractual agreements.

Quantum Global continues to be dismayed that the FSDEA has resorted to intimidation by launching legal action in multiple jurisdictions rather than seeking a negotiated settlement or arbitration in accordance with the contractual arrangements.

While the reasons for the court actions against Quantum Global have yet to be officially disclosed, there has been a barrage of unfounded allegations against Quantum Global Group in the Mauritius press.

The group has maintained that the court applications are unwarranted because Quantum Global has followed the approved investment policies of the FSDEA and the laws and regulations of every jurisdiction where it operates. The FSDEA has overseen Quantum Global’s investments on a quarterly basis since the inception of the funds and the value of the funds has increased under Quantum Global’s management, according to latest valuations.

Any hasty move to freeze or wind down the FSDEA funds would lead to a significant loss of value of the existing portfolio because many of these projects are in the early phase of development.

The group has further argued it is in the interest of Angola to apply any new strategic direction in good faith and in accordance with international contractual law, to maintain the value to the FSDEA portfolio and secure the jobs already created in Angolan industries including ports, forestry, agriculture and real estate.

As a result of the absence of due process and the rush to sanction Quantum Global, the group has seen its business and the value of the FSDEA funds seriously damaged. The freezing orders have had a real impact on employees, clients, partners and the important investment projects that the group manages across Angola and Africa.

This negative impact has been amplified by the refusal of the Mauritius authorities to release funds required for the continuance of the ordinary course of business, such as the payment of salaries to employees and thousands of African workers indirectly employed by its portfolio companies.

While there has been no update from the FSDEA on the new strategy, Quantum Global looks forward to resolving this situation in an amicable manner.

26 April 2018

Making a Graceful(ish) Brexit

During a recent Bloomberg International Tax Webinar on Brexit and indirect tax, the moderator polled participants about their businesses’ "Brexit readiness." 

Vistra doubles international expansion services business with acquisition of US-market leader Radius

Vistra, one of the world’s leading providers of international incorporations, trust, fiduciary, private office and fund administration services, today announced it has entered an agreement to acquire Radius, a specialist US-based provider of international expansion services. Vistra is acquiring Radius from the private equity firm Hg.

The transaction doubles Vistra’s International Expansion Services (IES) business, making it a market leader in IES services, including the number one market position in the USA. Vistra’s IES business helps clients navigate expansion into new markets, including establishing offices, obtaining the necessary licensing to operate in foreign markets and ongoing services, such as compliance and payroll.

Radius, headquartered in Boston with offices across the United States and in the United Kingdom, India, China, Singapore, Brazil and the Netherlands, provides managed services, advisory services and OverseasConnect, its integrated cloud-based software platform, to more than 500 clients operating in 80 countries. The firm has 880 employees globally. Radius is led by CEO Stephen M. Chipman, who will become the Group Managing Director of Vistra’s IES business.

Following the acquisition, Vistra will have a global IES team of 1,300 employees and a support network of over 3,300 staff, operating in over 70 offices and 40 jurisdictions.

Martin Crawford, CEO of Vistra, said: “The Radius team has developed a highly successful global business, which is a natural fit with Vistra’s IES operations. Joining forces means our clients will have the highest quality people, technology and processes to help them grow with confidence when they are expanding internationally. We are delighted to welcome Stephen and his team to the Vistra family.

Stephen Chipman, CEO of Radius, said: “The combination of Vistra and Radius creates a leading global provider of quality international expansion services. Vistra is the ideal partner for Radius given our values and culture align so closely. We are excited about the future opportunities for our clients and employees.

Radius will be rebranded under the Vistra brand following completion of the transaction.

25 April 2018

Quantum Global to seek international arbitration in Mauritius dispute

Quantum Global and its founder have notified the Government of Mauritius of their intention to resort to international arbitration if the dispute over its business affairs in Mauritius is not settled within six months.

Quantum Global and its founder, Jean-Claude Bastos de Morais, have seen their bank accounts frozen and business licenses suspended by the Mauritius courts on the basis of allegations that have yet to be made public. These measures are causing significant financial damage to Quantum Global and the private equity funds that the company manages on behalf of the Angolan sovereign wealth fund (FSDEA).

We have notified the Government of Mauritius of our intention to resort to international arbitration if this matter is not settled within six months,” Mr Bastos said. Mauritius and Switzerland have a Bilateral Investment Treaty that protects the rights of investors in the case of disputes.

As a result of the absence of due process and the rush to sanction Quantum Global, the company has seen its business seriously damaged. This has a real impact on our employees, our clients, our partners and the important investment projects we are managing across Angola and Africa. We urgently need to have a fair hearing,” Mr Bastos added.

Quantum Global had applied to the Mauritius courts to release some money from its frozen bank accounts to pay salaries and legal fees. The hearing took place on Wednesday and the Financial Intelligence Unit of Mauritius objected to the application, so the court set a further hearing date for May 11.

The delay in releasing funds to pay salaries and legal costs causes further financial damage to Quantum Global and in particular, causes further hardship for our employees, and indirectly the thousands of hard working families who work for our portfolio companies in Angola and Africa,” Mr Bastos said.

While the reasons for the initial court actions against Quantum Global have yet to be officially disclosed, there has been a barrage of unfounded allegations against Quantum Global in the Mauritius press.

Mr Bastos said: “We believe that the underlying accusations against us will not stand up to scrutiny, which explains why they are not being made public.

The truth is that all the money of the Angolan government is accounted for in publicly disclosed accounts that have been independently audited for a number of years. The overall FSDEA portfolio has grown in value under Quantum Global’s management.

We fear that these actions against Quantum are a pretext for breaking our contractual agreement with the Angolan wealth fund.

Quantum Global has maintained that, from a legal standpoint, the commercial rationale of the General Partner of the seven Limited Partnerships registered in Mauritius remains, along with their contractual legitimacy.

We look forward to resolving this situation with the FSDEA in an amicable manner,” Mr Bastos said.

23 April 2018

ICIJ: Angolan Tycoon’s Frozen Funds Highlight KPMG’s Role In Offshore Secrecy

Mauritian authorities have frozen 91 bank accounts linked to investor Jean-Claude Bastos, a key figure from the Paradise Papers with close connections to Angola’s former leaders.

UK Privy Council rules on Investec v Glenalla trustee indemnity dispute

The Privy Council has handed down judgment in Investec Trust (Guernsey) v Glenalla Properties (2018 UKPC 7), concerning the personal liability of trustees for loans they had made to some offshore companies. The ruling in this long-running dispute is a significant one in the international law of trustee engagements, and the scope of trustee indemnification.

Cape Town’s CoworKite expands “workation” concept to Mauritius

The Cape Town-based CoworKite, which organises community-driven co-working and co-living retreats, has expanded its concept to Mauritius, offering location-independent professionals the chance to work from the beach for certain periods of time.

20 April 2018

Quantum Global Group Press Release

Quantum Global announced today that it welcomed the decision of a Mauritius Court to move forward with due process by holding a fair hearing on the allegations against the company.

The Financial Intelligence Unit, which made the initial application to the Supreme Court to freeze Quantum Global’s bank accounts in Mauritius on April 7, is still refusing to provide any details about the underlying cause for the action. The next hearing is scheduled for Wednesday, April 25th.

The FIU action prompted the Financial Services Commission to suspend the business licenses Quantum Global uses to manage money on behalf of the Angolan sovereign wealth fund.

The banking freeze has already had a seriously damaging impact on Quantum Global’s employees, clients, partners and the important investment projects it manages in Angola and Africa. Thousands of valued workers across Africa are affected, including 30 staff in Mauritius.

This is not just about bankers and lawyers, thousands of African families are suffering as a result of these unwarranted actions by the Mauritius authorities,” said Jean-Claude Bastos de Morais, Founder and Group Chairman of Quantum Global.

The banking freeze has already had a significant negative impact on Quantum Global’s reputation and businesses, and these damages are rising every day. As long as the freeze is in place, the funds under Quantum Global’s management are missing out on new opportunities to follow through on deal negotiations, both in terms of completing new investments and selling interests in existing investments.

Mr Bastos said the actions taken against Quantum Global were unjustified, because the company has performed its fund management duties successfully on behalf of the Angolan sovereign wealth fund, despite false and damaging allegations made against the firm.

We have successfully challenged all the false and damaging allegations made against us in some sections the media. Now we read press reports making new false accusations of impropriety, but the truth is that all the money of the Angolan government is accounted for in publicly disclosed accounts that have been independently audited for a number of years,” Mr Bastos said.

Furthermore, the overall FSDEA portfolio has grown in value and it is this value we are trying to protect by demanding due process and clearing our name,” concluded Bastos.

Quantum Global is an investment manager and conducts its activities in accordance with the approved investment policies and applicable laws in Mauritius and worldwide. The seven investment funds based in Mauritius comply with strict IFRS reporting standards.

Is Netherlands Becoming the New 'Mauritius Route’ for FDI Flows Into India?

Now the third biggest contributor of FDI to India, over 80% of the investment flows that came from Netherlands in 2017 were 'routed' and not 'direct'.

The UK Refused To Raid A Company Suspected Of Money Laundering, Citing Its Tory Donations

The British government refused to assist a French investigation into suspected money laundering and tax fraud by the UK telecoms giant Lycamobile – citing the fact that the company is the “biggest corporate donor to the Conservative party” and gives money to a trust founded by Prince Charles.

19 April 2018

Quantum Global Seeks Due Process in Mauritius

Quantum Global reiterated today it is confident all matters will be resolved positively once the company receives details about the underlying cause for the restriction order and license suspension of its operations in Mauritius. The Financial Services Commission and the Financial Investigation Unit have been called before the Court to explain their actions, with an initial hearing set for tomorrow, Friday, April 20th.

Quantum Global continues to be dismayed that while the underlying cause for the actions of the authorities have not been provided to the Company, local Mauritius media have reported on key aspects of these actions.

As I have stated throughout this unfair and damaging process, it has been hard to defend ourselves against actions by the authorities when the rationale has not been made clear despite our repeated attempts to receive this information,” said Jean-Claude Bastos de Morais, Founder and Group Chairman of Quantum Global.

Quantum Global is an investment manager and conducts its activities in accordance with the approved investment policies and applicable laws in Mauritius and worldwide. The seven investment funds based in Mauritius comply with strict IFRS reporting standards.

We remain confident and resolute in our ability to defend ourselves vigorously and we plan to do so when we fully understand the specific reasons for the actions taken against us,” Mr Bastos concluded.

International Tax: When Countries Go Rogue

Cash-strapped governments eye up international businesses generating revenue in their own jurisdictions and want a slice of the action. Yet, as these companies grow, competition between governments is becoming fierce as each tries to entice these businesses to domicile themselves within their economies. Meanwhile, cross-border business is at a real risk of suffering double taxation as tax authorities take unilateral action. Companies are going to need to be nimble to respond to these changes and not assume that they will go away any time soon. How will they respond?