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Breaking open shell companies

Breaking open shell companies


The leak of financial documents known as the Pandora Papers shines a light on ‘shell companies’ which allow people to hide their wealth. Has the time come for tax authorities to clamp down on them?

Nimo OMer, Narrating:

Hi I’m Nimo and this is Sensemaker.

One story every day to make sense of the world.

Today we’re looking at tax and the law. Not tax dodging – that’s illegal – but how you can avoid paying taxes perfectly legally. 


“It’s been described as the biggest ever expose of financial secrets and appears to implicate presidents, prime ministers and billionaires. The leaked files have been dubbed the Pandora Papers…”

Sky News

There’s a chance that even if you haven’t paid much attention to them, you’ve seen a lot about the Pandora Papers this week. They’re a leak of 12 million documents detailing hidden fortunes and offshore dealings of world leaders, politicians, and billionaires. 

If you’ve just caught sight of the headlines, you might have assumed that what they’ve brought to light has been criminal activity.

But maybe, what they actually reveal, is more interesting than that.

It’s mostly not criminal. It’s what you’re allowed to do under laws that we’ve signed up to. When I say we’ve signed up to them, I mean through our MPs, our government, and through Her Majesty’s Revenue and Customs. 

So that’s our question today: is the lesson of the Pandora Papers that maybe, our laws need to change?


There’s one man who you are probably familiar with, who’s caught up in the Pandora Papers story.  

“I want to win on the high street. It’s not about making money it’s about getting it right.”

BBC, Panorama

Philip Green.

He’s the billionaire businessman who mixes with royalty and showbiz, sat as a government adviser under David Cameron, and was given a knighthood by Tony Blair for his services to retail. 

He ticks all the billionaire boxes. He spends a lot of his life in Monaco, and he’s got a yacht or two. 

Even if you haven’t heard of him, you probably used to shop in one of his stores.

He owned the retail empire Arcadia. The parent company to British Home Stores, Topshop, Debenhams, Miss Selfridge and others. 

“We have… Topshop, Topman, Miss Selfridge, Burton, Wallace, Dorothy Perkins, BHS… I call it as it is. So I think, you know I go to meetings, and they laugh, they cry, I think they leave thinking, damn why didn’t I think of that.”


And as part of the Pandora Papers, it was leaked that while BHS was collapsing and thousands of people were losing both their jobs and pensions, Philip Green’s wife Tina, was buying expensive houses in London.

All completely legally. 

If we’d known at the time that Tina Green was spending millions on houses while BHS was collapsing, there would have been a fuss about it.

It might not have made a difference to those thousands of people’s jobs and pensions, but we’d definitely have asked questions about whether it was right.

But we didn’t know. Because of the way the houses were bought. Using what’s known as a shell company. That’s what we’re going to try to make sense of today.


It was back in 2000, that Philip Green bought British Home Stores. 

[Clip: BHS advertisement]

Things went well for a few years. But then more competition from the likes of Primark came onto the high street, and BHS began to struggle. And in 2016, it collapsed into administration.

“The plea was written on the shop door. Save BHS… but it wasn’t enough. Administrators say all 163 stores will go into closing down sale mode…”

5 News

It was one of the biggest failures on the high street since Woolworths went bust eight years earlier.

And parliament had questions for Philip Green.

“So when it says, in the accounts, P. Green and his immediate family are the ultimate controlling party, what does that refer to?

This is your wife then? 

Yes, yes.

She has the accounts, you don’t?

I’ve never had an overseas bank account.

MPs questioning Philip Green in parliament

MPs were probing away because the finances of BHS weren’t straightforward. Philip Green had made his wife the owner of the company because he saved a lot of tax that way.

And the Greens ran other bits of their empire through shell companies.

That’s a common thread for a lot of the activity found in the Pandora Papers.

Shell companies only need to exist on paper. They don’t need an office and they don’t need employees. And they’re often controlled offshore in tax havens like the British Virgin Islands where a lot of the information is kept private, unlike if you run a limited company in the UK. 

Shell companies have no real purpose. But they can be really useful if that lack of transparency matters to you. 


So that leads us to the Green family’s new properties. Because both before and after the BHS collapse, his wife Tina was able to buy at least four of them in London. 

A £10.6 million home for their daughter, just metres from Buckingham Palace.

A £15 million flat in Mayfair. 

A flat worth £7 million in Belgravia.

And another flat worth nearly £5 million in Mayfair again. 

Because Tina Green bought the properties through a shell company, she could keep her identity hidden. And she wouldn’t have had to pay stamp duty – a tax on buying property.

So, is there a case for getting rid of shell companies? 


There aren’t many places left where you can create a genuinely anonymous shell company. But in Britain you can. The company registration system contains a giant loophole which lets you do that.

Anonymous shell companies can set up British companies. In other words, it’ll be impossible for you to know who’s really behind that company. Who controls it. Who gets the money from it.

Here’s a great example: back in 2018, the anti-corruption campaign group Global Witness looked into “PSCs”, people with significant control over companies in the UK, and found 4,000 of them were under the age of two.

One hadn’t even been born yet. 

Not only that, but it’s also okay to say that your company doesn’t know who owns it. And deliberate spelling mistakes in key company registration documents are also very common, to throw people off the scent. 

So although new transparency rules were introduced in 2016, people can still get round them legally, and avoid tax. 

In Philip Green’s case, the shell companies used by his wife were set up in the British Virgin Islands. That’s the tax haven I mentioned. And it’s how she could buy those properties in London anonymously. 

There’s a need for better policing of the registry, whether companies are set up at home or abroad.  

What the Pandora Papers show is unsurprising but it could be the nudge government needs to reconsider where the law should stand. 

Today’s episode was written and produced by Imy Harper.