Shell companies registered in tax havens only serve to hide identity of true owners

Oct 13, 2020 News

The Senegal gas blocks giveaway…

– Expert says this red flag should always warrant probe

Kaieteur News – When oil companies are created in a matter of days or weeks and are registered in territories that keep the identity of the real owners – the ‘beneficial owners’ – a secret, it creates the perfect condition for corruption and tax evasion to flourish. It ultimately robs the citizens who are the rightful owners of a nation’s wealth, billions of dollars.

Expert on Oil Sector Corruption, Alexandra Gillies

Aliou Sall, the brother of Senegal’s President

President of Senegal, Macky Sall

Controversial businessman, Frank Timis

Taking this salient fact into consideration, expert on oil sector corruption, Alexandra Gillies, posited that companies registered in tax havens should always send alarm bells ringing for authorities as their pursuit of a nation’s natural resources leave the citizenry in particular, at great risk.

Map showing the two controversial gas blocks off the coast of Senegal

Gillies said that a glaring example of this is the case of Senegal where Frank Timis, a Romanian-Australian businessman with a corrupt past, created two shell companies, had them registered in the Cayman Islands and the British Virgin Islands, then acquired two prime gas blocks offshore the African country. It should be noted that the Cayman Islands and the BVI are two of the world’s most top nations for providing financial privacy to corporations.
In one of her assessments published by the Natural Resource Governance Institute (NRGI),
Gillies explained that Timis, who has zero experience in the upstream industry, created a company called PetroTim in 2012 and registered same in the Cayman Islands. Gillies noted that he used that company to gain the rights to two offshore concessions, Saint Louis and Cayar. Two years later, he created another shell company called Timis Corporation, registered same in the British Virgin Islands, and hired the brother of the President, Aliou Sall, to run the show.
Less than two months after registering the new company and hiring the President’s brother, Timis Corp sold 60 percent of the shares to American oil company Kosmos in 2014 for over US$400M.
That same year, Kosmos found major natural gas reserves. The United Kingdom (UK) oil giant British Petroleum (BP) subsequently joined the partnership and acquired 30 percent of the blocks’ interest which saw Timis getting more than US$200M.
In 2017, BP then bought out Timis Corporation for US$250M. That company had held the remaining shares in the gas blocks. BP also agreed to pay Timis at least US$12B in royalties over a 40-year period. In total, Timis made approximately US$900M in cash within five years of acquiring the blocks and today, the 55 year-old is set for life with at least US$12B more to follow.
As a result of using the shell companies which are registered in tax havens as part of his corrupt scheme, the people of Senegal remain in the dark about the real owners and shareholders that are also benefitting from the gas-rich fields.
With this in mind, Gillies said that all nations ought to learn from Senegal’s grave mistake and demand beneficial ownership disclosures from companies registered in tax havens. She stressed that it is a red flag that should never be ignored.

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