ANAS Sarwar is facing fresh questions about his credibility and judgment after admitting he owned shares in a company in a tax haven.
The millionaire Scottish Labour leadership candidate had a stake in a software company based in the Channel Islands while an MP.
Parliamentary registers of interest show he declared a shareholding in Picsel Group Holdings Limited, which was based in Guernsey’s capital Saint Peter Port.
Unspun: the political diary
Mr Sarwar declared an interest in the firm after his election as the MP for Glasgow Central in May 2010 until January 2011.
One of the company’s UK subsidiaries subsequently went into administration owing more than £500,000 to the taxman.
At the time, MPs were only required to declare an interest in a company if they held more than 15 per cent of the issued share capital, or a smaller stake worth more than their salary.
An MP’s salary in the relevant period was £65,738.
Mr Sarwar’s campaign claimed he paid nothing for the shares and never profited from them.
Unspun: the political diary
Labour’s recent General Election manifesto promised a swift crackdown on tax havens.
It said: “Labour will act decisively on tax havens, introducing strict standards of transparency for crown dependencies and overseas territories, including a public register of owners, directors, major shareholders and beneficial owners for all companies and trusts.”
Scottish Labour this week won a Holyrood vote calling for more progressive taxes to fund better public services.
Guernsey has a zero per cent corporation tax rate on most companies, and does not levy taxes on capital gains, inheritance, capital transfer, or the equivalent of VAT.
It was blacklisted by the European Commission for being “non co-operative” on tax in 2015, alongside 29 other tax havens such as the Cayman Islands, Bermuda and Monaco.
However the blacklisting was lifting two months later after furious complaints from the island.
Unspun: the political diary
A Scottish LibDem spokesperson said: "Anas Sarwar needs to come clean on the use of tax havens. Surely a Labour leadership contender should know better than to deprive public services of essential funds?"
Mr Sarwar, 34, now a Glasgow list MSP and the centrist candidate in the Labour race, has been under mounting pressure over his business links.
The family business in which he has a 23 per cent stake worth an estimated £4.8m does not pay staff the £8.45 an hour real living wage promoted by Labour.
Nor does United Wholesale (Scotland) Ltd have trade union recognition for its 250 staff.
Mr Sarwar says no union has ever asked to set up a collective pay bargaining unit at the firm since it was founded by his father, the former Labour MP Mohammad Sarwar, 16 years ago.
The MSP is not a director of the company, and says he has no hand in running it.
On Wednesday, he also told Radio Scotland he did not take a dividend from his shares.
However UWS accounts later showed he had received £333,000 in dividends between 2013 and 2015, and his wife Furheen had received another £196,000.
Unspun: the political diary
Despite saying he had never had a part in the firm’s operation, Mr Sarwar also signed a company resolution creating a new class of share in 2010 which benefited his wife.
He now says he has waived his unearned dividend income since becoming an MSP in 2016.
It also emerged yesterday that a Labour branch in Mr Sarwar’s former Westminster seat had endorsed his left-wing rival for the leadership.
Glasgow Kelvin Constituency Labour Party (CLP), which overlaps Glasgow Central, backed Richard Leonard, as did Glasgow Anniesland CLP.
Of the six other CLPs in Glasgow, three more are seen as likely to back Mr Leonard, and three are considered better for Mr Sarwar.
If Mr Leonard, who lives in Paisley and represents Central Scotland, was backed by most of the CLPs in Mr Sarwar’s home patch, it would be a major coup for the former GMB official.
A senior Labour source added: “If Anas can’t win most of the Glasgow seats he’s f***ed.”
Mr Leonard is expected to pick up the support of most trade unions, and also has Scottish Labour’s youth wing behind him.
A spokesman for Mr Leonard said he was “pleased that the first CLPs to endorse a candidate have backed him as the best person to lead Scottish Labour”.
Asked why Mr Sarwar had shares in a tax haven, his spokesman said: “Anas paid nothing for these shares, received no dividends or remuneration, had no role in the running of the company, and received nothing when the shares were disposed of.
“He fully complied with parliamentary rules on declaring interests.”
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