A Green MSP has attacked Scottish prosecutors for failing to take a single action in a decade against companies which failed to comply with basic transparency rules.
Andy Wightman focused his fire on the Crown Office after a series of scandals involving various Scottish companies whose filings were inaccurate or incomplete.
Mr Wightman stressed that no prosecutions had been taken against thousands of Scottish limited partnerships (SLPs), corporate entities once dubbed “Britain’s home-grown secrecy vehicles” which have failed to reveal their owners under rules imposed last summer.
Prosecutors, however, countered that they rely on information from Britain’s corporate register, Companies House, which as of last year had just six enforcement officers checking filings for four million entities.
Mr Wightman said: “I am surprised and shocked to hear that no prosecutions have been made over the past ten years for late filing by companies or for failure to disclose beneficial ownership by SLPs.
“These are straightforward offences committed by law on defined dates. It is inexcusable that the Crown Office and Procurator Fiscal Service (COPFS) has not been more assertive in bringing prosecutions against companies and SLPs that fail to meet their statutory obligations.”
Mr Wightman had asked Lord Advocate James Wolffe how many SLPs had been prosecuted for failing to file what is called a “person of significant control” or PSC statement.
Mr Wolffe, in a written answer, confirmed that the answer was none. However, he added: “COPFS has recognised Companies House as a Specialist Reporting Agency; and COPFS is working with Companies House to facilitate the reporting of alleged offences by Companies House to COPFS.”
Companies House is currently reviewing the PSC status of thousands of SLPs, almost all of which were entirely opaquely owned before the new rules. The Herald has revealed mass non-compliance with the new regime. However, we have also revealed that agencies in the former Soviet Union are prepared to provide a fictitious company as “owner” of an SLP for as little as 170 euros to get around the rules.
Critics have long stressed that SLPs have been abused by money-launderers, tax-dodgers and gangsters partly because Companies House was so lightly policed.
Some of these same problems apply to other kinds of UK companies. Mr Wightman asked whether any firm had been prosecuted for late or inaccurate filings in the last 10 years. Mr Wolffe said no but added that compliance levels were high.
International observers are not so sure about levels of compliance in UK firms. Italy’s Il Sole 24 Ore on Thursday published concerns about copycat firms being created in Britain to mimic real ones, including a company called Telegram which claims it had a start-up capital of £800m but has no links to the Russian messaging business of the same name. The Herald last year revealed a copycat in Ukraine had created companies using the names of major whisky brands.
Il Sole 24 Ore also reported a coming investigation by campaign group Global Witness suggesting thousands of children's names have been filed as PSCs. This comes after an Italian mob money-launder registered businesses in his name using the occupation “fraudster”.
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