Private estate held indirect stake in U.K chain of 270 stores that sell household goods at low weekly fees
By Nahlah Ayed, CBC News: Nov 05, 2017
But within a companion financial portfolio, leaked documents show, she’s also held millions in investments offshore, including one with an indirect stake in a rent-to-own company that’s been accused of taking advantage of some of Britain’s poorest citizens.
It is the first time it’s come to light that the Queen — through investments made by the monarch’s private estate, the Duchy of Lancaster — has held stakes in funds that operate in tax-free havens.
That isn’t illegal. But the specific revelations in this case demonstrate the potential pitfalls of holding offshore investments in tax-free jurisdictions and raise questions about where the money can end up.
The documents are part of a massive offshore leak released Sunday dubbed the Paradise Papers — a trove obtained by the German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists, including the CBC.
They provide a peek into some of the financial transactions used to generate a private income for the Queen in the kind of detail that is rarely if ever made public — certainly not in the Duchy’s or royal spending accounts available online.
The documents also made it possible to establish that the Queen, through her Duchy holdings, came to acquire in 2007 an indirect stake in a now-defunct British chain of liquor stores and that rent-to-own company, called BrightHouse.
One of the funds in question, Dover Street VI Cayman Fund LP, invested in a private equity company that had acquired BrightHouse. The British chain of 270 stores sells household goods at low weekly fees but — over the long term — sky-high interest rates. The ultimate result is that customers end up paying many times more than the original price of a household item.
BrightHouse has long countered criticism of this practice by saying it helps people on low incomes acquire items they couldn’t otherwise afford. But just two weeks ago, the British Financial Conduct Authority ruled BrightHouse had not acted as a “responsible lender” and ordered it to pay millions of pounds to thousands of customers.