LV to be run from tax haven after £530m deal: Private equity predator registers shell company in Jersey










Insurer LV will be owned by a firm based in an offshore tax haven if private equity sharks secure a £530million takeover next month.

LV bosses have agreed to sell the 178-year-old mutual to Bain Capital – but the deal needs the backing of members.

Now it is known that an American buyout firm based in Boston has created a Jersey shell company to execute the acquisition.

LV bosses have agreed to sell the 178-year-old mutual to Bain Capital – but the deal needs the backing of members

LV bosses have agreed to sell the 178-year-old mutual to Bain Capital – but the deal needs the backing of members

BCC Blake Bidco Limited (the vehicle) was registered December 2013. MPs are now questioning whether LV will keep the value of a mutual while paying as much tax in the UK.

Complex webs of offshore entities in Jersey, Isle of Man, and Cayman Islands are often used by private equity firms to benefit from lower taxation and more disclosure requirements.

The revelation caused Labour MP Gareth Thomas, the chairman of the all-party parliamentary group for mutuals, to write to Bain’s frontman, Matt Popoli, to demand he reveal who its backers are.

Thomas told the Daily Mail: ‘Setting the company up offshore, rather than basing it at one of their UK offices, doesn’t sit well with the idea that Bain wants to maintain mutual values.

‘It calls into question whether the new owners really intend to maintain offices in Hitchin, Exeter or Bournemouth, and what levels of taxation the firm will pay in the future.’

Bain’s sources said the company would still be resident in the UK and will pay corporation taxes on profits.

Thomas requested that Bain reveal the names of potential board members and promise not to use this buyout to launch new mutual funds in the UK.

He also asked Alison Hutchinson, a member on the board of LV, if they had ever approached her about demutualising Yorkshire Building Society. Hutchinson is currently the vice chairman. LV was founded in 1843 to allow Liverpool’s poor to avoid the indignity of a pauper’s funeral.

There are just two weeks for members to vote on this deal. It has faced opposition from all over Westminster and City.

Bain has been criticised for offering just £100 to LV’s policyholders and owners, while failing to make guarantees on jobs.

Bain Capital said: ‘We will take time to consider and fully reply to Gareth Thomas in due course. We do note, however, that the letter contains a number of wrong and misleading assumptions.’ 

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