Pandora Papers: Wopke Hoekstra invested through tax haven

This is reported by the newspapers Trouw and Het Financieele Dagblad, which together with research platform Investico have access to the Pandora Papers. That’s the leaked accounts of 14 companies that specialize in helping other companies pay as little tax as possible.

Mailbox company in British Virgin Islands

The documents have come into the hands of the International Consortium of Investigative Journalism (ICIJ), of which Trouw, FD and Investico are members. Through the letterbox company called Candace Management, the group of business people invested in Asilia, a company that offers safari holidays in Tanzania and Kenya.

Hoekstra says he did not know that he was investing through a notorious tax haven. Other investors indicate to FD and Trouw that they were aware of this. When buying the shares, a document had to be signed with ‘British Virgin Island’ on it, one of them remembers, Trouw writes.

A salient detail is that during Hoekstra’s ministry, the Netherlands placed the British Virgin Islands on a list of countries that would be subject to strict measures to combat tax avoidance. That list went even further than the blacklist the EU had for tax havens at the time.

Nice and easy and cheap

The choice to let the investments go through this tax haven was because it was a ‘smooth, easy and cost-efficient way’, one of the founders told Het Financieele Dagblad.

As far as the newspapers have been able to check, the investments have not broken any laws. According to their own account, the parties involved have always properly declared their interest to the tax authorities. And Minister Hoekstra sold his stake in October 2017, a week before he became a minister.

He has transferred the profit of 4800 euros to a good cause, he tells the newspapers. At first glance, that seems like a relatively small amount, but compared to an investment of 26,500 euros, it was a return of almost 20 percent.

Not reporting is ‘unacceptable’

It is remarkable that Hoekstra only sold his interest just before his ministerial position. By then he had been a member of the Senate for six years. As a senator, he also sat on a committee dealing with the fight against tax avoidance.

The fact that he did not mention that he had a shareholding in a letterbox company in a country that is known as a free haven for companies that want to pay as little tax as possible is ‘unacceptable’, according to Christoph Demmke in Trouw. “Below all standards”, says the professor and integrity expert.

Friends club from top banking world

In addition to Hoekstra, Wilko Jiskoot, supervisory director at HEMA and Jumbo, Alexandra Schaapveld, supervisory director at development bank FMO until last year, and Tom de Swaan, chairman of the supervisory board at state bank ABN Amro, are among the investors. The latter was appointed to this position by Hoekstra in 2018.

But according to Hoekstra, that had nothing to do with the ‘club of friends’ that invests in the letterbox company. The CDA member states that he did not know who else was involved. “I was not an active investor and did not read annual reports.”

“Unbelievable”, says Leen Paape, professor of corporate governance at Nyenrode University, in the newspaper. “You can’t hide in that position behind: I haven’t read it. These people know better.”

And that certainly applies to investors with top positions in the Dutch financial sector. “It’s clear and obvious: if you have an interest in a tax haven and you have to decide on the bank’s policy on tax havens, then there is the (appearance of) a conflict of interest,” said Leo Huberts, emeritus professor of public administration. FD. “Even if it’s allowed, we don’t want it. It’s mainly about social decency,” adds Paape.

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