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The beleaguered former prime minister and current Conservative Party chairman Nadim Zahawy is under pressure to reveal the origin of an unsecured loan of around £30m to his wife’s UK property firm.
The loan was used to finance part of a large UK property portfolio and was reported to be worth around £100m last year, with the company’s accounts spanning the period 2017-2021. Declared but no information as to who the lender is.
Calls for greater transparency have asked the former prime minister to explain how his family’s wealth has been managed after he was embroiled in a controversy over tax issues that prompted the government to launch an ethics inquiry. This is the latest request.
The account provides just under £30m in unsecured loans to company Zahawi & Zahawi, which paid out £60m on a property portfolio that includes commercial and retail properties in Walton-on-Thames, London, Birmingham, Brighton and Surrey. indicates that the
Zahawi & Zahawi was founded in 2010 when it was jointly owned by MP and his wife, Lana Saib, who transferred her 50% stake to her when she became deputy minister in January 2018.
Mr Zahawi’s tax affairs have been entrusted to independent counsel on ministry standards and he is confident he has consistently acted appropriately, he added. I will continue my duties as Chairman of the Conservative Party and the Unionist Party, so there will be no further problems. ”
Zahawi is fighting to salvage his political career after admitting to reaching a tax settlement with HM Revenue and Customs (HMRC) following a “mistake” regarding a capital gain from the sale of YouGov shares. increase.
The former prime minister is facing scrutiny over a tranche of shares in the pollster YouGov, which he co-founded, held by Gibraltar firm Balshore Investments and sold for around £27m between 2006 and 2018. Estimated by a think tank, Mr Tax Policy Associates could have avoided £3.7m in capital gains tax on the sale of these shares.
Dan Needle, a tax attorney, founder of Tax Policy Associates and the first to raise awareness of the Zahawi family’s finances, said: These loans could be from Elvis, as far as we know, but it is true that someone made his £30m loan to the Zahawi family and that person cannot be specified. ”
Prem Sikka, Labor Member of the Senate and Emeritus Professor of Accountancy at the Universities of Essex and Sheffield, added: Given Zahawi’s tax concerns, further clarification is needed. Ethics advisers should also look at these issues. ”
According to the account, the loan in question was not secured against the property. Most real estate loans are secured against the building itself and the lender’s name is often listed in the land register or UK corporate register known as a company house.
Land Registry records show that Zahawi & Zahawi currently own 17 property titles, including three buildings acquired in central Wimbledon for around £19m in 2016, which It includes the grounds and office blocks of NatWest Bank. In 2019 he acquired the Guildhall Building in Birmingham for £12m and converted into office space. And his £6.3m retail store in Cambridgeshire, purchased in 2021, is the site of a co-op supermarket.
The commercial property is separate from the couple’s privately owned residential property owned in the names of Zahawi and Sayb and includes a £13.75m house purchased ten years ago in the Belgravia crescent. increase. The family also owns a painting and riding school complex in Warwickshire.
In the year to June 2018, Zahawi and Zahawi accounts saw loans increase by over £12m to nearly £27m. After Zahawi handed over control of the company to his wife and assumed a third role as junior minister overseeing the rollout of a Covid-19 vaccine, the latest filings show an additional $3 million by June 2021. Indicates that the pound has been financed.
Saib also owns two real estate companies founded in 2018.
A £8.74m directors’ loan was advanced to retail and land owner Zahawi Brierley Hill, and a £3.34m directors’ loan was made available to land owner Zahawi Wantage, according to a recent Company’s House filing. it was done.
Saib is the sole director, but there are no further disclosures about the source of funding.
A Zahawi spokesperson echoed earlier statements on the matter, with Zahawi stating: I look forward to explaining the facts of this matter to Sir Laurie Magnus and his team.
“I am confident that I have acted appropriately throughout and look forward to answering any specific questions in a formal manner to Lord Raleigh.
“For this reason, please understand that I will not comment further.”
The spokesperson added that when Mr Zahawi became minister, he withdrew from all his outside interests, in line with ministerial regulations.
She did not respond to Saib’s request for comment.
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