President Obama reacting after the leak of Panama Papers in 2016, said “A lot of it is legal, and that’s exactly the problem.”
That is precisely why I’m surprised that anyone is astonished that Dangote stashed funds in far away Cayman Island. We can debate all day the morality of keeping money and investments in offshore safe heavens, but that won’t alter the lure of cheap taxes and elusive investment processes permissible in safe havens.
That is why Aliko Dangote and other rich people like the Queen, and the Canadian Prime Minister Justine Trudeau will continue to keep money in safe heaven. Even corporations like Twitter, Facebook, Apple and Nike, all seems to have links to offshore account and investments, according to the Paradise papers.
Probably the only reason we care more about Dangote is because he is a Nigerian, and a country where culture demand much from whom much is given, it is rather disappointing that Dangote deemed it okay to stash money abroad.
Greenview International Corp. and the Cayman Connection
In July 16, 1994, Dangote incorporated Greenview in Panama with Vernon Emmanuel, Delio Mela and LiliaTovar De Leon as the president and the nominee directors.
The three executives resigned from the company on August 24, 2015 while Mr. Dangote assumed the role of a sole director and shareholder of the company. Before resigning the executives held a stakeholders meeting and agreed to transfer the jurisdiction of the company from Panama to the Cayman Island.
With Equity worth more than $5.8 billion, according to a summary of Greenview’s 2013 financial statement signed by Dangote, the chief finance officer of Dangote Industries Limited, Mustapha Ibrahim, and the chief operating officer, Olakunle Alake, moving Greenview from Panama to Cayman Island was a move to take advantages of even a better secretive assets management.
In Cayman Island, offshore companies are granted “exempted status”, whereby they can incorporated as an exempted company or ordinary company, and is therefore not required to file details of its shareholders. In addition to no mandatory annual shareholders meeting, it’s also entitled to a tax exemption with up to 30 years of no review.
While Dangote enjoys zero corporate tax in Cayman, he also enjoys a pioneer status tax waiver granted to his cement company in Nigeria, with which he pays very little tax.
Meanwhile Dangote is not denying the existence of the company, but argues that the company just happens to own a lot of investments in Nigeria with majority of shares in Dangote Refinery.
Ask why the company is domiciled abroad instead of Nigeria, and where it hopes to pay its corporate tax, the company explained that its subsidiaries were paying tax (withholding tax). Tax specialist also disputed this claim.