Paradise Papers: Huge chunk of Dangote’s fortune now kept in tax haven

Aliko Dangote
Aliko Dangote

Africa’s richest man, Aliko Dangote, is no stranger to using shell companies in offshore tax havens. The influential industrialist is one of the prominent figures around the world whose names popped up in the infamous #PanamaPapers database as having links with shell companies in notorious tax havens.

Documents from the leaked internal data of Panama-based offshore provider, Mossack Fonseca, had, in 2016, linked Mr Dangote, alongside his half-brother Sayyu Dantata, to at least 13 shell companies in Seychelles, a rising offshore tax haven.

In 2015, this newspaper, in partnership with French newspaper, Le Monde, also exposed Mr Dangote as one of the owners of secretive foreign accounts with the Swiss branch of banking behemoth, HSBC.

But in what is perhaps his biggest singular involvement with offshore entities yet, Mr Dangote has an equity worth $5.8 billion in Greenview International Corp., a Cayman Islands shell company, PREMIUM TIMES can report.

The Nigerian businessman, who is Africa’s richest personality, is valued at $12.1 billion.

From Panama to Cayman Islands

Documents obtained by PREMIUM TIMES from the leaked database of global offshore law firm, Appleby, as part of the ongoing Paradise Papers reporting, show that Greenview is a classic shell company, originally incorporated by Mr Dangote in Panama in 1994.

The 1.9 terra byte data vault was obtained by German newspaper, Suddeutsche Zeitung, and shared with the International Consortium of Investigative Journalists (ICIJ). The ICIJ in turn shared the data with more than 380 journalists from 96 media organisations in 67 countries.

Documents show that a certain Vernon Emmanuel (who doubles as the president of the company), Delio Mela and LiliaTovar De Leon were appointed nominee directors when the company was first incorporated on July 16, 1994. Nominee directors are residents of a tax haven paid to hide identities of real owners of offshore companies.

The three directors resigned from the company on August 24, 2015 the same day Mr Dangote was named sole director and shareholder of the company.

On June 30, 2015, two months before they resigned, the nominee directors, held a stakeholders meeting and agreed to transfer the jurisdiction of the company from Panama to the Cayman Island.

“The president of the company the company declared, in addition, that the purpose of the meeting was to consider and approve the continua of the company under the jurisdiction of the Cayman Islands,” the minutes of the meeting states.

The reason for transferring the jurisdiction of the company from one offshore jurisdiction to another was not stated in the minutes but an analysis of the company’s 2013 financial statement provides some explanation.

According to a summary of Greenview’s 2013 financial statement signed by Mr. Dangote, the chief finance officer of Dangote Industries Limited, Mustapha Ibrahim, and the chief operating officer, Olakunle Alake, the total equity held by Mr Dangote in the company as at January 2012 was $3 billion. But by December 2013 the value of the company had almost doubled to $5.8 billion.

As his offshore equity grew astronomically, Mr. Dangote probably decided to move his assets to the Cayman Islands. Why he chose that Island to warehouse his assets remained unclear. But experts suggest Cayman Islands is a more liberal tax jurisdiction than most other notorious tax havens.

Experts consider the Islands as the big masquerade of offshore jurisdictions. While Panama is generally seen as a mid-market jurisdiction, banks and investment advisors in Cayman Islands focus on some of the largest trusts and high-dollar private wealth management.

Another incentive luring wealthy business people like Mr. Dangote to Cayman Islands is the exempted status granted offshore companies in the country. Under the country’s Companies Law, companies are either incorporated as an exempted company or ordinary company. Greenview is registered in Cayman Islands as an exempted company with number 302375 on July 27, 2015.

As an exempted company, Greenview is not required to have nominee directors. It is not required to file details of its shareholders, not required to hold annual meeting of its shareholders and is entitled to a tax exemption undertaking that protects it from any future review of the tax law for up to an initial 20 years, which could be extended to 30 years on special application.

Its exempted status also allows Mr Dangote’s company to easily move his equity in the company from Cayman Islands to another jurisdiction that allows the transfer of company incorporated outside it.

Furthermore, Mr Dangote, who has been criticised for exploring loopholes in the pioneer status tax waiver granted his cement company to pay as little tax as possible in Nigeria, will not have to worry about the taxman breathing down his neck. Cayman Island has zero corporation tax. It does not require offshore companies to pay income tax, capital gain tax, inheritance tax, gift tax and wealth tax.

When contacted for comments, Mr Alake, who spoke on behalf of Dangote Industries Limited told PREMIUM TIMES that Greenview is not a Shell company. He explained that the company is a holding company for Mr Dangote’s investment.

“It is an active company registered in Cayman Island,” he told PREMIUM TIMES in Lagos.

“It is a company that owns a lot of investment in Nigeria. Greenview is a majority shareholder in Dangote Refinery. All international and local banks are doing business with it. Dangote has not hidden any assets in a shell company all the assets he has are in Nigeria. It doesn’t matter to have staff of Appleby as directors of Greenview.”

Mr. Alake said he was not sure where PREMIUM TIMES got the $5.8 billion equity held in Greenview. He however did not say what he believe was the exact equity held by Mr Dangote in the company.

“I don’t know where you got your $5.8 billion from but I’m not going to affirm or disclose it,” he said.

When asked why Greenview was incorporated in Cayman Island and not in Nigeria where most of Mr. Dangote’s investments are domiciled, and where it would be required to pay taxes on its investment, Mr Alake said Greenview is not required to pay taxes as the dividends it received from its investments have already be charged withholding tax.

“The income a holding company gets is dividends by its subsidiaries,” he said. “The concept of withholding tax is ‘I’m required by law to pay tax on your behalf.’ And the tax is removed from source.”

But a former chairman of the Federal Inland Revenue Service (FIRS) told PREMIUM TIMES that it is not true that withholding tax is the only tax required of holding entities.

“Dividends are just one type of income,” the expert said. “Others include investment income, management fees and other income by virtue of the business done. These other incomes are subject to Companies Income Tax.

“Yes, [withholding companies] are required to pay Company Income Tax (CIT). However, where income includes dividends, withholding tax on dividend is deemed to be a final tax. Such income is regarded as franked investment income.”

Carlyle Sub-Saharan African Fund Limited

Documents obtained in the Appleby database showed that Mr Dangote also invested $50 million in a Mauritius-incorporated private equity fund, Carlyle Sub-Saharan Fund Limited through Dangote Industries Limited.

The fund, which holds a Mauritius Global Business Company 1 (GBC1) licence, in its confidential placement memorandum dated December 28, 2011 seeking $500 million investments, explained that the fund was needed for “expansion capital investments throughout Sub-Saharan Africa, with a particular focus on South Africa, Nigeria and Kenya.”

The promoters of the fund said the Class “A” ordinary shares it was offering was only available to “sophisticated investors”.

A Class A ordinary share is usually given to a company’s management team and is accompanied with voting powers than a Class B share. This type of share helps keep the control of the company in the hands of senior management executives.

“Founded in 2011 and headed by an experienced team of Africans, Carlyle’s Sub-Saharan Africa investment advisory team, based in Johannesburg, South Africa and Lagos, Nigeria, is one of the most experienced private equity teams on the African continent with over 50 years of combined private equity experience as well as extensive experience in M&A, project finance, consulting and operations, including 30 years in Sub-Saharan Africa,” the company says of itself.

The minimum investment commitment allowed in the five-year fund was $5 million with a promise of targeted gross return of 25 percent.

Some of the documents obtained showed that Mr. Dangote has the highest shares in the fund with 10,919,444 Class A ordinary shares. Some other investors in the fund are the African Development Banks with $50 million and with 5,789,877 Class A shares, Old Mutual Life Assurance (South Africa) with $27.5m, Africa Reinsurance Corporation (Cameroun) with $5m and Sugar Industry Pension Fund – $2m.

As a GBC1 business the fund is only required to pay just three percent in tax. But with the Double Taxation Treaties (DTT) that Mauritius signed with about 43 countries, investors in the fund even pay less taxes.

DTTs are signed between two governments to prevent income of businesses from getting taxed twice and to prevent double non-taxation, but offshore companies exploit loopholes in them to siphon significant portions of their profits to tax havens where they pay little or zero tax. Low-tax countries like Mauritius deliberately sign DTTs with several countries which allow multinationals to engage in treaty –shopping

Mauritius is on the European Union and Oxfam blacklists of world’s worst tax haven. However, in a response to questions from ICIJ, the government of Mauritius argued that the classification of the Indian ocean country as a tax haven was “unfair and based on incomplete information.”

“Mauritius has in fact continuously, and will continue whenever required, to revisit its legislative and institutional framework with a view to reinforcing financial supervision, enhancing transparency and strengthening the regimes to fight tax evasion, terrorist financing, money laundering, corruption and other financial crimes.”


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  • Senator D

    *You are a deceiver or Liar if you deny any of the truths below:*

    *• That President Buhari of Nigeria once remarked that General Sanni Abacha NEVER stole a dime from Nigeria. However, in a twist of fate the Authorities in Jersey Island told Nigerian Government few weeks back that the one condition to return Abacha’s stolen loot to Nigeria is for the current President to publicly announce that Abacha stole money!…APC Progress!!!*

    *• You are just plain wicked if you deny that you NEVER read that Buhari’s government has spent over $3Billion searching for crude oil in the North…An amount that can NEVER be budgeted for health, education or even the Niger Delta where these monies are derived!*

    *• You are just trying to pretend if you haven’t yet seen the YouTube video showing FULANI HERDSMEN feeding a farmer’s Yam harvest to their cows and saying NOTHING WILL HAPPEN!…Buhari for Life President…*

    *• You are part of Nigeria’s problem if you believe the trash that the Economic and Financial Crimes Commission Boss Mr Ibrahim Magu claiming his enemies bought him houses in Dubai…Please where are my enemies???*

    *• You are just trying to half-hearted of you take Buhari’s fight on corruption serious when The Chief of Army Staff under him owns properties in Dubai and Abba Kyari, his Chief of Staff, collected over 500-million naira from MTN to stop the sanctioning of MTN. By the way MTN moved $13billion out of Nigeria without due process…I Love Buhari…*

    *• Finally, you are just plain deceptive if you put Church stickers on your car and doors professing your Faith but your Pastors use security personnel around them. Yes, you are wicked when there are genuine needs to be met at home and your family but you give tithes and offerings to churches…*

    • Sanssouci

      lol

  • Frank Bassey

    Finance Minister, Adeosun had vowed that government will punish all those whose names appear in this matter. I said it earlier on this platform, when Emefiele Jim Ovia …. were mentioned, that they they can only be punished if no associate of the President or APC persons is linked to the Paradise Tax scandal. Now, with Dangote mentioned, the issue is DEAD on arrival. Next matter please.

    • forestgee

      Lol

  • Tunji Olarewaju

    If I were Dangote, I’ll also hide my wealth in a tax haven instead of paying taxes to past and present thieves in government. I’ll never allow my taxes to be hidden in Ikoyi, stolen from IDPs for grass cutting or be used to pay Maina or be used to pay for a president’s sickness abroad while the

    • atakamosu

      I totally agree with you. Lagos state under Ambode has become rapacious in their need to source funds to pay Tinubu 3 billion naira a month while the governor pockets 5 billion naira monthly. So why leave all your money to be the victim if extortion? Even Premium times had exposed Dangote to be further harassed as the APC goons will demand more tribute. Was this a ploy by premium times to punish Dangote for not paying tribute to them as demanded? This sounds like blackmail, if you don’t pay us we will publish the news. After all the norm in Nigerian media is to KILL stories as paid for. Yet this story receives front cover, think about it. How come the Ambode invasion, sealing and seizing the home of a fellow APC lawmaker whom he is attacking by proxy on the order of Tinubu story was KILLED by Premium times, yet they can publish that Dangote is hiding his money abroad? Instead of suppressing news they publish because they were not paid what they demanded. Go figure!

      • kaydutch

        Lagosians are cowards!Tinubu collects rent from Lagos of about 2 or 3 billon naira every month thorough his company Alpha Beta as commission for collecting taxes.

    • Tunsj

      So are you telling us that not paying taxes is a good thing?

      • Tunji Olarewaju

        Are you telling us that looting our taxes is a good thing? I hope you are not

    • Maria

      In that case he can use the money to build hospitals and schools for the poor. You dont have to hide it to do good to humanity or to avoid politicians from stealing it. Your point is shallow.

      • Tunji Olarewaju

        Maria, after calculating your tax, tell me, which government will allow you to spend it the way you choose, especially in a country like Nigeria where the politicians will share it in the name of budgets which they are padding heavily? Come off it, Maria. Maybe, he should just bring in the accrued taxes and use them as charity to build those projects you mentioned

    • VERITAS_ the rock of ages_

      Good to see you here and making comments. do you remember this topic from months back (Apapa-Oworonshoki Road: Outrage Over FG’s Proposed 10-Year Tax Holiday For Dangote). I said some things with facts which have just been exposed by this report. Facts which you disputed. i left the debate to time because Its only a matter of time before these so called “”business men”””” are exposed.

      • Tunji Olarewaju

        Honestly, i was really wrong

  • Biodun

    Finance Minister said operating offshore shell company is not tax evasion – even where the income is not disclosed, One wonders where she earned her own Tax Certification from. Apparently, future discoveries would show she is one of those that are involved in such operations. Non disclosure of Income for tax purposes (that is not an error or unconscious omission) is fraud and very clear evasion and its a punishable crime or she is afraid of those that are involved (see details of the Nigerians contained in panama papers and paradise too) and tell us stories meant for kids….This is not staying on the thin line between evasion and avoidance… it is a case deeply rooted in the heart of evasion…. lets see if indeed all animals are equal.

    • Maria

      The Nigerian rich people dont pay any tax. They dont. That is another grand fraud that no one will ever investigate and bring the perpetrators to justice.

    • Red Card!

      You can invest your money in a tax haven and its not a crime at all. Tax havens are not illegal. They are simply small nations that have no other competitive advantage and the only way they can draw investments to themselves is to create tax free financial institutions and investment options with extreme confidentiality rules.

      The only challenge is that it not only draws wealthy people who wish to keep their taxes low but the confidentiality is inviting to fraudulent funds. However legitimate business men also keep their monies in tax havens. As for Dangote, he has the freedom to spread his assets amongst various regions and under different investment scenarios as long as he has done nothing illegal in acquiring the funds. It’s for safety too because a man at his level can easily become an enemy of powerful politicians and if all his assets are in Nigeria or easily accessible by government agencies then he may have nothing to fall back on if he is being victimized by a government.

    • Red Card!

      Non disclosure of income for tax purposes is different from investment in a tax haven. You can invest your money in a foreign country after paying tax on it in one country. Your tax obligation at that stage is to the country in which you have invested. America is one of the few countries that tax their citizens for income made in foreign lands. Nigeria does not have that tax law for individuals or companies not incorporated in Nigeria.

  • AryLoyds

    Mr Alake, who spoke on behalf of Dangote Industries Limited told PREMIUM TIMES that Greenview is not a Shell company. He explained that the company is a holding company for Mr Dangote’s investment.

    I wonder who this Alake guy is trying to deceive. Deris God Oh .Nothing will happen as usual , Dangote will be getting many awards in the coming months including a Nobel prize in his Humanity to man !

  • Biodun

    for, the benefit of those that don’t know. No matter where you invest – full income must be disclosed… and if there is no tax treaty between Nigeria and the country in which you invested – full Nigerian Tax will be charged – where there is a treaty, there is a procedure to be followed in arriving at what is due to the government. Non disclosure is a fraud and a clear case of evasion.

  • Biodun

    Oga, hear me clearly and do not allow yourself to be deceived. That a country does not have a competitive advantage is not the business of any of the nations far or near to the deprived nation. Every nation looks after itself !! Know it, it is a clear case of consciously planned and executed evasion if it is not declared and every other nation knows it. If you don’t declare, you are evading…period…declaration indicates sincerity of purpose… go study tax laws not just of Nigeria but in other climes and without doubt; you will have a change of mind…… we appreciate the fact that in this ‘kingdom’ – ‘all animals’ are not equal – but that should not becloud are sense of judgement and objectivity – for posterity sake.

    The generations coming behind should read our stories and be proud of a people that are atleast bold enough to speak the truth even if not adopted by way of implementation – but not speaking out in defense of obvious truth and fact clearly known and attested to by our laws will be considered a double tragedy for a generation.

    And you are one of those paid to twist the fact, too bad …. the evil (including lies) that men do…does live after them….It’s just a matter of time…