Tuesday, March 28, 2006

Fumble in the offshore till

Yet more evidence of Ireland's role in, shall we say, interesting international financial transactions -- on top of what's already known about our role in tax avoidance and dodgy insurance deals (WSJ, subs. req'd):

A Russian man's investigation into events surrounding his father's death in 1997 is shedding light on a set of offshore trusts valued at more than $100 million, held in part by current and former senior executives of OAO Lukoil Holdings, Russia's largest oil company.

Using an Irish company as an intermediary, the trusts invested in a small oil-exploration company registered in the Isle of Man that also received financial backing from Lukoil during the same period in the 1990s. The help Lukoil provided to the Isle of Man firm in the form of equity investments and contracts occurred when Lukoil was government-owned, previously undisclosed corporate records from Ireland show, and boosted the value of the Isle of Man firm.

Recall that the Isle of Man is also the preferred home for otherwise taxable income of Swift Boat Veterans financiers, the Wyly brothers, underscoring the amazing popularity of the Irish Sea with the global financial set. However there is no chance that the sourcing of these transactions in Ireland will become an issue in the country unless they rebound in some way on the country. At this point it is impossible to say what such a rebound might look like.

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