Readers of this blog will have heard of the "Panama Papers." This huge leak of documents from the Panama law firm Mossach Fonseca has disclosed a world of off shore companies, international money flows and concealed identities. One use for these arrangements is to enable tax evasion and money laundering.
The disclosures have so far resulted in the resignation of the Prime Minister of Iceland, and the Prime Minister of Malta is having to consider sacking two of his close ministerial allies as well as facing demands for his own resignation at public demonstrations lead by the parliamentary opposition. In Russia, President Putin has called the disclosures anti Russian propaganda. In China there are some embarrassed (and possibly worried) members of the Politburo.
Here, the revelation that David Cameron's father ran a business established on advice from Mossack Fonseca, from which (not surprisingly) his son benefited, has cast a shadow over the Prime Minister which has led to him issuing five statements over the last week seeking to clarify his financial affairs. In effect the Prime Minister, while insisting that his father did nothing wrong and that he did nothing wrong, has conceded that it "looks bad." Which is why he, after what he has admitted was not a good start and a "bad week", has decided that to regain public confidence he has to submit to an unusual level of disclosure regarding his financial affairs.
But what is this to do with the Local Schools Network? Well LSN is about local schools, and my story is not about Prime Ministers, but local schools amongst others the school at the end of my road - Whitehall Park School.
The story begins with a web site called "Sarawak Report" This is run by a journalist called Clare Rewcastle Brown, formally of the BBC World Service whose Wikipedia entry is here.
Ms Rewcastle Brown, originally from Sarawak, has reported on a number of financial scandals in Malaysia , in particular, and recently, on a scandal related to a company called 1Malaysia Development Berhad (1MDB). This is a strategic development company, wholly owned by the Government of Malaysia. There have been a number of allegations made against this company, to the effect that money given to the company by the Malaysian Government, some of which, in turn originated from development aid, was improperly channelled into private hands.
If you have the stamina there is more information on wikipedia here.
FOLLOW THE MONEY
Ms Rewcastle Brown now claims that following the Panama papers disclosure she can see where at least some of the money has gone. She wrote about this on Sarawak Report. The full text is here. The report states:
"One of the clients of the off-shore incorporations firm Mossack Fonseca, exposed in the so-called Panama Papers this week, was PetroSaudi’s Tarek Obaid."
"Using a web of off-shore vehicles, he and fellow director Patrick Mahony secretly invested some of the millions they obtained in illegal backhanders from Malaysia’s Development fund in a private education company..."
"...Documents acquired by Sarawak Report reveal that the two men are the secret funders behind the self proclaimed entrepreneur, Marwan Naja, who acts as Chairman of Bellevue Education, a fast growing business, which has acquired 12 lucrative schools since 2010..."
.".....Bellevue Education Group...is officially run from Geneva...... the business is primarily owned by two vehicles named Plato One and Plato Two based in Hong Kong, which are in turn controlled by Mahony together with an off-shore company owned by Obaid called Maplehill Property Limited (BVI)."
"In the course of setting up the complex ownership structure in 2010 Marwan (who has just one share) reported he had:"
'taken specific tax advice from a firm of internationally recognised accountants which has confirmed to him in writing that no Tax will be payable.. as a result of any dividends, distributions or other returns..whether during the Investment or following an exit from the Investment.'”
Yes, it is the SAME Bellevue, the Bellevue that, together with Place Group, operating through a Multi Academy Trust called BPET, proudly announce on their website:
"Bellevue Place is a new model for education delivery in the state sector. The Trust is a joint venture between two organisations who are passionate about providing high quality education provision. They bring together the very best of the fee-paying Independent sector – Bellevue Education Ltd – experienced in running 15 independent schools in the UK and Switzerland; with a highly-regarded education consultancy – Place Group – with experience in the state sector for efficiency of supply in setting up new schools and converting academies, along with driving value for money and compliance."
THE SUNDAY TIMES JOINS IN
Ms Rewcastle Brown is not the only reporter to have spotted this connection. On the 10 April a story with the headline;
"Saudi oil tycoon revealed as investor in schools company" appeared in the Sunday Times and went on to say:
"A SAUDI oil tycoon is the joint owner of an education company involved in running some of Britain’s state schools, with his interest held by a British Virgin Islands (BVI) company formed by the law firm Mossack Fonseca."
"The Sunday Times can reveal that Tarek Obaid, the founder of Anglo-Saudi oil company PetroSaudi, is one of the key investors in Bellevue Education, in Hampton Court, Surrey."
"The company’s website says: “Bellevue Education operates seven primary free schools across London and the southeast through a joint venture.” It helps operate the schools in a charitable venture called the Bellevue Place Education Trust (BPET), in east London."
"The biggest shareholder is Obaid via a BVI company called Maplehill Property, which was formed by Mossack Fonseca......"
"PetroSaudi has been caught up in a money laundering investigation after a deal with a Malaysian fund called 1MDB. Fund officials are under investigation, but not the oil firm itself."
The full article can be found here. It is behind a paywall, and so I have quoted from it selectively for copyright reasons.
At time of writing Bellevue Education Group Ltd have not made any response that I know of. (If they are reading this they are welcome to send one to me care of this site)
But Bellevue Place Educational Trust have. Odd really, if they are truly separate bodies - it was Bellevue Education that the Sunday Times contacted and asked for comments. BPET posted their response on their website also on the 10 April. Clearly a busy weekend.
Here is the complete text of their response to the Sunday Times.
BELLEVUE PLACE RESPONSE
"In response to the recently published Sunday Times article Bellevue Place Education Trust wishes to be very clear that the Bellevue shareholder who made an investment in Bellevue Education via a company registered by Mossack Fonseca in the British Virgin Islands has no connection with the Trust.
Bellevue Place Education Trust is a not for profit charitable trust set up with the sole intention to establish and maintain high performing schools in and around London. The Trust was established by two parties, Bellevue Education and Place Group. The Trust’s governance structure is clear as to the structure and who the members and trustees are.
Below for transparency, is our statement we sent to the Sunday Times. We have made it very clear that Bellevue Place Education Trust is a not for profit charity that was approved by the Department for Education to manage and maintain state funded free schools. The Trust is a separate, independent organisation from Bellevue Education that is solely focused on offering high quality education provision to its pupils. We have some fantastic staff and governors who are supporting the delivery of this vision and we aim to see off these allegations as promptly as possible, enabling us to focus on our core purpose.
Below is the statement we have issued we have also included the Department for Education’s clear statement.
Statement from Bellevue Place Education Trust sent to Sunday Times:
“Bellevue Place Education Trust is a multi-academy Trust, sponsoring seven primary Free Schools across London and the South-East. The Trust’s core purpose and responsibility is to establish, maintain and manage state funded Free Schools. All Bellevue Place Education Trust schools are focused to deliver high quality education provision in areas where there is a shortage of primary school places.”
“Bellevue Place Education Trust is an independent charitable organisation, with six trustees, of which one is Mark Malley. Trustees delegate responsibility to a Local Governing Body for each school, who appoint all staff (except the Headteacher), set the schools budget and ensure the curriculum meets the needs of the pupils, in line with the vision of the Trust.”
“In applying to be a Free School promoter, the Trust undertook stringent due diligence and was approved by the Department for Education and Charity Commission.”
A DfE spokesperson:
“We demand the highest moral and professional standards from anyone involved in educating our children and, in common with every free school proposal, Bellevue Place Educational Trust (BPET) was subject to detailed scrutiny. We are clear that no-one will be handed control of a school unless we are entirely happy with the result of the checks.
“Bellevue Education and BPET are separate organisations. Our records show the individual named is not in any way involved in the governance of BTEP schools. There are strict rules that prevent free schools and academies being run as for-profit organisations.
“These include due diligence checks, credit checks, and enhanced Disclosure and Barring Service (formerly Criminal Records Bureau) checks and may include police and other checks necessary to ensure the suitability of people to be part of the free school programme. As part of those checks, we would look at an individual’s association with other people or organisations.”
END OF BELLEVUE PLACE RESPONSE
This story to be continued.......
(The Free Schools run by Bellevue Place are Rutherford House School, Braywick Court School, Whitehall Park Primary School, Kilburn Grange School, Halley House School, Deer Park School, and Watling Park School.)