BENEFICIAL OWNERSHIP: A TALE OF TWO TRANSPARENCIES
Much has been made recently by the UK Government and media of the degree of transparency of the regulators and financial industries of the offshore centres. Here in Guernsey I have spoken to more than one person who takes the view that the UK are pointing at the splinter in someone else’s eye when they have a Giant Redwood in their own.
I’ll use one example of the transparency of Guernsey and one from the UK. Here is the Guernsey one:
My investigation, as an ordinary citizen with 23 years of previous experience in the local finance sector, into who is or was responsible for regulation at and of Castle Holdings has hit hurdle after hurdle.
I am concluding that it’s no wonder there is such a reputation for offshore secrecy. The proper channels don’t work, and the media is increasingly leaving more and more gaps for us to fill and creating confusion. (For example, here the GP reporter knew that the owners lived in the IOM and didn’t report that, neither has it been explained whose money was stolen. The Island Fm reporter said that Nolan’s house had been sold to recover costs but this, according to the GP reporter who reported that Nolan lived in rented accommodation, is wholly wrong. He also told me that quite a few of the questions I am asking (see list below) were asked in Court. So it now seems that we are being required to do the journalists’ job and go and examine the Court transcripts. Are these available and can we obtain copies for free? It’s not entirely clear to me from this http://www.guernseyroyalcourt.gg/article/6868/An-Overview but it would seem to mean visiting the court during the day, and most people have day jobs. As I said, this surely is the job of journalists if they are to fulfil their “bringing accountability” duty to the community.
There are various Castle Holdings Ltds around the world and contrary to previous indications, I am told unofficially (but by two reliable sources) that it is the Guernsey one we should be looking at and that the company had its license rescinded by the Guernsey Financial Services Commission when the Castle Holdings affair came to light and that related information should be available on the GFSC’s site. But I’m darned if I can see it. I’m also told that Castle Holdings reformed under another name but my source couldn’t remember the new name. It was then suggested that if the GFSC’s site is anything like the FCA’s in the UK we should be able to trace the new company by keying the names of individuals because any proper regulator would have a list of the principals of each licensed company on the site, so you could key in the individuals name and see what companies they were principals of. There doesn’t seem to be such a facility on the GFSC site, although I’m no expert and it’s not a site I use regularly. But I shouldn’t have to be an IT expert should I?
Furthermore when the story broke and I started asking questions, “Go to the Companies Registry” said everyone. I am now told, however, that the Guernsey Companies Registry lags months, even a year behind -so that is not entirely reliable either.
Even the GFSC’s contact details are rather murky – no email address, just one of those automatic things when we are required to give our details. I have never ever received a reply from anyone when I have used this sort of facility on any website.
You’d have thought, given the current issues with offshore secrecy and criticism of the GFSC itself, and all the talk about image and confidence in the industry and regulator, the Commission would have come out on the front foot when this story hit the headlines. Instead there has been complete silence.
Obvious questions arising from the initial Press report:
How did Castle Holdings not miss £550k in 70 payments over 13 months?
Whose money has been stolen –is it client money, or is it the owners’ money? (I later learned that the court was told that the owners reside in the Isle of Man)
Why aren’t the victims mentioned in the Press report?
Who is behind Castle Holdings?
The full report in the Press said that the Money Laundering Officer was the first to notice that something was wrong because she noticed that one of the transactions went through on a day on which the office was closed. Does this mean that Nolan had access to the office on days when it was closed?
Why were the systems which enable external transfers operable on days when the office was closed, and why was Nolan able to access these on his own?
If there is a Money Laundering Officer, that implies that the company is regulated. According to the Guernsey registry, the Castle Holdings Ltd registered here (and there are others elsewhere) is unregulated. So who is the regulator and why aren’t they all over this (or if they are, what are they doing and saying about it)?
Nolan’s first offence presumably was when he was still in his probationary period –where was the monitoring?
In my time in finance before the GFSC came along with its rule book, an outgoing payment would pass through the hands of seven different people. Is there a four eyes (never mind 14!) principle at Castle Holdings?
Where was Lee Nolan before coming to Guernsey? What was he doing in Guernsey between 2011 and joining Castle Holdings in2013?
Didn’t Castle Holdings query his lifestyle?
£40k was laundered by Nolan’s mates. Where did other £500k get paid to? Did those banks report suspicion?
Now the UK example, which I am mostly taking from the “UK Column”:
The UK Government has been declared the most transparent in the world by the World Wide Web Federation http://www.bbc.co.uk/news/uk-30883472 although it still has some way to go according to Tim Berners-Lee, founder of the WWWF.
Access to Government data has become the poster of the “Big Data” movement. The PR gloss equates openness with democracy; the more open a society is, the more democratic it is. Therefore the more Government statistics you publish, the more democratically you have been elected, and the greater the credibility of your claims to represent your electorate’s wishes.
But does openness really have so much to do with democracy? Is the Freedom of Information mechanism delivering better results now than people were able to obtain 20 years ago? I can say from my own experience that the FoI authorities continue to complete ignore requests regarding Guernsey Police Chief Patrick Rice’s potential involvement with Common Purpose when he was in the UK.
What Berners-Lee calls for is access to huge amounts of raw datasets. There are already around 20,000 datasets published at http://data.gov.uk/
The UK Column chose a dataset at random to see if the data available was useful to the public or journalists, seeing that it is these two groups with the most interest in holding Government to account. This is what the UKC wrote:
“The dataset chosen is “English Indices of Deprivation 2010” This dataset has an openness rating of 3 out of 5. The synopsis states, “the English Indices of Deprivation 2010 provide a relative measure of deprivation at small area level across England. Areas are ranked from least deprived to most deprived on seven different dimensions of deprivation and an overall composite measure of multiple deprivation.”
Opening the dataset file results in a table of data. The summary file says, “the file contains information about the LSOA level scores and ranks for the Index of Multiple Deprivation 2010”
The table headings are: “LSOA Code”, “LA Code”, “LA Name” “GOR Code”, “GOR Name”, “IMD Score” “Rank ofIMD Score”. None of these headings are explained. If we take “LSOA Code” as an example, this stands for “Lower Layer Super Output Area” which is a geographic coding system created by the Office for National Statistics. The data.gov.uk website provides a dataset so that boundaries can be mapped. So that’s a second dataset which needs to be downloaded and processed in order to make sense of the first one.
The upshot of all this is that data has been published, yes. It is freely available and copyright free. But looking through this and other datasets available they are completely meaningless to ordinary people and quite probably, journalists.
So who benefits? The data.gov.uk site gives a clue: government websites and academic researchers, but mainly corporations such as Google Experian and Deloitte. It is this use of “open data” which should give cause for concern. It is certainly not “democratic”.
For the average man in the street there is no benefit. He still has to trust the organisations with the resources to process the data. Or not.”