MPs set to probe Cerberus over toxic-loan ‘tax avoidance’ claims
Evening Standard, 10.02.17
US vulture fund Cerberus Capital is facing fresh scrutiny over allegations that its massive spending spree on toxic loans from the Government was fuelled by tax-avoidance schemes.
MPs are preparing to debate whether the secretive US outfit, which bought £13 billion of toxic Northern Rock loans in 2015, lawfully reduces its tax bill to help outbid rivals to buy distressed loans.
The debate, scheduled for later this month, has been organised by George Kerevan MP, a member of the influential Treasury Select Committee.
Kerevan said: “When Cerberus buys distressed assets, it often uses money from one of its many offshore divisions and there is a clear question here about tax avoidance.
“Why are they outbidding other investors? Is it because they can offset the costs through tax avoidance?”
“I don’t think Cerberus is good for SMEs and growing the economy. The Treasury and banks shouldn’t be offloading assets to a company that doesn’t have a long-term view.”
Economic Secretary to the Treasury Simon Kirby will also be forced to address the debate.
Cerberus has been one of the world’s biggest buyers of bad debt stemming from the financial crisis, having snapped up billions of pounds of property loans from the likes of RBS, Lloyds Banking Group and Clydesdale.
In a rare statement, the company described itself to the Evening Standard as “long-term investors and good corporate citizens”.
It added: “The vast majority of our portfolios are resolved consensually with the borrowers and often involve restructuring and work out plans that span an extended period of time during which we work closely with the borrowers and their businesses.
“Cerberus complies with all applicable tax laws and treaties, and there is no basis to criticise our acquisition structures, which are transparent both to the sellers and the applicable regulators and government entities.”
The company has faced anger in Northern Ireland over its purchase of National Asset Management Agency loans after it emerged €1900 (£1620) was paid in tax on €77 million of profit.
Cerberus is also named in a high-profile court case brought by former Torex Retail chief executive Neil Mitchell, who is suing RBS over allegations it unlawfully conspired with Cerberus and KPMG to force a fire sale of the firm. They deny the claims.
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