A DAMNING report on a massive urban development scheme in Manchester with ties to the Abu Dhabi government has claimed Jersey holding companies were used to move profits and ownership offshore from former council-owned lands.
The report on the Manchester Life development – which has seen housing blocks containing 1,468 private apartments erected between Manchester City Football Club’s Etihad Stadium and the city centre – said parcels of land were sold to subsidiaries of Loom Holdings, a Jersey-registered company.
The report, entitled ‘Manchester Offshored’, also highlighted that the offshore structure had made it ‘difficult to identify any movements in the value of those assets or of changes in ownership after the deal, because the jurisdiction of Jersey requires companies to submit only minimal accounts, raising questions about the transparency and democratic accountability of the Manchester Life developments’.
The report was prepared by University of Sheffield academics Richard Goulding, Adam Leaver and Jonathan Silver.
The development was a partnership between Manchester City FC owner Sheikh Mansour bin Zayed al Nahyan’s (better known as Sheikh Mansour) Abu Dhabi United Group (UDAG) and Manchester City Council.
The 68-page report also questions the council’s decision to partner with the Abu Dhabi regime, which Amnesty International has called the worst human-rights offender in the Middle East.
While Sheikh Mansour is the private owner of UDAG, his brother is the Crown Prince and the Chief of State of the United Arab Emirates.
Sheikh Mansour, meanwhile, is Deputy Prime Minister of the UAE, Minister of Presidential Affairs, a member of the Supreme Petroleum Council and vice-chairman of one of the world’s largest state-owned investment firms, Mubadala Investment Company.
The report claims the council sold a number of properties ‘on the cheap’ to UDAG in a ‘sweetheart deal’, agreeing to a lease of 999 years, for which less than £5 million was paid for 6.9 acres of land.
The report’s authors, however, say the estimated value of the development was £348.9 million, but little profit was returned to the city.
Each parcel of land was sold to Loom Holdings subsidiaries with UDAG as the ultimate beneficial owner. The subsidiaries – Vesta Street Developments, Silk Glass Developments, Loom Cotton Developments, Flour Developments, Blossom Iron Developments, and Glass Developments – are all Jersey Financial Services Commission-registered, with the local address 47 Esplanade.
‘The council claims to have a revenue-sharing or ‘overage’ arrangement with Abu Dhabi partners, but no details of that arrangement have been disclosed,’ the report states. ‘The traceable rental and sales income streams flow to Abu Dhabi interests only.
‘Indeed, it is unclear how the council themselves are keeping track of any uplift in property asset values as part of any overage arrangement, given the reporting is so minimal and takes place in a secrecy jurisdiction,’ it adds.
The report has been covered by the Guardian, the Independent and the New York Times, with Jersey labelled a ‘tax haven’.
‘Our conclusion then is that Manchester Life is an example of a development which, like a vortex, pulls resources of different kinds to its centre before remitting them to another jurisdiction,’ the report says.
‘Manchester Life is in this sense “offshored”. It has offshored ownership of the leaseholds and the property assets.
‘It has offshored aspects of control over this specific set of developments.
‘There is also the risk of offshoring elements of local democratic governance.’
Manchester City Council has said it disagrees with the report and that, as a result of the development, a neglected area of the city has been transformed.
‘In response to our queries, Manchester City Council said that all leases achieved best consideration, were underwritten by a red book valuation at the time and involved the payment of a premium,’ the report notes.
