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Firm’s role in British refund to be revealed

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THE role a Jersey company may have in refunding the British government for the millions it spent repatriating stranded Monarch Airlines customers two years ago should be revealed next year, a UK peer has said.

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Calls have been made for French private equity firm Greybull Capital, which owned Monarch via Jersey company Petrol Jersey Ltd, to reimburse the UK taxpayer after more than £40.5 million was spent bringing back tens of thousands of passengers left abroad after the airline collapsed in October 2017.

Monarch was eventually bought out by US company Boeing and reportedly received a cash injection of millions via Petrol Jersey Ltd, which is its largest shareholder and owned by Greybull.

In a written question submitted to the House of Lords, non-affiliated peer Lord Myners asked what progress the government had made in obtaining a financial contribution from Greybull towards the repatriation costs.

He also asked whether Greybull was likely to make a profit on its investment in Monarch and, if so, would that money be liable to UK tax.

The response, tabled by Baroness Vere of Norbiton, the parliamentary under-secretary for the department for transport, says that there is ‘no formal legal mechanism’ that can force Greybull to make a financial contribution.

It adds that because Petrol Jersey Ltd is based in Jersey the profits may not be taxable in the UK. ‘Greybull Capital is not itself a shareholder in Monarch Airlines, but it does perform an advisory and management role for the principal shareholder, Petrol Jersey Ltd,’ the response says.

‘There is no formal legal mechanism we can use to oblige Greybull to contribute towards the cost of repatriating passengers. However, Marc Meyohas, partner at Greybull, wrote to the Transport Select Committee acknowledging a moral obligation (if they make a profit) to contribute and help to defray the costs incurred by the government in repatriating Monarch customers.

‘The extent of any profit or loss from Greybull Capital and Petrol Jersey Ltd’s investment in Monarch Airlines will depend on the outcome of the administration process, which is not due to conclude until October 2020.

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‘Profits made by corporations are subject to the tax laws relevant to their jurisdiction. Petrol Jersey Ltd is a company which is incorporated in Jersey. It would be for HM Revenue and Customs to confirm whether any such profit would be assessable to tax in the UK.

‘Discussions with Greybull in relation to recovering the costs of the repatriation operation have been in writing. Ministers last wrote to Greybull on this matter on 5 December 2018.’

Greybull also hit the headlines last year due to its ownership of Tata Steel through another Jersey company called Olympus Steel Ltd. Tata went into administration just three years after being bought by Greybull.

Ian Heath

By Ian Heath
author

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