JERSEY’S company disclosure rules have obstructed attempts to establish who benefited from a multimillion-pound property partnership between Manchester City Council and Abu Dhabi investors, an offshore accounting expert has said.
Professor Adam Leaver described the Island as a “secrecy jurisdiction” and said the lack of publicly accessible company accounts prevented researchers from fully examining the finances of Manchester Life.
The partnership, involving council-owned land and leaseholds, has come under increased scrutiny following a ruling against Manchester City Football Club.
On 29 September, an independent commission found the club guilty of almost all of the 115 charges concerning breaches of Premier League financial rules and failures to cooperate with its investigation. The club denies wrongdoing and has appealed.
Manchester Life brought the council and Abu Dhabi United Group investors together for high-value property developments across the city.
Although the council held stakes in the joint-venture development companies, the 2022 public interest report Manchester Offshored found that the property assets were held separately through Jersey-based companies ultimately owned by ADUG.
The report, co-authored by Professor Leaver, estimated the portfolio’s value at nearly £350 million. It also recorded that one development, Lampwick, had subsequently been sold to another investor.
It concluded that the Island’s “minimal reporting requirements” made it “impossible” to “understand the full economics” of the developments.
“Consequently,” it added, “it is difficult to say whether the best use of land and money was achieved.”
Professor Leaver told the JEP that Jersey’s “disclosure arrangements prevent outsiders from examining important parts of a company’s financial affairs”.
“In Manchester Life, this mattered because the property asset-owning companies were located in Jersey,” he said. “Much of the information needed to assess ‘who benefited’ sat outside the publicly accessible UK accounts.
“We could trace substantial parts of the structure, but couldn’t assess this crucial final point about who benefits.”
He described the lack of access to the Jersey companies’ accounts as a “significant obstacle” to the investigation.
“The central problem is not that Jersey companies use different accounting standards,” he said. “It is that the public does not have equivalent access to their accounts.
“With ADUG, we can trace the structure up to Jersey but we could not scrutinise the full financial results once there.”
Professor Leaver said that, although responsibility for transparency “extends beyond Jersey’s government”, the Island could require private companies to publish annual accounts.
These should include “meaningful disclosure of revenues, costs, assets, liabilities, related-party transactions”.
For projects such as Manchester Life, individual company accounts “could also be accompanied by explanation of the ownership structure and a reconciliation of transactions between the entities, which were difficult to trace”.
He acknowledged some “progress” through the Register of Overseas Entities, which requires Jersey-incorporated companies owning UK land to identify their registrable beneficial owners.
However, “knowing who owns a property company” did not “tell us its profits, financing costs [and] distributions”.
Professor Leaver suggested that UK Prime Minister Andy Burnham could help close the gap.
“Successive UK governments have allowed an important gap to persist between transparency about ownership and transparency about financial performance”, he said.
“Jersey is a self-governing Crown Dependency, rather than part of the UK, so Westminster does not administer its company law.
“Nevertheless, that constitutional distinction does not prevent the UK from setting stronger disclosure conditions for access to UK public land, funding and development partnerships.”
He said Mr Burnham “could make publication of the full project economics a condition of future publicly supported developments, wherever the participating companies are incorporated.
“He could also pursue wider financial reporting requirements for overseas entities holding UK property, alongside cooperation with Jersey on public access to accounts.”
Professor Leaver concluded: “The principle is straightforward: using an offshore company should not diminish accountability for the use of public assets, or joint ventures with local authorities.”
