From Harvey Weinstein to Shakira, the celebrities with offshore interests

Martha Stewart, Madonna and Nicole Kidman are among those named in leaked Paradise Papers documents

They are some of the biggest names in entertainment, and all of them make an appearance in the Paradise Papers. Some do so by name, such as the Ciccone, Madonna listed in tiny print among the investors of a Bermuda company, while others are there by dint of the offshore entities they have backed.

Some of the celebrities interests are historical, others contemporary. Some are similar to those of the singer Shakira, who holds a substantial portion of her showbusiness earnings offshore.

Others such as Justin Timberlake and Nicole Kidman seem more interested in acquiring property in the Bahamas, and may have real estate or privacy reasons for registering companies in those jurisdictions.

Whatever the motive, there is nothing illegal about moving money offshore and nothing to suggest that any of those named below had any unlawful purpose. But the industry has evolved and grown exponentially in recent years and political and public attitudes to offshore regimes have changed equally dramatically.

The current political climate raises legitimate questions about the actions of wealthy and well-known individuals: what benefit were they hoping for and will they continue to use such vehicles following the Paradise Papers revelations?

Harvey Weinstein

Harvey
Harvey Weinstein. Photograph: Robyn Beck/AFP/Getty Images
The
disgraced movie producer Harvey Weinstein invested in the now-defunct Bermuda-based medical venture capital firm Scientia Health Group Ltd. Weinstein took out 2,000 shares in the company in November 2001, leaked files from the law firm Appleby show.

He gave as his contact point the name of Richard Koenigsberg, one of the directors of the Weinstein Company who last month fired the film mogul after several women accused him of sexual harassment.

It is not known whether Weinstein sold his stake in Scientia before it went out of business. He did not respond to Guardian questions.

Martha Stewart

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Martha Stewart. Photograph: Lovekin/WWD/Rex/Shutterstock

The lifestyle guru Martha Stewart was also an investor in Scientia. The company was founded by Samuel Waksal, who at the time was also chief executive of ImClone.

Stewart took out a stake in both of Waksals companies. It was her decision to sell about $230,000 (174,000) of shares in ImClone in December 2001, a day before the release of an adverse US Food and Drug Administration ruling, that landed her in insider-dealing trouble, with Stewart and Waksal ending up in prison.

Stewart declined to comment on her historical Bermuda investment.

Madonna

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figcaption class=”caption” caption–img caption caption–img” itemprop=”description”> Madonna. Photograph: Kevin Mazur/WireImage

Tucked away on page 31 of one of the 7m documents contained in the Appleby leak is an entry in tiny print for a company shareholder, listed with her last name followed by first name: Ciccone, Madonna. The suspicion that this report may refer to Madonna Louise Ciccone, better known simply as Madonna, is strengthened by the address given for the holder, the Manhattan offices of Provident Financial Management, which specialises in managing tours and live performances in the music industry and has worked for the queen of pop.

Madonna is listed as having bought 2,000 shares in the Bermuda-incorporated company SafeGard Medical Ltd in1998.

What the star was doing investing in a medical company based in a tax haven remains a mystery, as does whether or not she sold her shares before the entity was dissolved in 2013. While it was active, SafeGard produced medical equipment such as retractable syringes.

The Guardian asked Madonna through her London-based publicist to illuminate the subject, but she did not reply.

Justin Timberlake

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Justin Timberlake. Photograph: Kevin Winter/Getty Images

In August 2015, the musician and actor Justin Timberlake created a Delaware company with a similar name to his record label Tennman Records. Legal documents contained in the Paradise Papers show the limited liability company was set up with Timberlake as its sole member and his Los Angeles-based accountant, Michael Dreyer, as manager.

The purpose of the company, the documents show, was to engage in the purchase of real estate in the Bahamas. Four months after setting it up, Timberlake moved to register the entity as a foreign company in the Bahamas.

Why Timberlake was keen to have a company structure for buying real estate in the Bahamas remains unclear, and the star did not respond to a Guardian request for comment. A clue is provided, perhaps, in another Appleby document showing that a month before the holding was set up, a separate entity called Nexus Luxury Collection Ltd was incorporated in the Bahamas as an international business company.

Timberlake is the main partner in Nexus Luxury Collection along with the golfer Tiger Woods and financier Joe Lewis. One of its prime assets is an 18-hole golf course in Albany, a resort community in the Bahamas.

Nicole Kidman

Nicole
Nicole Kidman and Keith Urban. Photograph: Mike Blake/Reuters
The actor
Nicole Kidman and her country musician husband, Keith Urban, registered their joint US-based limited liability company as a foreign entity in the Bahamas in March 2015. Leaked documents show their aim was to secure ownership of interests in real property in the tax haven using a portion of their wealth.

If the celebrity couple were to buy and later sell a property on the island, they would be subject to taxation on any increase in its value. Were they to do so as a Bahamian entity, they would face individual levels of US tax on the rise anything up to 39.6%.

By contrast, setting up a US-based limited liability company and registering it in the Bahamas as they did would allow them to treat the increase in price as capital gains. That way, they would only pay an effective rate of 23.8%.

A spokesman for Kidman and Urban said tax was irrelevant to the way they structured their affairs. The registering of the US company in the Bahamas was solely to comply with local laws and to hold Bahamian property and protect their familys privacy. The company is taxed under US law and no special tax advantages accrue to them or the company. They are taxed as if they owned the property directly.

Shakira

Shakira
Shakira. Photograph: ddp USA/Rex Shutterstock

The Colombian singer-songwriter makes an appearance in the documents under her full name, Shakira Isabel Mebarak Ripoll. The Grammy award-winner, who released her first album when she was 13, is listed as a resident of the Bahamas even though she lives in Barcelona.

She is alsothe sole shareholder of Tournesol Ltd, a Malta company with 3m in share capital. Malta, the smallest EU member state, has faced accusations that it operates as a tax haven.

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What are the Paradise Papers?

The Paradise Papers is a special investigation by the Guardian and 95 media partners worldwide into a leak of 13.4m files from two offshore service providers and 19 tax havens’ company registries. The files reveal the offshore financial affairs of some of the worlds biggest multinational companies and richest individuals, and set out the myriad ways in which tax can be avoided using artificial structures

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The Paradise Papers reveal that in June 2009 Shakiras musical assets, intellectual property rights and trademarks were moved to Tournesol. At the same time the Malta-based business increased its capital with a share premium of 31m following a valuation of those musical assets by the New York consultancy Gelfand, Rennert & Feldman.

The 31m came in the form of an interest-free loan agreement from another Shakira entity in Luxembourg named ACE Entertainment. The loan was annulled in 2014.

A lawyer representing the singer told the consortium of journalists working on the Paradise Papers that Tournesol Ltd fulfils all legal requirements. All of the corresponding information relative to this entity is public and transparent.

Asked about her listed residence in the Bahamas, the lawyer added that as an international artist Shakira had lived in a variety of places throughout her professional career and, in every case, has fully met the laws of all the jurisdictions where she has resided.

Quick Guide

Key revelations from the Paradise Papers

1)Millions of pounds from the Queens private estate has been invested in a Cayman Islands fund and some of her money went to a retailer accused of exploiting poor families.

2)Prince Charless estate made a big profiton a stake in his friends offshore firm.

3)Extensive offshore dealings by Donald Trumps cabinet members, advisers and donors, including substantial payments froma firm co-owned by Vladimir Putins son-in-law to the shipping group of the US commerce secretary, Wilbur Ross.

4)Twitter and Facebook received hundreds of millions of dollars in investments that can be traced back to Russian state financial institutions.

5) The tax-avoiding Cayman Islands trustmanaged by the Canadian prime minister Justin Trudeaus chief moneyman.

6) TheFormula One champion Lewis Hamilton avoided taxes on a 17m jetusing an Isle of Man scheme.

7) A previously unknown$450m offshore trust that has sheltered the wealth of Lord Ashcroft.

8)Oxford and Cambridgeandtop US universitiesinvested offshore, with some of the money going into fossil fuel industries.

9) Theman managing Angolas sovereign wealth fund invested it in projects he stood to profit from.

10)Apple secretly moved parts of its empire to Jerseyafter a row over its tax affairs.

11) How the sportswear giantNike stays one step ahead of the taxman.

12)The billions in tax refunds by the Isle of Man and Malta to the owners of private jets and luxury yachts.

13)Offshore cash helped fund Steve Bannon’s attacks on Hillary Clinton.

14) Thesecret loan and alliance used by the London-listed multinational Glencorein its efforts to secure lucrative mining rights in the Democratic Republic of the Congo.

15) Thecomplex offshore webs used by two Russian billionairesto buy stakes in Arsenal and Everton football clubs.

16) Stars of theBBC hit sitcom Mrs Brown’s Boys used a web of offshore companies to avoid tax.

17) An ex-minister who defended tax avoidance has a Bahamas trust fund.

18) TheDukes of Westminster pumped millions into secretive offshore firms.

19) A tax haven lobby group boasted of ‘superb penetration’ at the top of the UK government before a G8 summit that was expected to bring in greater offshore transparency.

20) The law firm at the centre of the Paradise Papers leak was criticised for ‘persistent failures’ on terrorist financing and money laundering rules.

21) SevenRepublican super-donorskeep money in tax havens.

22) A topDemocratic donor built up a vast $8bn private wealth fundin Bermuda.

23) The schemes used to avoid tax on UK property deals.

24) Thecelebrities, from Harvey Weinstein to Shakira, with offshore interests.

25) How aprivate equity firm tried to extract 890m from a struggling care home operatorby making it take out a costly loan.

Read more: https://www.theguardian.com/news/2017/nov/08/harvey-weinstein-shakira-martha-stewart-madonna-nicole-kidman-offshore

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