A potential Morrisons buyer has been accused of insulting taxpayers after admitting plans to run the supermarket from the Cayman Islands.
The Mail on Sunday reports that Clayton, Dubilier & Rice (CD&R) told investors it would use a shell company in the Caribbean to operate the Bradford-based grocer.
The firm, which recently offered £7 billion for Morrisons, is heading into an auction next month with rival private equity firm Fortress.
Politicians reacted furiously to the proposal and demanded ministers tighten foreign takeover rules.
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“It beggars belief that one of our biggest supermarkets could soon be bought by a private equity firm using tax havens,” Labour MP Margaret Hodge said.
Last year, the ownership of Asda was transferred to the Jersey tax haven after it was bought by the Issa brothers and TDR Capital.
Conservative MP Kevin Hollinrake said he will write to former Tesco boss Sir Terry Leahy, who is leading CD&R’s bid, for assurances it will pay UK taxes.
Chairman of the MPs’ business committee Darren Jones labelled the lack of government oversight “madness”.
“The idea that private equity can just sweep in, buy up British businesses and move them offshore to reduce the amount of tax they pay, without any rules or regulatory interventions, is… an insult to British taxpayers,” he argued.
CD&R said the entity that will own Morrisons, Market Bidco, will be registered and incorporated in the UK.
It added: “Morrisons will remain registered in the UK, headquartered in Bradford and continue to pay taxes in the UK.”
Earlier this year, the Tax Justice Network ranked the Cayman Islands second in a list of the 70 most “complicit” tax-dodging areas.
When the Issas struck a deal to buy Asda in 2020, it was hailed by Chancellor Rishi Sunak as a return to British hands after being owned by Walmart since the 1990s.
However, the brothers, collectively valued at £3.56 billion, chose to base its parent company in Jersey.
The Crown dependency, ranked eighth on Tax Justice Network’s list, charges a corporate tax rate of zero.
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1 Comment. Leave new
It is quite simple. It must a statutory requirement that all UK companies of a certain size remain UK domiciled regardless of ownership/ultimate ownership.