By Ritobaan Roy CFO Insight

98 of FTSE100 companies have complex subsidiary structures spread across the world, with a large number concentrated in known tax havens such as Cayman Islands and Mauritius. A report by the charity actionaid asks uncomfortable questions.

SABMiller, the second biggest brewer in the world and number one in Africa, runs its brewery in Accra, Ghana from raw materials from South Africa, with container ships running along the African coast. But why is all the paperwork related to this massive logistics exercise done in Mauritius, 5000 miles away in the Indian Ocean?

These are some questions raised by a recent report by actionaid, a charity, on complex networks of offshore subsidiaries held by companies listed in the FTSE 100, which it says are often used to avoid paying tax in developing countries.

In data compiled from statutory filings, 98 of the FTSE100 – across all sectors- had 8,492 subsidiary entities registered in known tax havens and in places like Ireland and Hong Kong, known for its low tax-light regulation regimes. FTSE 100 companies have 1,685 subsidiaries in UK Crown dependencies such as Jersey, or overseas territories such as the British Virgin Islands (BVI), Bermuda and Gibraltar. SABMiller has 108 such subsidiaries, more than it has breweries and bottling plants in Africa.

The most ‘offshore heavy’ ownership structures belonged to the UK’s big banks – Barclays, Llloyds, RBS and HSBC. RBS, in particular, has 1303 subsidiaries, with 406 in tax haven territories. Overall, 1,780 or 58% of FTSE 100 banks’ overseas companies were in tax havens.

But ‘non-banking’ sectors were not far behind. The retailer with the most subsidiaries in countries dubbed tax havens was Tesco, which had 107, often tied to its financial services provisions.

The only two FTSE 100 companies found to have no subsidiaries in tax havens were the mining group Fresnillo and the financial advice business Hargreaves Lansdown.

For more on this story go to:

http://www.cfo-insight.com/reporting-forecasting/tax/5-biggest-offshore-kings-of-the-ftse100/