Above: Russian nested dolls fit inside each other - is there a similarity to Shell Corporations?
In a previous post, “Was Crime Boss Meyer Lansky the Godfather of the Caribbean Money-Laundering Shell
Corporation?
“, I promised a post on Shell Corporations in Barbados. Actually I am going to do two posts on this topic, here is the first. I am going to limit myself to just some of the companies involved in multi-million dollar deals with Kingsland Estates Limited.
In this post, I examine five Barbadian companies: SBG Development Corporation (SBG), Classic Investments Ltd. (Classic), Kalahari Inc., Clermont Green Limited (Clermont) and Kingsland Estates Limited (Kingsland). My opinion is that all of the above show characteristics of Shell Corporations.
Brief Summary:
While these companies appear to be doing very little business, they seem to be dealing with extremely large sums of money! Only one of the five actually has a listed telephone number!

  • All of the companies above have been involved in major real estate deals with lands that were not advertised.
  • Documentation is missing from every one! The missing Corporate Registry documentation suggests that all five are in violation of the Companies Act. Circumstances suggest that these violations may be intentional.
  • Kingsland directors spent millions in court so that they could sell their shares to the low bidder, initially represented as an “undisclosed principal“!
  • Three of the five companies, SBG, Classic and Kingsland are defendants in the Canadian Action.

Shell Companies - Main Characteristics
(List based on Shell Corporation definition, also at end of this post.)

  • a company that is incorporated - I rely on the Corporate Registry in Barbados, CAIPO, for this information. (The above image is a hyperlink to the CAIPO site.)
  • has no significant assets - you probably won’t find an office dedicated to the company.
  • has no significant operations - you won’t see the company running an ad in the paper. No listed ‘phone number. No visible evidence of operation.
  • operates in the underground economy - “a market consisting of all commerce on which applicable taxes and/or regulations of trade are being avoided”. I don’t have the tax information, but I feel that not filing audited statements with the Registry is avoiding the regulations of trade1. (see below)
  • situated in tax haven - Wikipedia defines a tax haven is a place where certain taxes are levied at a low rate or not at all. Barbados is a ‘Low-tax regime’ not a ‘Tax haven’. On the other hand, Barbados is listed in the Levin-Coleman-Obama Stop Tax Haven Abuse Act.
Footnote 1: I believe that there are two scenarios with the audited statements. Either

  1. the audits have not been performed, in which case it is unlikely that the correct amount of tax has been paid.
  2. the audits have been performed and the applicable taxes may have been paid in full, yet the directors of the company have deliberately withheld the information. When individuals deliberately withhold financial information … I’d better not go there!

Here is some data (mainly based on CAIPO searches by the Knox family) from July, 2008:

Name of Corporation Number Date
Incorporated
Compliance with Companies Act
S.B.G. DEVELOPMENT CORPORATION 6293 1991-03-07
File missing (2006 search)
KINGSLAND ESTATES LIMITED 1654 1958-07-01 File missing, late
filings. Figures disputed.
KALAHARI INC. 28422 2007-03-15 No audited financial statements filed
CLERMONT GREEN LIMITED 15923 1998-09-22 No audited financial statements filed
CLASSIC INVESTMENTS LIMITED 11693 1996-01-29 No audited financial statements filed

Here is my assessment on whether or not these companies possess the necessary qualifications to be classed as a Shell Corporation. (The shortened company names below are hyperlinked to sources revealing information on both their directors and their operations. My next post on Shell Corporations will be an intriguing exposé on Kalahari and Clermont, which are not yet hyperlinked.)

Kingsland Classic Kalahari Clermont SBG
Incorporated

X

X X X X
no significant assets

 

X* ?
U
no significant operations

X

X X
X
not in compliance with Companies Act

X

X X X X
purpose buying and selling X X X ? X
situated in tax haven (low-tax regime)

X

X X X X

* = at incorporation, ? = implied, U = unknown
Five Apparent Multi-Million Dollar Companies - Only One has a listed Telephone Number!
Further thoughts:

  • The SBG file is missing from the Registry. While
    this is incredible and raises serious questions, the information for this column is pulled from our own files. (The Kingsland file is also missing!)
  • Kingsland has considerable assets, but Classic claimed to have few assets at the time of its incorporation. Kalahari either had few assets at incorporation or was in violation of the Companies Act. Classic and Kalahari appear to be both classic Shell Corporations.
  • Clermont Green Ltd. is actually listed in the white pages as: Ofc Clermont Hgts St M 437-3836. HOWEVER, according to Google, Clermont loses some credibility by sharing this number with five others:

    1. Grantley Adams International Airport, Inc. - Chairman: Colin Brewer
    2. International Rugby Sevens - Mr. Jason Brewer
    3. Island Properties Limited
    4. The Barbados Rugby Football Union
    5. St. Lawrence Gap Apartments
  • Clermont Green Limited appears to have transacted some big business deals: “Clermont Green Limited is offering for sale 36 2-bedroom units of 1165 sq. ft. each, in an exceptional setting with extraordinary mature trees, a lake and swimming pool.” This ad suggests that Clermont Green either has significant assets or profits, yet a Registry search revealed no audited financial statements!
  • All of the above companies appear to be deliberately withholding information, some of which the law requires them to make public.
I decline to state my conclusions, but I encourage you, the reader, to judge the situation for yourself. If you are associated with any of these companies and you dispute any of the content, you are invited either to comment below or to email me confidentially at: keltruth@yahoo.com

A shell corporation is defined in Barron’s Finance & Investment Handbook as “a company that is incorporated, but has no significant assets or operations.” Shell corporations are not in themselves illegal and they may have legitimate business purposes. However, they are a main component of the underground economy, especially those based in tax havens. They may also be known as International Business Corporations (IBCs), Personal Investment Companies (PICs), front companies, or “mailbox” companies. (from Shell Corporation, Wikipedia)
Also from Financial & Investment Dictionary: Shell Corporation

Such corporations may be formed to obtain financing prior to starting operations, in which case an investment in them is highly risky. The term is also used of corporations set up by fraudulent operators as fronts to conceal tax evasion schemes.

Additional reading: