James Comer, a member of the UK House of Commons, recently expressed his frustration at a company which was misusing the term shell company.
Comer made his comments following an investigation by The Guardian which revealed that a UK shell company had been used to purchase luxury properties in London. Comer said it was “disappointing that shell companies, which are often set up for legitimate purposes, are being abused and used as mechanisms to hide unlawful activities and enable the money from those activities to flow around the world”.
The investigation revealed that the company was registered in the British Virgin Islands, yet all of its directors were based in the UK. Moreover, the company had been incorporated in the jurisdiction to purchase property in the UK without showing any other business activities or sources of income.
Comer went on to say that “it is concerning that a company with no discernible trading activities was able to purchase significant property assets in the UK and appears to have been used to hide the identity of those moneyed individuals responsible”.
It’s clear from Comer’s comments that he is keen to see shell companies used properly, rather than as a vehicle for tax evasion or money laundering. It remains to be seen whether the UK government will take action to protect the integrity of the global financial system, or if it will merely pay lip service to the problem. Only time will tell.