Africa's richest man, Aliko Dangote, is no stranger to using shell companies in offshore tax havens. The influential industrialist is one of the prominent figures around the world whose names popped up in the infamous #PanamaPapers database as having links with shell companies in notorious tax havens.
Documents from the leaked internal data of Panama-based offshore provider, Mossack Fonseca, had, in 2016, linked Mr Dangote, alongside his half-brother Sayyu Dantata, to at least 13 shell companies in Seychelles, a rising offshore tax haven.
In 2015, this newspaper, in partnership with French newspaper, Le Monde, also exposed Mr Dangote as one of the owners of secretive foreign accounts with the Swiss branch of banking behemoth, HSBC.
But in what is perhaps his biggest singular involvement with offshore entities yet, Mr Dangote has an equity worth $5.8 billion in Greenview International Corp., a Cayman Islands shell company, PREMIUM TIMES can report.
The Nigerian businessman, who is Africa's richest personality, is valued at $12.1 billion.
From Panama to Cayman Islands
Documents obtained by PREMIUM TIMES from the leaked database of global offshore law firm, Appleby, as part of the ongoing Paradise Papers reporting, show that Greenview is a classic shell company, originally incorporated by Mr Dangote in Panama in 1994.
The 1.9 terra byte data vault was obtained by German newspaper, Suddeutsche Zeitung, and shared with the International Consortium of Investigative Journalists (ICIJ). The ICIJ in turn shared the data with more than 380 journalists from 96 media organisations in 67 countries.
Documents show that a certain Vernon Emmanuel (who doubles as the president of the company), Delio Mela and LiliaTovar De Leon were appointed nominee directors when the company was first incorporated on July 16, 1994. Nominee directors are residents of a tax haven paid to hide identities of real owners of offshore companies.
The three directors resigned from the company on August 24, 2015 the same day Mr Dangote was named sole director and shareholder of the company.
On June 30, 2015, two months before they resigned, the nominee directors, held a stakeholders meeting and agreed to transfer the jurisdiction of the company from Panama to the Cayman Island.
"The president of the company the company declared, in addition, that the purpose of the meeting was to consider and approve the continua of the company under the jurisdiction of the Cayman Islands," the minutes of the meeting states.
The reason for transferring the jurisdiction of the company from one offshore jurisdiction to another was not stated in the minutes but an analysis of the company's 2013 financial statement provides some explanation.
According to a summary of Greenview's 2013 financial statement signed by Mr. Dangote, the chief finance officer of Dangote Industries Limited, Mustapha Ibrahim, and the chief operating officer, Olakunle Alake, the total equity held by Mr Dangote in the company as at January 2012 was $3 billion. But by December 2013 the value of the company has almost doubled to $5.8 billion.
As his offshore equity grew astronomically, Mr. Dangote probably decided to move his assets to the Cayman Islands. Why he chose that Island to warehouse his assets remained unclear. But experts suggest Cayman Islands is a more liberal tax jurisdiction than most other notorious tax havens.
Experts consider the Islands as the big masquerade of offshore jurisdictions. While Panama is generally seen as a mid-market jurisdiction, banks and investment advisors in Cayman Islands focus on some of the largest trusts and high-dollar private wealth management.
Another incentive luring wealthy business people like Mr. Dangote to Cayman Islands is the exempted status granted offshore companies in the country. Under the country's Companies Law, companies are either incorporated as an exempted company or ordinary company. Greenview is registered in Cayman Islands as an exempted company with number 302375 on July 27, 2015.
As an exempted company, Greenview is not required to have nominee directors. It is not required to file details of its shareholders, not required to hold annual meeting of its shareholders and is entitled to a tax exemption undertaking that protects it from any future review of the tax law for up to an initial 20 years, which could be extended to 30 years on special application.
Its exempted status also allows Mr Dangote's company to easily move his equity in the company from Cayman Islands to another jurisdiction that allows the transfer of company incorporated outside it.
Furthermore, Mr Dangote, who has been criticised for exploring loopholes in the pioneer status tax waiver granted his cement company to pay as little tax as possible in Nigeria, will not have to worry about the taxman breathing down his neck. Cayman Island has zero corporation tax. It does not require offshore companies to pay income tax, capital gain tax, inheritance tax, gift tax and wealth tax.
When contacted for comments, Mr Alake, who spoke on behalf of Dangote Industries Limited told PREMIUM TIMES that Greenview is not a Shell company. He explained that the company is a holding company for Mr Dangote's investment.
"It is an active company registered in Cayman Island," he told PREMIUM TIMES in Lagos.
"It is a company that owns a lot of investment in Nigeria. Greenview is a majority shareholder in Dangote Refinery. All international and local banks are doing business with it. Dangote has not hidden any assets in a shell company all the assets he has are in Nigeria. It doesn't matter to have staff of Appleby as directors of Greenview."
Mr. Alake said he was not sure where PREMIUM TIMES got the $5.8 billion equity held in Greenview. He however did not say what he believe was the exact equity held by Mr Dangote in the company.
"I don't know where you got your $5.8 billion from but I'm not going to affirm or disclose it," he said.
When asked why Greenview was incorporated in Cayman Island and not in Nigeria where most of Mr. Dangote's investments are domiciled, and where it would be required to pay taxes on its investment, Mr Alake said Greenview is not required to pay taxes as the dividends it received from its investments have already be charged withholding tax.
"The income a holding company gets is dividends by its subsidiaries," he said. "The concept of withholding tax is 'I'm required by law to pay tax on your behalf.' And the tax is removed from source."
But a former chairman of the Federal Inland Revenue Service (FIRS) told PREMIUM TIMES that it is not true that withholding tax is the only tax required of holding entities.
"Dividends are just one type of income," the expert said. "Others include investment income, management fees and other income by virtue of the business done. These other incomes are subject to Companies Income Tax.
"Yes, [withholding companies] are required to pay Company Income Tax (CIT). However, where income includes dividends, withholding tax on dividend is deemed to be a final tax. Such income is regarded as franked investment income."
Carlyle Sub-Saharan African Fund Limited
Documents obtained in the Appleby database showed that Mr Dangote also invested $50 million in a Mauritius-incorporated private equity fund, Carlyle Sub-Saharan Fund Limited through Dangote Industries Limited.
The fund, which holds a Mauritius Global Business Company 1 (GBC1) licence, in its confidential placement memorandum dated December 28, 2011 seeking $500 million investments, explained that the fund was needed for "expansion capital investments throughout Sub-Saharan Africa, with a particular focus on South Africa, Nigeria and Kenya."
The promoters of the fund said the Class "A" ordinary shares it was offering was only available to "sophisticated investors".
A Class A ordinary share is usually given to a company's management team and is accompanied with voting powers than a Class B share. This type of share helps keep the control of the company in the hands of senior management executives.
"Founded in 2011 and headed by an experienced team of Africans, Carlyle's Sub-Saharan Africa investment advisory team, based in Johannesburg, South Africa and Lagos, Nigeria, is one of the most experienced private equity teams on the African continent with over 50 years of combined private equity experience as well as extensive experience in M&A, project finance, consulting and operations, including 30 years in Sub-Saharan Africa," the company says of itself.
The minimum investment commitment allowed in the five-year fund was $5 million with a promise of targeted gross return of 25 percent.
Some of the documents obtained showed that Mr. Dangote has the highest shares in the fund with 10,919,444 Class A ordinary shares. Some other investors in the fund are the African Development Banks with $50 million and with 5,789,877 Class A shares, Old Mutual Life Assurance (South Africa) with $27.5m, Africa Reinsurance Corporation (Cameroun) with $5m and Sugar Industry Pension Fund - $2m.
As a GBC1 business the fund is only required to pay just three percent in tax. But with the Double Taxation Treaties (DTT) that Mauritius signed with about 43 countries, investors in the fund even pay less taxes.
DTTs are signed between two governments to prevent income of businesses from getting taxed twice and to prevent double non-taxation, but offshore companies exploit loopholes in them to siphon significant portions of their profits to tax havens where they pay little or zero tax. Low-tax countries like Mauritius deliberately sign DTTs with several countries which allow multinationals to engage in treaty -shopping
Mauritius is on the European Union and Oxfam blacklists of world's worst tax haven. However, in a response to questions from ICIJ, the government of Mauritius argued that the classification of the Indian ocean country as a tax haven was "unfair and based on incomplete information."
"Mauritius has in fact continuously, and will continue whenever required, to revisit its legislative and institutional framework with a view to reinforcing financial supervision, enhancing transparency and strengthening the regimes to fight tax evasion, terrorist financing, money laundering, corruption and other financial crimes."