Bruce Rockowitz named in offshore property deal probe

Investigation names Li & Fung chief Bruce Rockowitz among owners of British property who used a BVI firm to exploit tax loophole

PUBLISHED : Wednesday, 28 November, 2012, 12:00am
UPDATED : Wednesday, 28 November, 2012, 1:01pm

Hong Kong billionaire Bruce Rockowitz has been named by the Guardian as part of a major investigation into the use of offshore companies to obscure the real identities behind secretive British property deals.

Rockowitz - president and chief executive of garment wholesalers Li & Fung, husband of pop star Coco Lee and one of Hong Kong's most successful expatriate businessmen - bought a luxury London flat and transferred it to an associate using an opaque offshore technique.

He was among the previously secret owners identified by the Guardian yesterday in a sample of almost 60 British homes and offices.

They typify the 100,000 such purchasers who have set up offshore companies, largely registered in the British Virgin Islands (BVI), since 1999. The owners of BVI entities use them to hide their dealings in British property and to take advantage of tax loopholes.

The new disclosures about property ownership follow a pledge by Vince Cable, the British business secretary, that his department would look at evidence of sham directors putting their names to thousands of anonymous offshore companies.

"We are not complacent or naive. We recognise there are individuals who will seek to abuse or evade," he said on Monday. "We will investigate fully any specific allegations and ensure appropriate action is taken."

Cable was responding to a worldwide investigation into offshore abuses by the Guardian, the BBC's Panorama programme and the US-based International Consortium of Investigative Journalists.

The practice of using offshore companies to buy property or to exploit tax loopholes is not illegal. Capital gains tax, inheritance tax or stamp duty on property purchases can often be avoided by offshore owners. The tax breaks open to offshore buyers have attracted a flood of foreign property money into Britain, particularly into central London, forcing up house prices by almost 50 per cent since 2009.

But until now, the full scale of this influx has been hidden by the anonymity conferred on the owners of BVI companies. Britain's land registry controversially allows offshore property owners to keep their identities secret, despite its status as a public record.

Owners identified yesterday include Rockowitz, the former tennis professional who carved out a business career alongside fellow Canadian Allan Zeman. Colby International, the sourcing firm they founded in 1981, was sold in 2000 to Li & Fung, where Rockowitz works.

Rockowitz bought a luxury flat in Knightsbridge, then transferred it to an associate. The flat was held in the name of a BVI entity, Billion Choice Investments Ltd. The BVI company was in turn placed in the ownership of an offshore trust, the London Trust, set up in the far-flung Cook Islands, in the Pacific, with Rockowitz himself named as the trust's beneficiary. The beneficiary was then switched, the flat sold for £790,000 (HK$9.8 million), and the cash placed in an associate's bank account.

Rockowitz did not respond to invitations by the Guardian to comment and declined to comment when contacted by the South China Morning Post.

Since 1999, 94,670 offshore entities have been set up in the BVI purely to hold British property. Purchasers pay £ 800 to £ 1,000 in fees to offshoring agencies for the privilege of not having their names made public.