Revealed: The worldwide network of sham directors

The existence of a global network of sham company directors, most of them British, was revealed yesterday by an investigation into an obscure practice that helps keep secret countless financial transactions.

The UK government claims such abuses were stamped out long ago, but a worldwide joint investigation by the London-based Guardian, the BBC's Panorama and the Washington-based International Consortium of Investigative Journalists (ICIJ) has uncovered a booming offshore industry that leaves the way open for both tax avoidance and the concealment of assets.

More than 21,500 companies have been identified using a group of 28 "nominee" directors. The nominees play a key role in keeping secret hundreds of thousands of commercial transactions. They do so by selling their names for use on official company documents, using addresses in obscure global locations.

This is not illegal under UK law, and sometimes nominee directors have a legitimate role. But evidence suggests this group of directors only pretend to control the firms they put their names to.

The companies themselves are often registered anonymously offshore in the British Virgin Islands (BVI), but also in Ireland, New Zealand, Belize and the UK itself. More than a score of UK agencies sell offshore companies, several of which also help supply sham directors.

One British couple, Sarah and Edward Petre-Mears, who migrated from Sark in the Channel Islands to the Caribbean island of Nevis, have sold their services to more than 2,000 entities, with their names appearing on activities ranging from Russian luxury property purchases to pornography and casino sites.