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It is an odd state of affairs that it is easier to find out the ownership of land in 1915 than it is in 2018. The Finance Act of 1910 (Lloyd George’s famous People’s Budget”) proposed an increment levy on the increase in value of land. To establish a base-line of values, surveyors mapped out in intricate detail, the ownership, occupation, value and use of virtually all of Great Britain and Ireland, covering 99.7% of the land area of Scotland.

The map above shows the results for the west of Edinburgh around Charlotte Square.

In 2018, with modern technology such as digital mapping, satellite imagery, online technology and smartphones, we have yet to come close to what the Edwardians achieved with paper maps and ink.

Across the world, modern technology and integrated data management has delivered land informations systems that provide comprehensive data on land to citizens. From Scotland, for example, you can find out a wide range of information about land parcels anywhere in the US State of Montana. If you want the same data for Scotland, you will be frustrated at every turn, expend an inordinate amount of time and have to pay for it.

The question of Who Owns Scotland has been perennial one for decades. John McEwen had a go at answering it in 1979 and it was the focus of my first book published in 1996. In the early years of devolution, I tried to persuade the then Scottish Executive to open up land information to the public but there was little appetite. Since then, I made representations to Fergus Ewing and Parliament during the course of the Land Registration (Scotland) Act 2012 to persuade them to increase transparency and access to land information.

In a meeting with Fergus Ewing and the Keeper of the Registers of Scotland in December 2011, I made the case for this but the Minister could barely disguise his contempt for my suggestions and later, in the course of the passage of the Bill flatly rejected the idea that the public should have free access to land information (See col982 8 Feb 2012 Official Report).

He also rejected proposals to reveal the beneficial owners of companies that own land although the Government were eventually persuaded to do so in the Land Reform (Scotland) Act 2016, the provisions of which are yet to come into force.

But this blog is not about beneficial ownership. It is about access to information that already exists but is difficult and costly to access. The recent history of attempts to open up access is dismal as the following examples make clear.

PASTMAP

Over the decades I have spent researching landownership, I have developed a range of methods and sources. Although the Register of Sasines and Land Register are the definitive sources, they can be impossible to use in certain circumstances, For example, if you want to know who owns a field at a junction of a country road in Fife, you won’t be able to do so from official sources since you need an address or a name of a person and even the map-based Land Register will often be unhelpful in such circumstances.

Key to success in such cases is to find out some information from other sources to enable interrogation of the Registers. One such source is a very helpful online map called Pastmap [http://pastmap.org.uk] which provides information on various elements of the historic environment. If there is a Scheduled Monument located on or near land whose ownership you wish to establish, then a link is provided to the legal documents that are registered in the Register of Sasines. These provide details of the ownership of the land at the time of scheduling.

In 2012, however, I noticed that Historic Scotland had redacted the ownership information. See the example (second page) of the Bonawe Iron Furnace Schedule before redaction and after redaction.

I wrote to Historic Scotland and asked them why the schedules were now being redacted. They replied that,

Since the publication of the online schedule we have begun to redact the names and the addresses of legal owners from the scheduling documents given the perceived additional risks and sensitivities associated with publication of this information in such a readily and widely accessible format online.”

We are also considering removing legal ownership details from our scheduling certificates completely as part of an overall review of our scheduling documentation.”

These documents are recorded and made available to the public in the Register of Sasines (and made available for public inspection in the National Records of Scotland) with no redactions, so why conceal this information on Pastmap? What exactly are the “sensitivities” over this information? And why is Historic Scotland considering removing these details completely in future? Above all, if the Scottish Government is committed (as it claims it is) to transparency, why is it seeking to conceal this information from the one freely available source to the public?

Such questions remain unanswered.

SCOTLIS

Following a report in July 2015, John Swinney announced in October 2015 the establishment of SCOTLIS (Scottish Land Information Service), an online portal that would enable “citizens, communities, professionals and business to access comprehensive information about any piece of land or property in Scotland” The service was developed by Registers of Scotland and launched in November 2017. Here it is.

It is useless.

There is no map-search facility, there is no comprehensive information (solely landownership) and, as always, any information you do find, you will have to pay for. Contrast it with the online Montana service above. If you are a business, you can sign up as a business user and get access to an enhanced service. But by no stretch of the imagination is this a system allowing easy access to comprehensive information by the citizen. No wonder John Swinney’s successor issued no media release on the day of its launch.

OVERSEAS OWNERSHIP

On 1 March 2018, the Registers of Scotland published an Overseas Company Report and a Statistical Report on the overseas ownership of land in Scotland. Against growing demands for greater transparency in who owns land and property across the world, this is presumably Scotland’s contribution.

The report reveals the companies registered overseas that own land in Scotland. But this is the tip of the iceberg because it only takes account of land in the modern land register and not the older Sasines register. It doesn’t include any information on how much land is owned overseas (my own research shows that 750,000 acres of Scotland is owned in tax havens posing problems for law enforcement and tax authorities).

The Sunday Post published details of the findings on 11 March 2018.

And yet, the public are denied access to this data underlying the Overseas Company report because to obtain the report (see Information Sheet) will cost you an astonishing £1560 (the Statistical report is free to download). Even if you could afford this sum of money, if you wished further details of each of the records, you will need to buy this from Registers of Scotland. It will cost you £30 each and if you wish details of all 1700 companies, that comes to a cool £51,000.

Registers of Scotland claim that the data is being charged out on a cost-recovery basis (i.e. RoS only plans to recoup its costs from sale proceeds). But this merely emphasises why all of this data should be freely available. Were it to have been so over the past decade or so, all sorts of people would have been able to compile all sorts of reports and analysis within their own resources at no cost to the public purse and to the wider public good.

OPEN UP THE REGISTERS

The public deserve access to information about who owns Scotland. It’s time to end the secrecy and the costs and open up all information (environmental, planning, valuation, tenure, ownership) in an accessible manner which is free and easy to use by the citizen.

Over the coming months, I invite those with an interest to join me in campaigning for greater transparency and openness in land information. Contact me at andy.wightman.msp@parliament.scot

Back in March 2016, I published the preliminary results of research in to the offshore interests of the Buccleuch family. Due to my election as an MSP in May 2016, I have had no time to complete this work but thanks to the International Consortium of Investigative Journalists publication of the Paradise Papers, we now have one more piece of the jigsaw. The jigsaw being who is the beneficial owner of the shares of Bucleuch estates Ltd.)

Kirkhope Holdings Ltd. (larger version of the above image here) appears to be one strong candidate for the entity that holds the wealth of the Buccleuch family. It was incorporated in the Cayman Islands on 10 July 1987 and shares are owned by Buccleuch Estates Ltd. and members of the Buccleuch family.

Over to whoever wishes to follow this up further.

 

Newspapers including the Daily Telegraph reports excitedly that the Tulchan Estate in Morayshire is on the market for offers £25 million. A closer look at the facts, however, indicates that this is not so. The Press Release published by Savills makes clear that it is the company that owns Tulchan Estate – Tulchan Sporting Estates Ltd. – that is being sold.

So who owns Tulchan Sporting Estates Ltd. (TESL)?

Savills claims that the principal shareholders are “Gillian and Leon Litchfield”. But a closer look at the facts indicates that this too is not so. They are both Directors of the Company and did, prior to 17 November 2014, own shares in the company but they no longer do so.

The current sole shareholder is Archimedes Private Office (Suisse) Sàrl (as Security Agent), a company incorporated in Switzerland at Route Des Acacias 24, 1227 Les Acacias, Geneva. This company has, in addition, a number of securities over the Tulchan Estate.

The sale of the company by its sole shareholder Archimedes Private Office (Suisse) Sàrl has three notable consequences.

First, since the sale is of a shares in TESL owned by a Swiss company, there will probably be no liability to Capital Gains Tax. The latest accounts of TESL show the assets of the company to be worth £11,462,686. The shareholding is being sold for over £25 million.

Second, since the sale is of the share in the company and not of the property, there will be no liability Land and Buildings Transaction Tax (on a sale of £25 million, that would equate to £1,115,250 lost to Revenue Scotland).

Third, there are four tenant farmers who have a registered interest to buy their farms under the Agricultural Holdings (Scotland) Act 2003. This right to buy is triggered when the owner of the farms decides to sell the farms. But the farms are not being sold and will continue to be owned by TESL. This means of avoiding the right to buy provisions was highlighted by tenant farmers back in 2007 and, more recently, the Agricultural Holdings Legislation Review Group recommended that further consideration should be given to enabling tenant farmers to exercise their right to buy when shareholdings rather than the land is traded (see Section 8.3 and Recommendation 19 here). As far as I am aware, no such consideration has been given to this recommendation.

UPDATE 24 August 0015

The Scottish Tenant Farmers Association has called for a halt to the sale. See Media Release

PSReaders should note that the author of this blog was elected to the Scottish Parliament in May 2016 and, as evidenced by the fact that this is the first blog since April 2016, anticipates a lower level of blogging activity in future.

UPDATE 29 March 2018

Confirmation in 6 March 2018 Confirmation Statement that Tulchan Sporting Estates is now wholly owned by SF Scottish Properties Ltd., registered in St Peter Port, Guernsey. Further background in Parkwatch blog from 3 April 2017.

Following my previous blog on the offshore interests of the Scott/Buccleuch family, the Panama Papers have emerged. I look forward to interrogating the 2.6 terabytes of data once it is made available for public examination in early May.

Meanwhile, I thought I should publish information sent to me by the Chief Executive of Buccleuch Group on 16 March in response to my blog and coverage of the story by Commonspace and The National.

“In view of media reports and comment on regarding Pentland Ltd., a wholly-owned subsidiary of Buccleuch Estates Ltd., and the Stage 3 debate on the Land Reform (Scotland) Bill tomorrow, Buccleuch wishes to clarify the position of this company.

1. Pentland Ltd is a UK trading company which is subject to UK taxation. All tax that has been due from Pentland Ltd has been paid in the UK throughout the existence of the company.

2. All directors of Pentland Ltd are UK residents and UK taxpayers and are members of the Buccleuch family.

3. The ‘beneficial’ owners of Pentland have never been concealed and any land holdings owned by the company have been clearly identifiable as ‘Buccleuch’ land holdings.

4. Pentland was originally registered in the Cayman Islands in the 1970s, not for taxation purposes but to accommodate a range of international assets and investments.

5. Since the late 1990s, the assets of Pentland Ltd have been wound down and the company has traded exclusively in the UK. It is not permissible to re-register the company which currently owns a small property development in Canonbie, Dumfries and Galloway.”

This is a very interesting statement and reveals the sophistry at the heart of discussions about the use of secrecy jurisdictions.

Take the first sentence, for example.

Pentland Ltd. is a company registered at HSBC International Trustee Ltd., PO Box 484GT, Grand Cayman, Cayman Islands.

That is a fact.

This cannot be spun as “Pentland Ltd is a UK trading company”

Two other observations are worth making.

The statement suggests that Pentland Ltd. has had an association with the Buccleuch family since the 1970s and point 4 explicitly claims that Pentland Ltd. was originally registered in the Cayman Islands in the 1970s. In fact, Pentland Ltd. was not incorporated until 1990 as evidenced by its incorporation certificate here. So what was going on between the 1970s and 1990?

There is also some confusion about the relationship between Peatland Ltd. and Buccleuch. In this media statement from 2009, it is stated that “Pentland Ltd is a company under the ownership of the Buccleuch Group” when in fact it did not become a wholly owned subsidiary until 2013. Indeed in 2002, Anderson Strathern had written to the Keeper of the Registers of Scotland in plain terms that “Pentland Ltd is registered in the Cayman Islands and is not part of the Buccleuch Group.” From the statement above, it would appear tat it has always been part of the Buccleuch Group.

Finally..

We know nothing more about Hayes One Ltd., Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands.

And we still do not know who is the beneficial owner of of Buccleuch Estates Ltd.and how this is structured.

by Andy Wightman and Carole Ross

Buccleuch Estates Ltd.

Mr Richard Scott (sometimes referred to as the Duke of Buccleuch) is frequently cited as the owner of the largest extent of private land in the United Kingdom. Yet, this has never been entirely accurate. The 242,000 acres of land in Scotland is owned not by Mr Scott, but mainly by a company called Buccleuch Estates Ltd.

The shares in Buccleuch Estates Ltd. are not owned by Mr Scott and his family but by two companies – Anderson Strathern Nominees Ltd and MDS Estates Ltd.

Anderson Strathern Nominees Ltd. is a dormant company which is wholly owned by Anderson Strathern Asset Management Ltd. Anderson Strathern Asset Management Ltd. is wholly owned by Anderson Strathern LLP which, in turn is owned by the 53 partners in the law firm.

MS Estates Ltd. is wholly owned by Anderson Strathern Nominees Ltd. though the Directors include Mr Scott and other family members

Anderson Strathern Nominees Ltd. is ….. (but you know this).

So the ultimate owner of Buccluech Estates Ltd are 53 solicitors?

Well, not quite. Because what the Nominees do is to act on behalf of persons unknown on their behalf. These persons are likely to be members of the Scott family but we can’t know because the arrangements are not made public.

The first inkling I ever got that there was something odd about Buccleuch’s arrangements was 20 years ago in 1995. I was helping Philip Beresford compile the Sunday Times Rich List and he faxed me a copy of a letter he had received from Richard Scott’s father.

Dear Sir,

Much as I would like to be No. 33 in your chart of the richest 500, I fear I am there under false pretences.

As you rightly mention the calculation is based upon a hypothetical valuation of works of art. What you may not realise is that if I were to sell items in the collection, 80% of the proceeds would go straight to the Treasury. This is because 80% was the rate applicable to my father’s estate when he died in 1973. 

My worth on that score should therefore be reduced from £200m to £40m and as I own no shares in Buccleuch Estates Ltd., I might find myself level-pegging with Gordon Baxter and Sean Connery. 

Can you please take this into account next time? 

In recent years the top rate of inheritance tax was reduced to 40% but even this would affect the positioning of many others whose worth is based upon art collections. 

Yours faithfully 

Buccleuch

Two things stood out in this letter which would later become of interest. Buccleuch’s art works were the subject of a heritage tax exemption (meaning that the public could have access at certain times in exchange for a deferral of inheritance tax) and that Buccleuch, despite being regarded as the owner of Buccleuch Estates, admits that he owned no shares in the company.

A few years later and at his request, I had a private meeting with a senior adviser to Buccleuch. In exchange for some intelligence he wanted on the likely impact of land reform, I requested information on who really owns Buccleuch Estates. I was told that it was controlled “by the family”, that there were “firewalls” between different parts of the business and that there were “offshore interests”.

Madonna of the Yarnwinder

Some years passed and my file on the topic lay dormant until in 2003 when the Leonardo da Vinci painting, the Madonna of the Yarnwinder was stolen from Drumlanrig Castle. Given the 80% inheritance liability that was due, I wondered what would happen in the event that the painting was never recovered. In 2007, the painting was recovered and is now on loan to the National Galleries of Scotland.

One thing that did happen was that the ownership of the painting changed hands shortly after the theft and was transferred to a charity, The Buccleuch Heritage Trust by a Deed of Gift on 16 April 2004.

The Buccleuch Heritage Trust transferred a total of £12 million of assets to a new charity, The Buccleuch Living Heritage Trust in 2011. The charity’s membership and Board is appointed exclusively by Mr Scott. The assets included Dalkeith House (which was not included in the valuation of £12 million) and title to the Madonna of the Yarnwinder.

The accounts of the Buccleuch Heritage Trust are no longer in the public domain. I asked Anderson Strathern for copies of the 2004 accounts but they demanded a fee of £100 which I could not afford and which I refused to pay. In the 2011 accounts of The Buccleuch Living Heritage Trust (2Mb pdf), there is a loan noted in the accounts for £749,692 that had been assigned from the Buccleuch Heritage Trust to finance the purchase of the Leonardo da Vinci painting (page 17). To understand this loan, we need to go back to the original theft of the painting.

In August 2003 the stolen painting was insured by John Scott for a figure of slightly less than £4 million. This seems to have been because, as outlined in Buccleuch’s letter in 1995, there was an 80% tax liability on the painting and that part of the value was never insured. Following the robbery, the insurers settled an insurance claim by Mr Scott of approximately £3.8 million. That settlement gave the insurers a right of ownership in the stolen painting. Around the same time the insurance policy in respect of the stolen painting was varied to enable the Buccleuch family to buy back the insurers’ right of ownership in the stolen painting, in the event that it was ever recovered.

My understanding is that the £749,692 that was loaned to the Trust in around 2004 was to enable this buy back agreement. The loan was fully paid off in 2012.

Pentland Ltd.

The loan to the trust was from a company called Pentland Ltd and the 2011 accounts note that Richard Scott, who is a Trustee of the charity, is also a Director of Pentland Ltd.

And so to the substance of this blog. Who is Pentland Ltd.?

There is only one company called Pentland Ltd. registered in the UK and it is a wholly-owned subsidiary of Galliford Try, a UK construction company that has nothing to do with the Scott family.

The Pentland Ltd. that loaned £749,692 to acquire the da Vinci painting is a company registered in Grand Cayman, part of the Cayman Islands, a British Overseas Territory and notorious secrecy jurisdiction. Its registered office is ar HSBC International Trustee Ltd., PO Box 484GT, Grand Cayman, Cayman Islands.

Until recently, Pentland Ltd. had no direct links to the Buccleuch Group (the very complex network of companies controlled by Buccleuch Estates Ltd.). Instead it was part of a quite separate (and just as complex) network of companies controlled by the Scott family. Pentland was incorporated in Grand Cayman in 1990. By 2009, it had become a subsidiary of Dabton Investments Ltd. and in 2013, Dabton was acquired by Tarras Park Properties Ltd., a subsidiary of Buccleuch Estates Ltd.

Pentland Ltd. (Grand Cayman), Salters Land Ltd (British Virgin Islands) and Drumcork Ltd. (British Virgin Islands) are now all subsidiary undertakings, joint ventures and associates of Tarras Park Properties Ltd. which is wholly owned by Buccleuch Estates Ltd.

An investigation into the myriad companies associated with Pentland prior to 2013 reveals a series of loans from Pentland Ltd. to other companies in the Buccleuch Group. Some of these loans were repaid in full or in part and others were written off in full or part. Some details are provided in this  dossier.

Lending money to UK companies from companies registered in secrecy jurisdictions is one method of bringing offshore money onshore. Writing off such loans means that the money is never repaid.

Being 100% owned by the Buccleuch Group, loans and other related party transactions are now exempt from disclosure under Financial Reporting Standard 8 on Related Party Disclosures. It is thus no longer possible to identify the loans being made by Pentland Ltd. to other companies in the Buccleuch Group.

Given that Buccleuch Estate Ltd. is itself ultimately owned by a nominee company of solicitors, is Pentland Ltd. one of the offshore family trusts I was told about in the late 1990s?

Dalkeith Estate

Dalkeith Country Park is popularly assumed to be owned by Buccleuch Estates Ltd. But as we have already seen Dalkeith House and surrounding grounds are owned by The Buccleuch Living Heritage Trust.

The ownership of the majority of the rest of the Country Park and neighbouring land was revealed in correspondence entered into between Buccleuch Group, Anderson Strathern and the Registers of Scotland in relation to the registration of an agricultural tenant’s interest to buy their farm under Part 2 of the Agricultural Holdings (Scotland) Act 2003.

The eastern part of the Country Park is occupied by a tenant of the Home Farm and a further agricultural tenancy exists over Smeaton Farm on the Park’s eastern border, just outside the park

Half of Smeaton Farm was owned in the past by Pentland Ltd. but by 2012, it had transferred its ownership to a company called Hayes One Ltd., Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands.

In correspondence relating to the Home Farm and Smeaton Farm in 2007, Registers of Scotland asked Buccleuch whether Pentland Ltd and Buccleuch Estates Ltd. “were connected  in any way for example with the same beneficial share ownership and whether the tenant did receive notification of the change of ownership and when this took place.”

In reply, Anderson Strathern wrote to RoS to state that ownership of the Home Farm had transferred from Pentland Ltd to Buccleuch Estates Ltd. on 26 November 2002 and this information had not been intimated to the tenant. The letter said nothing about beneficial ownership, merely that “Pentland Ltd is registered in the Cayman Islands and is not part of the Buccleuch Group.”

A search in the Register of Sasines and Land Register for “Pentland Ltd.” in Midlothian returned no results.

In an article in the Sunday Times on 21 July 2013, John Glen, Chief Executive of Buccleuch Estates Ltd. said,

It’s my job to run the Buccleuch companies and I can assure anyone that Buccleuch businesses pay tax where they fall due. All trusts linked with Buccleuch are subject to UK tax and all other family-related trusts are resident in the UK and subject to UK tax.”

It is not clear whether this statement covers the activities of Pentland Ltd., Salters Land Ltd., Drumcork Ltd. and One Hayes Ltd.

In a statement issued yesterday, a spokesman for Buccleuch said:

Pentland Limited is a Cayman Islands incorporated vehicle which is wholly owned by The Buccleuch Estates Limited which is UK registered. The company has always been wholly owned by Buccleuch and members of the Buccleuch family, all of whom are UK resident taxpayers.

“All profits arising in Pentland Limited are subject to UK corporation tax. Pentland Limited has historically owned land in the UK and currently owns an area of land near Canonbie in Dumfries and Galloway.”

In the Land Reform (Scotland) Bill debate on Wednesday this week, Patrick Harvie MSP has tabled two amendments that would bar all legal entities registered in British Overseas Territories or Crown Dependencies from registering title to land in Scotland (Amendments 105 & 106 pages 11 & 12).

This is merely the latest in a long series of attempts in Parliament to crack down on offshore ownership. At First Minister’s Questions on 9 October 2003, Jack McConnell responded to a question from Stewart Stevenson MSP on the topic and concluded that “I am sure that the matter will be discussed in Parliament over a long period.

In 2012, in response to further attempts to amend the Land Registration (Scotland) Bill in 2012, Fergus Ewing MSP, responded to concerns raised by the Economy, Energy and Tourism Committee, by saying that nothing could or would be done. In a meeting with the Minister at the time, I specifically raised the question of the use of secrecy jurisdictions by landowners like Buccleuch. Barely able to disguise his contempt for me, he said that he had visited Buccleuch and that the company had created lots of jobs. On Wednesday, Parliament will once again debate the matter after months of pressure from campaigners for greater openness.

Meanwhile, despite what we have discovered here, we are no closer to being able to determine for sure the real owner of Buccleuch Estates Ltd.

See the story with further comment in The National by Commonspace journalist, Michael Gray and a summary of this blog here.

UPDATE 19 APRIL 2020

This blog, together with a previous one published on 29 September 2015 were the subject of defamation proceedings brought by Wildcat Haven Enterprises CIC against myself in a citation from the Court of Session served on me on 21 March 2017. Since 30 March 2017, following legal advice, the blogs have been password protected. The case (Wildcat Haven Enterprises CIC vs. Andy Wightman A111/17) was heard by Lord Clark at the Court of Session from 29 October 2019 – 8 November 2019. A Decision by Lord Clark was published on 11 March 2020 which rejected all of the pleas of the pursuer in what was a comprehensive victory for me. As a matter of law therefore neither of these two blogs are defamatory. The Pursuer issued a statement to the media on 11 March stating that “we will certainly appeal the decision”. However, the 28 day period in which to appeal has now expired and no appeal has been lodged. I am pleased therefore to now remove the password protection and enable them to be read as they were published subject to one caveat.

Lord Clark concluded that in the blogs (and a few tweets which were also complained of) I had made four untrue statements. Contrary to claims by my detractors, none of these was a lie. Indeed Lord Clark made clear that I was a “credible and reliable witness” who “gave his evidence in an honest, straightforward and coherent manner”. Lord Clark stated that “I accept his evidence about what he knew and did not know at the time of the various publications” and that “the suggestion he made statements that he knew were untrue simply has no proper basis.” [Lord Clark at 73]. I have thus edited the two blogs with a footnote marked in (red) to indicate the relevant untruths and why they arose.

Finally, what was revealed of this case in Lord Clark’s decision was a fraction of what was revealed in Court. What was revealed in Court was a fraction of the evidence assembled in the 1494 Productions (written documents lodged as evidence) lodged in the Court (59 by the Pursuer and 1435 by Defender). And what was revealed in the Productions was a fraction of what I have learned in the course of extensive preparatory research over the past 3 years about the activities of Highland Titles and Wildcat Haven Enterprises CIC. I will be publishing a detailed blog revealing what really went on over the past three years. Given the litigous nature of both parties, I will, of course, have these blogs legalled before publication.

UPDATE ENDS

I intended to have published this blog on Highland Titles Day (10 February – see Malcolm Combe’s blog) ) Apologies to those who were expecting it then.

Last September, I blogged about the latest effort by Highland Titles Ltd. to raise lots of money from people who think they get to own some land in Scotland and help conservation at the same time (see a recent advert in BBC Wildlife magazine – 1.6Mb pdf – for a flavour of their business model).

Highland Titles Ltd. is a company registered in Alderney. It is owned by Highland Titles Charitable Trust which is registered in Guernsey. See my blog of 12 Feb 2015 for further background. The company makes its money from purporting to sell small plots of land as “souvenir plots”. The controversy over the affairs of this company has been generated because no-one who buying such plots can in law become the owner of the land and because the financial affairs of the company remain opaque, being registered in a secrecy jurisdiction.

In its latest efforts to garner greater respectability, Highland Titles has become involved with a conservation project called Wildcat Haven CIC. The fundraising arm of this organisation is a Community Interest Company called Wildcat Haven Enterprises CIC with its registered office at Sage & Co Chartered Accountants in Denbighshire, North Wales. There are two Directors of the company, Emily O’Donoghue and Douglas Wilson. Mr Wilson is resident in Alderney and is also a a Director of Highland Titles Ltd (1) and a Trustee of Highland Titles Charitable Trust for Scotland.(2)

One of the requirements of a Community Interest Company is the provision of an asset lock that restricts the disposal of assets of the CIC. Assets can be transferred to another CIC or charity and such a body must be designated in the Articles of the CIC. In the case of Wildcat Haven Enterprises CIC, the designated body to become the potential recipient of the assets is Highland Titles Charitable Trust for Scotland.

In response to my September blog, Emily O’Donoghue (who is a Director of both Wildcat Haven CIC and Wildcat Haven Enterprises CIC) responded and I published the response as an update to the blog. In turn, I then posed a number of questions to Emily as follows.

  1. It may be a bit of fun but you are asking folk to help you by “actually buying part of the land we plan to conserve” You need to be much clearer that people who spend £100 do not become owners of the land.
  2. You say that part of the Loch Loyne site has been gifted to you. Can you tell me when this transaction took place and when it was submitted to the Registers of Scotland for recording? Can you advise the extent and location of this land?
  3. Are there any wildcats on the Loch Loyne land?
  4. Why is my IP address blocked from viewing your website?
  5. What is the role of Highland Titles in your fundraising? Do they receive any payment? Do they receive any commission on each plot sold?

I never received a reply but can provide an update on some of the questions.

  1. The Wildcat Haven website still contains the claim that “We are asking you to help us by actually buying part of the land we plan to conserve.”
  2. Following Emily’s claim that part of the land had been gifted “to us”, I checked the title and discovered that Highland Titles Ltd. remained the owner and had gifted no land to Wildcat Haven. Interestingly, on 9 December 2015, however, Highland Titles Ltd. made an application to the Registers of Scotland to transfer part of Paitna Wood/BumbleBee Haven/Wildcat Haven to Wildcat Haven Enterprises CIC.
  3. No response.
  4. No response.
  5. No response.

It remains unclear what financial arrangements have been entered into and why Douglas Wilson is a Director and why Highland Titles Charitable Trust for Scotland is the designated beneficiary of the assets of Wildcat Haven Enterprises CIC.

As I pointed out in my September blog, if all of the 75 hectares of Paitna Wood/BumbleBee Haven/Wildcat Haven/Wildernesse Wood were sold even as 10 square foot plots, this would generate £40.35 million in sales revenue paid to a company in Alderney in the Channel Islands. In normal circumstances, a conservation project would be established as a charity and a trading body or fundraising enterprise would be established as a whole owned subsidiary of the charity. There’s a lot of money at stake.

Most recently, Wildcat Haven has been seeking to become involved in the community acquisition of a Forestry Commission forest by Loch Arkaig.

Finally, a very significant development took place in early June 2015.

Highland Title’s bankers and corporate service providers in Guernsey gave notice of the termination of their services.

Wildcat Haven Enterprises CIC was incorporated in 30 June 2015.

UPDATE FOOTNOTE 19 APRIL 2020

(1) Douglas Wilson in fact was not a Director of WHE at the time of publication of this Blog. He was a Director of Wildcat Enterprises CIC from 6 June 2015 to 21 August 2015 (when he resigned) and again from 21 October 2015 until 17 February 2016 when he again resigned. Guernesy does not have a very transparent, publicly accessible registry of companies being one of the most secretive jurisdictions in the world. Thius, in order to obtain information about when a Director was appointed or resigned, one has to contact the Registry with a specific request. As with my research for Blog 1 in September 2015, I phoned the Registry to find out if Douglas Wilson was still a Director of WHE and was informed that he was. Critically, as noted in the first sentence of this Blog, I had intended to publish it on Highland Titles Day, 10 February and had by then completed all of my research including this call to the Registry. For reasons I cannot recall (although I was very busy with the forthcoming Holyrood election and my partner was abroad in India) I did not publish the Blog until 24 February 2020 by which time Douglas WIlson had resigned as a Director of Highland Titles Ltd. It was thus an oversight on my part not to have checked the whole Blog for any factual matters that might have changed between 10 February 2016 and the date of publication.

(2) Douglas Wilson was in fact not a Director of Highland Titles Charitable Trust for Scotland at the time of the publication of this Blog. Unlike the Guernsey Registry of Companies (see footnote (1) above), the Registry of Charities is publicly available online. I checked the entry for HTCTS during research for the Blog and noted that Douglas Wilson was recorded as a Director of HTCTS. I therefore relied upon this official source in good faith in writing the Blog. In fact, Douglas WIlson had resigned as a Director of HTCTS on 6 July 2015. This was not reported in the Guernsey Registry of charities until an update was published on 20 June 2016.

This Wednesday the Rural Affairs, Climate Change and Environment Committee (RACCE) holds it first meeting to consider amendments to the Land Reform (Scotland) Bill at Stage 2. Once the Committee has completed Stage, its amended Bill will go forward to Stage 3 to be debated and further amended by a sitting of the whole Parliament.

This blog is a brief update on where we are with the one provision that has been the subject of much debate and where the RACCE themselves want the bill strengthened – namely the Part 3 provisions on transparency over who controls corporate entities that own land.

BRIEF HISTORY

Proposals to make it incompetent for non-EU companies to own land and to make declarations of beneficial ownership of companies mandatory in the Land Register were tabled during the passage of the Land Registration (Scotland) Act 2012 but were rejected by the Scottish Government.

– The Land Reform Review Group recommended that such a measure be adopted to improve transparency in the ownership of land.

– The Land Reform Bill consultation in December 2014 sought views on the proposal and it was widely endorsed by consultees.

– The Land Reform Bill was published in June 2015 but did not contain provision for such a bar. Instead, it contained a mechanism whereby questions could be asked about the beneficial ownership of companies in tax havens and elsewhere but there is no obligation on such jurisdictions to co-operate.

– The RACCE Committee took evidence on the Bill and, in its Stage One report, recommended that the original proposal be introduced to the Bill.

– Scottish Ministers responded to the Stage One report by, once again, rejecting the non-EU proposal on the grounds (they argue) that it is outwith the competence of the Scottish Parliament.

– Scottish Ministers then last week announced that they would be tabling an amendment at Stage 3 [link to letter] that would create a public register of person who exert control of companies that one land. The amendment would merely be a regulation making power with the details of how such a register would operate being left to the next Parliament to draft and enact.

AMENDMENTS

We now have three distinct proposals for the way ahead with regard to transparency – two amendments to be considered this Wednesday (see full text here) and one amendment to be tabled at Stage 3.

Graeme Dey (SNP) Amendments 29, 30 and 36

The first is a series of amendments in the name of Graeme Dey MSP (numbers. 29, 30 and 36) to the Bill that would require the beneficial owner or “controlling interest” in any corporate entity (not just non-EU ones) to declare their identity in a new section of the Land Register (Amendments 29 and 36 merely remove existing Sections 35 and 36. Amendment 30 is the substantive amendment). This is not a bar to non-EU entities but is a disclosure provision to be incorporated in the Land Register. Verification of the identity of the beneficial owner will still be tricky but appropriate penalties can act as a deterrent. This amendment has ben developed following considerable effort by Megan McInnes of Global Witness and Peter Peacock of Community land Scotland.

Patrick Harvie MSP (Scottish Green Party) Amendments 105 and 106

Patrick Harvie has tabled an amendment (Nos. 105 & 106) that reinstate the bar to non-EU corporate entities and fulfils the original recommendations of the Land Reform Review Group,  the December 2014 consultation paper and the  RACCE Stage one Report. Whilst some EU disclosure requirements are not fully transparent, bringing corporate entities “onshore” exposes them to the ongoing work across the EU to improve transparency through a variety of processes such as the requirements of the Fourth Anti-Money Laundering Directive that requires member states to establish registers of beneficial ownership of companies.

The Scottish Government Amendment

The Scottish Ministers will table an amendment at Stage 3 to replace Sections 35 and 36 and introduce a new regulation making power for Ministers to establish a “Register of Controlling Interests in Land”. The details of this register, what it would contain, how it would operate and how compliance would be enforced would then be the subject of secondary legislation to be introduced in the next Parliament. It is thus hard to know what is involved with this proposal and there will be no time for any debate as it will be introduced at Stage 3. Critically, it is not clear whether Ministers are proposing yet another Register or whether they are open to the idea within Graeme Dey’s amendments to make such disclosure part of the Land Register and thus visible on the title to ownership of the land.

I hope that RACCE will support both Graeme Dey and Patrick Harvie’s amendments. They provide a “double lock” arrangement whereby tax havens are outlawed as jurisdictions within which land and property in Scotland can be owned AND those entities registered within the EU are obliged to publish details of the controlling interests on the face of Land Register titles.

If you wish to support these amendments, contact any member(s) of RACCE and tell them you support amendments 29, 30, 30, 105 and 106. Contact details are here.

The Inverness Courier today reported that the Qatari royal family has bought the 544 acre Eileen Aigas & Ruttle Wood estate in Inverness-shire. it was sold to a company called GoldenRod Ltd. registered in Jersey in September 2015 for £7 million.

Goldenrod Ltd. is owned by OH Securities Ltd. and R&H Investments Ltd. both registered in Jersey. Those companies are both owned by R&H Trust Co. (Jersey) Ltd. which itself is owned by OH Securities Ltd. and R&H Investments Ltd. plus a third – Woodbourne Nominees Ltd. which is also owned by the company (R&H Trust Co. (Jersey) Ltd.) which owns it.

This opaque ownership structure means that it is impossible to verify who the beneficial owner of the company is although the same opaque structure was used to acquire the Cluny Estate in Inverness-shire last year – see previous blog on topic.

Whether such secrecy is a satisfactory state of affairs is in sharp focus right now as the Land Reform (Scotland) Bill is scrutinised at Stage 2 in the Scottish Parliament and amendments will be tabled to either make such ownership structures illegal or to require that the beneficial ownership is revealed. Whether those amendments succeed or not will be down to MSPs to decide. See here and here for background.

In January, I blogged about the opaque ownership of Kildrummy Estate in Aberdeenshire. A gamekeeper, George Mutch, had been convicted of wildlife crime. Under Section 24 of the Wildlife and Natural Environment (Scotland) Act 2011, an employer or agent of George Mutch can be charged with vicarious liability.

I asked a simple question – against whom would such a charge be brought? The estate is owned by Kildrummy (Jersey) Ltd. and, having outlined the complex ownership structure of Kildrummy (Jersey) Ltd. (see below and January blog for a full explanation), I speculated that the Crown Office might have a job on its hands to determine who (if anyone) could be prosecuted.

This week, thanks to the diligent and dogged investigative work undertaken by Raptor Persecution Scotland (RPS), we are now closer to answering that question. In  September 2015, the Crown Office told RPS that,

“Despite further investigations including investigations which focused on establishing vicarious liability, no-one else has been reported to COPFS in relation to the events which took place in Kildrummy Estate in 2012 and accordingly, no further prosecution, including any prosecution for a vicarious liability offence, has taken place

RPS followed this up by asking Police Scotland why they had been unable to report anyone to the Crown Office who might be considered to be vicariously liable for the crime carried out by George Mutch. Police Scotland’s response was published by RPS yesterday. The key part of Police Scotland’s reply is as follows

“Significant international investigations were undertaken……..it was established that due to insufficient evidence the additional charge of Vicarious Liability could not be libelled“.

This suggests that it was impossible, within the resources available to investigators, to identify with sufficient certainty who is actually behind Kildrummy (Jersey) Ltd. The Police may well know who could be libelled for the offence but had insufficient evidence to connect that person with Kildrummy (Jersey) Ltd. for the simple reason that is is virtually impossible to ascertain the answer to that question. If the Police, with the full range of investigatory powers available to them (including powers to force the Jersey authorities to divulge what information they hold), cannot find that answer, it is hard to see how anyone else might be able to.

Beyond the implications for wildlife crime legislation (and the Police note that “The experience of this case has, however, identified opportunities for refining future Vicarious Liability investigations….”), this raises questions about Scottish Government policy in relation to the offshore ownership provisions in the Land Reform Bill.

In a blog – Scottish Land and Secrecy Jurisdictions -from last month, I refuted the Scottish Government’s arguments as to why they could and would not implement the recommendation by the Land Reform Review Group and the proposal in their own consultation paper to restrict the registration of land by legal persons (companies etc) to those registered within the EU. The provisions currently set out in Sections 35 and 36 of the Bill merely allow authorised persons to ask the Keeper of the Registers of Scotland to, in turn, ask further questions about the true ownership of companies in secrecy jurisdictions. It is a meaningless provision since authorities in Jersey, British Virgin Islands and Grand Cayman are under no obligation to provide any answers. If even the Police cannot find such answers, what hope has the Keeper?

Included in the Scottish Government’s reasoning was a bullet point 3 that

There is no clear evidence base to establish that the fact that land is owned by a company or legal entity that is registered or incorporated outside the EU has caused detriment to an individual or community.”

The Kildrummy case is prima facie evidence of precisely the circumstances in which opaque ownership in a secrecy jurisdiction has caused detriment – specifically to the ability of the Police to gather the necessary evidence to pursue a prosecution under an important statute passed by the Scottish Parliament.

Had Kildrummy Estate been owned by a company registered in the EU, the Directors of that company would be easily identified and could have been charged with vicarious liability.

The Rural Affairs, Environment and Climate Change Committee is currently preparing its Stage One report into the Land Reform Bill due to be published in early December. It might like to reflect on the Kildrummy case