Irish Section 110 SPV, Vultures, Tax Haven, Orphaning Scam

Frank Daly, Chairman of NAMA, explaining to London Vultures. how to avoid all Irish Taxes at Section 110 Presentation.

As posted earlier, if NAMA took Irish taxes avoided into account by Vultures using Section 110 (all equity owned by Irish Charities), then it would sell all loans to BOI (or better still, AIB, which we own all of) for €1 (who pay full Irish taxes).

The normal Irish corporate taxes that AIB would pay over the next ten years would more than make up for the loss of the vultures cheque. In addition, AIB would earn the State the further upside from the return on this investment.

This is how dumb NAMA (and IBRC) has been in selling constantly to vultures with Section 110s (equity owned by Irish Charities)

Here is a presentation from Mason Hayes Curran (MHC) at the London Banking Seminar, on May 10, 2016.
London Banking Seminar Presentation Slides - Mason Hayes & Curran

Page 3 of the MHC presentation is the “Unregulated Section 110 Company” which is described as:

We know from our other MHC brochure post, that this is code for … tax-free.
See this link for the MHC post.

And who do we have on Page 4, but a speech from none other than … Frank Daly:
Chairman of NAMA.
Ex. Head of the Irish Revenue Commissioners (i.e. don’t tell us Frank, you don’t know what MHC mean).

PS if MHC take this down, I have it cached and will find out how to upload to SCRIBD.

POSTSCRIPT - and of course, as with many Irish scandals, we find that NAMA was not only lying about its knowledge of Section 110 SPVs, it was invested in them all along.

SUNDAY BUSINESS POST: Nama set to be caught in new tax avoidance net

Do AIB and BOI’s legacy losses not provide them with a Tax shelter for the next decade or so though?

it only gives them some (but not complete) relief on the 12.5% but not the bigger 20% withholding (i.e. AIB and BOI would have to deduct withholding tax paid on all dividends to investors). In addition, a lower effective rate of corporate tax means a higher withholding tax take, so again, more clawback for the State.

Also, the State will get credit for AIB’s large def tax asset if it ever gets floated (i.e. investors will price that AIB will not be paying corporate tax for a few more years.). So it can assume that marginal deals are done at the 12.5% rate if you follow.

(Now that Irish bonds yields are going to zero, it limits effects of time discounting).

Looking at the companies involved is a bit fucking irritating, for various reasons…

Take for instance one of the Vampire Squid’s SPVs Beltany Property Finance Limited (Thank you OB35)

The accounts are here to Dec 2014

Assets less current liabilities 521,365,419

Interest Income 43,965,924

Income before tax 1,000

Tax 250

So ok, usual shite.

The auditors are PwC and they are signed off as being in accordance with FRS 102. Signed off by Ronan Doyle no less

Image and text taken from here:

So the accounts should be right, right?

So, read them to see who the parent is, it is after all a required disclosure in FRS 102

That’s on page 233 of the FRS

So, I have a look at the notes. GS disclosed as the ultimate controlling party, but who is the parent? From Note 14 of the financials:

So who is this entity? Well here are the accounts to Dec 14.

It is merely a share trustee and has no beneficial interest in the GS vehicle (or the GS vehicle would be disclosed as a subsidiary entity). (For people with real lives FRS 102 is the biggest change to Irish GAAP since the 1986 Companies Act. You’d think they’d pay attention to the detail).

So, the financials are wrong, whether purposefully or not. And no one really gives a shit. Pwc get 50k for the audit and 5k for other services.

How to find the vultures Section 110 vehicles on a Company Search - their Company Secretarial Firms

Vultures don’t call their Irish Section 110 vehicles Goldman, Cerberus, Apollo, Oaktree, Carval, Lone Star etc (although smaller vulture Canyon Capital does use its own name, yikes). Instead they give them a range of unusual names, from the exotic (Cerberus uses “Promontoria” at the root in its names), to the universal (Oaktree uses derivations of Mars), to coded (Lone Star calls them LSREF iii and LSREF ii after their main fund), to romantic (CarVal uses names like Vanguard, Launceston and Stapleford), to even something homely (Goldman Sachs’ Beltany, Kenmare and Liffey Property).

Finding the Vulture’s Section 110s is like looking for a needle in a haystack. However, a quick way on a Company Search site is to search by their “Irish Director” names. Here you will find the same small pool of Dublin Company Secretarial Firms that act as the “Irish Directors” for most of these Section 110s, and do the company secretarial work.

Per past posts, Goldman’s partners cannot be the “Directors” of their Beltany Property Finance, or they risk compromising it’s “Irish Residence”. If the Directors of Beltany where Goldman partners, the US IRS would have a stronger claim that as all the decisions are being made by Goldman partners (which they are in effect), and Beltany is really a US Group Subsidiary, and tax Beltany in the US (rate starts at 35%).

I often wonder how long the “thin veil” of Dublin professional company secretaries (with +100 directorships), will work in this regard. If the US IRS really challenged Section 110s like Beltany Property Finance, I think they might find from the e-mail and paper trails, that the decisions were made by Goldman partners in the US (and nothing by its “Irish Directors”).

Structured Finance Management (SFM) are a specialist Dublin company secretarial firm. SFM provide the “Irish Directors” to Cerberus (all the Promontoria Section 110s), CarVal (the Launceston, Vanguard and Stapleford Section 110s), Goldman Sachs (Beltany, Kenmare and Liffey Property Finance Section 110s).

Karen McCrave (one of the Directors of SFM) appears as a Director of +150 other vehicles in Ireland. She describes herself and ex-banker (but was never involved in any distressed debt investing like the vultures do, she mostly worked in Bank of Ireland Private Banking on structured products). The “ex-banker” term helps with the “thin veil” that Karen is “taking the decisions” for her +150 Irish resident distressed debt SPVs in Ireland (they key). Other SFM “Directors” are: Jonathan Hanly, Fiona de Lacy Murphy and Rachel Martin (these 4 will route to most of the vulture fund Section 110 vehicles with SFM).

The B1 returns of their vultures list out all SFM “Directorships”, here is one stuck to back of Carval’s Vanguard Auto Finance.

The other big rivals in this space would be TMF International (who are the administrators for OakTree’s Mars Capital Section 110s Series). You will see TMF’s Directors like Ronan Reilly, Kevin Butler, Morgan Sheey and John Hackett appear as Directors for many of the vulture’s Section 110s with TMF.

There is a third specialist in-house administration firm - MFD Secretarial Limited. These are the in-house company secretarial firms of Maples and Calder (Maples Financing Services owns MFD Secretarial Limited). MFD appears for smaller vultures, Sankaty / Broadhaven / Bain Capital, and for Canyon Capital Partners.

Knowing the main Directors of the Administration Companies (i.e. Karen McCrave in SFM, Ronan Reilly in TMF) is a great way to “reverse search” for most of the Vultures Section 110s on (or other company search sites) in Ireland. It is really only Lone Star who use different dedicated “Irish Directors” for their entire IFSC business.

Lone Star LSREF III 2015 B1 Return listing John Hennessy, Jeffrey Johnston, Thomas Bather.

There have been times when these “shell” Directors hit the mainstream media, and are mistaken for being the local “enforcers” of the vulture funds. They are not. They are just providing a secretarial services to help the vulture’s Section 110 cement its “Irish Residency” test, and help the vulture to avoid any “legal” contact with owning their Section 110, which is critical to protecting themselves from any challenges by the US IRS.

Ironically, as I have posted above, as with Apple, if the US IRS began to challenge these Vulture Section 110 zero-tax structures (and as you can see with these “Irish Directors” and ownership by “Irish Charities”, they might not survive such a challenge), we would probably find that that, as with Apple, the vultures would suddenly develop a strong desire to pay fuller Irish taxes, to protect themselves for the US 35% rate.

IRISH TIMES: March 26th 2016, SFM: the vulture funds’ enforcer that calls in Irish property debts

IRISH TIMES: March 26th 2016, Special companies used by vulture funds to hold Irish loans

SMF Europe Web-Site

TMF Group Web-Site

Strange - works now.

Nope, gone again.

I feel paranoid enough as it is :smiley:

Thanks for the detailed research folks. I have been lurking for a good while now but felt the need to log on to voice my support. Hopefully this builds up a head of steam and we get results.

I get the general gist of the machinations, but a few things are still a little blurry for me, so maybe you could provide a little context for the lay people among us.

  1. Is there any suggestion anywhere that any of the “traditional” charities are involved in this or is it just the “in-house” ones owned by the law firms? I have to say that even writing about a charity being owned by a firm is enough to make me puke, let alone the rest of the goings on.

  2. Given that these “charities” are in place so that the line to the US authorities is that “we don’t own this, the charity does and we don’t control the charity” is there any scope for some unscrupulous* individual on the charity side to walk away with a lot of money in his or her pocket and tell the vultures “this is MY money, you don’t own this, remember”?

  3. How in the name of God can the law firms have this concept of a tame charity? As if recent events hadn’t debased the value of the term charity in Ireland enough, we have this now. I know anyone can set up a charity, but I would have thought that to get any of the normal breaks from Revenue you would have to satisfy at least some basic criteria other than saying “we want to help the children reach their potential” and then sending millions out of the country while not actually doing anything for the children. What’s to stop me setting up “Help the Antos” as a charity instead of a limited company and getting whatever reliefs Revenue offer on my income from my plumbing (or solicitoring) day job, while having a sideline in vulture facilitation?

CEO of “Save the Antos”
Please send money NOW.

(*) technically everyone involved in this picture is unscrupulous so this word may be redundant

We are not sure. I have a feeling, post the public outcry, that we will find that they are now all the in-house Charities owned by law firms (i.e. Matheson’s Medb, Badb and Eurydice Charitable Trusts, and A&L Goodbody’s Arbutus Homeless People’s Trust).

Again, this is why I would suspect that we will find that the Charities involved are all in-house law firm Charities. The law firm partners might have signed additional separate side-letters / undertakings with the vulture to give the vulture additional protection if a partner went “rogue”. The US lawyers that the vulture firms use are incredibly thorough (can’t overstate this enough). They would not leave this to chance, regardless of what the Irish law firm would say.

You find in any society that when rules start getting broken and not prosecuted, that more rule breaking follows. We are seeing this with the rule changes the Revenue made to help the vultures get around Revenue’s anti-avoidance tax laws being used for Super QIFs (so Irish rich can get same benefit). The HSE is the biggest budget in the country (bigger than any plc or other). You will have seen that the HSE’s budget has been used to “leak” money out to 3rd party “Charities” whose CEOs and Boards dined out at tax payer expense. Perhaps the law firms saw this and thought, “what the hell”. Because we live in a “Godot Defense” society (my earlier post), this goes on everywhere. This is the price we pay for not protesting at anything, and enduring the “Godot Defense” every time (another) major Irish scandal gets put “on the long finger” for investigation.

This is the best thread I’ve read in a long time, absolutely fascinating. Deep thanks for your research observer35. Not least because I feel personally involved with a (performing) mortgage being paid to Mars Capital :angry:

Did you see an article in the Sunday Business Post a few weeks ago by Karl Deeter? It’s not online afaik, so I can’t link to it. He raised several issues, one of which was the unknowability of a company’s S110 status due to Revenue’s confidentiality rules, which you’ve answered with Mars’s own accounts (thanks). I spoke to a staff member of Mars Capital and neither they nor anybody else they had asked within the company had heard of it, although that’s not a big surprise.

Karl’s other main point was that the S110 status could be potentially jeopardised. It’s supposed to be a passive vehicle, but if it’s perceived to be “active”, for example, by pursuing mortgage holders through the courts, etc., then Revenue could revoke S110 status. Have you heard of that? From some of the material you’ve linked to, even it were the case, it would seem Revenue would be unlikely to do that given their tacit support for the whole scheme :imp:

I still have no idea what perceived benefit there is, to the country or just to FG, to allow it and possibly be directing Revenue, the Charity Regulator and other organisations to facilitate it :confused:

As an individual customer of Mars you are fine from a tax perspective… They have sought to overcome the tax residency rules by being owned by charities here to establish their Irish tax residency thank’s to Matheson and their inherent goodness. They must have inherited that from their previous Chair AJF.

For payments to companies such as Beltany Property Finance Limited, more difficult. PWC’s accounts mean you have no idea who you are paying the interest to if you are paying it to them so best to withhold tax and submit it to the revenue.

Then look at Carval’s vehicle, Launceston

It’s parent is not Irish - split between a couple of Lux-cos.

Assets less current liabilities 284,086,268

Interest Income 34,561,963

Tax 3,847,124

WHAT THE FUCK? THAT TAX? Someone fucked up, I mean KPMG are the Auditors and Matheson are the solicitors. Heads must be fucking rolling…

This makes no sense.

Fast forward to Note 7. What a fucking relief. No fuck-up. The actual tax charge in the current period was 500 (250 for the parent and 250 for the subsidiary). The charge is deferred tax - 3,846,624. That is how you spread tax timing differences that will never result in a tax payment.

Fucking hell. I really thought someone had fucked up there.

And eh. oh yeah, paying that crowd without deduction of tax is somewhat questionable…

I am going to have a drink and watch Jim Jeffries.

KPMG Auditor:


From the first page of your uploaded vulture Section 110 accounts on SCRIBID, you have shown that Matheson …
a.k.a. owners of 3 in-house “infamous” Irish Charities Medb, Badb, & Eurydice Charitable Trusts, as used by Vultures.
a.k.a. with a link with the even more “infamous” Mossack Fonseca, Panamanian law firm.

… are the lawyers to AT LEAST 3 of the 7 main vulture funds that have bought almost all NAMA / IBRC loans to date (and who will do the vast bulk of the +€20bn in Irish taxes avoided over the next decade), as shown on this link:

  1. Oaktree (a.k.a. Section 110 Mars Capital Ireland) - Matheson as Lawyer.

  2. Goldman Sachs (a.k.a. Section 110 Beltany Property Finance) - Matheson as Lawyer.

  3. CarVal (a.k.a Section 110 Launceston Property Finance, Vanguard series) - Matheson as Lawyer.

Are Matheson (and their three in-house “Irish Charities”), the main lawyers behind most of the vulture funds active in Ireland who have used the Section 110 (with all equity owned by an Irish Charity), to avoid +€20bn in Irish taxes?

(I can vouch for senior Dublin law partners who are disgusted at what has been going on, and who tell me their firm had nothing to do with vultures using Section 110s in the domestic economy. I didn’t really know whether to believe them, but perhaps Matheson are the main drivers here, with SFM & TMF as the main administrators / provider of “shell” Irish Directors).

Are FG really going to go to the mat on this to defend Matheson?

If you google, you will find loads of “formal” correspondence between Matheson and the Dept of Finance about tax structuring.

Is this why Matheson won 2016 Irish Tax Law Firm of the Year from the International Tax Review?

If Oaktree, Goldman or Carval (and potentially others) find out that their Irish tax-free vehicle is not really so tax-free (especially if FF get active here), they are going to want to sue someone very badly … very badly indeed.

There were a number of FG and Labour Ministers at the Matheson Christmas lunch in the Intercontinental last December

Putting it all together - Vultures + Vehicles + Lawyers + Accountants + Charity(s)
(with help from grumpy).

walk of shame for the big 7 vultures and their Irish advisors using Section 110 to avoid all Irish taxes on their Irish assets.


Mars Capital’s MATHESON (with 3 in-house Irish Charities Medb, Badb and Eurydice), A&L Goodbody (with in-house Irish Charity, Arbutus Homeless People’s Trust) and DILLON EUSTACE (have some complex Charity holding structure via CASTLEWOOD CS HOLDINGS) dominate this. POSTSCRIPT Only one small mention of biggest Arthur Cox (biggest legal firm and biggest legal advisor to State) and blood William Frys (who just do Deutsche Bank, really only a quasi-vulture). No mention of McCann Fitzgerald.


** Big 4 firms are all there - KPMG, PWC, **Deloitte **and E&Y, plus Grant Thornton


** Dominated by the Structured Finance Management or a.k.a. SFM

the list:

  1. Vulture: Oaktree Capital Management
    Irish Section 110 “Tax Avoidance” Vehicle(s): Mars Capital Ireland (and whole series of Mars No 1, 2, 3 & 4, and counting)
    Irish Charity who owns the Section(s) 110s: Medb, Badb, Eurydice Charitiable Trusts
    Origin of Irish Charity: MATHESON IN-HOUSE
    Irish “Shell” Directors: TMF
    Irish Law Firm: MATHESON
    Irish Accounting Firm: Grant Thornton
    Mars Capital AR
    Mars Capital B1

  2. Vulture: Lone Star Funds
    Irish Section 110 “Tax Avoidance” Vehicle(s): Whole series starting in LSREF iii (or LSREF ii), [small sample below]
    Irish Charity who owns the Section(s) 110s: Castlewood CS Holdings, in Trust for unknown final charity
    Origin of Irish Charity: ?]
    Irish “Shell” Directors: [seem to have their own “dedicated” group that have worked across lots of LS funds]
    Irish Law Firm: DILLON EUSTACE (some A&L Goodbody)
    Irish Accounting Firm: E&Y (some Grant Thornton)
    LSREF II Acorn AR
    LSREF II Holly AR
    LSREF III Wight AR
    LSREF III Wight B1
    LSREF III Achill AR
    LSREF III Achill B1
    LSREF III Stone AR

  3. Vulture: CarVal Investors
    Irish Section 110 “Tax Avoidance” Vehicle(s): Launceston Property, Vanguard Property, Vanguard Auto, Stapleford Finance, Pentire Property Finance, Callington Property Finance, Emberton Finance
    Irish Charity who owns the Section 110s: [equity being held by Dutch Company - Irish Charity could be behind this]
    Origin of Irish Charity: ?]
    Irish “Shell” Directors: SFM
    Irish Law Firm: MATHESON / A&L Goodbody / Arthur Cox
    Irish Accounting Firm: KPMG
    Launceston Property AR
    Vanguard Property AR
    Vanguard Auto AR
    Vanguard Auto B1
    Stapleford Finance AR
    Callington AR
    Emberton AR

  4. Vulture: Goldman Sachs
    Irish Section 110 “Tax Avoidance” Vehicle(s): Beltany Property Finance, Kenmare Property Finance, Liffey (and others).
    Irish Charity who owns the Section 110(s): [equity being held by SFM - a big Revenue no-no]
    Origin of Irish Charity: [na]
    Irish “Shell” Directors: SFM
    Irish Law Firm: MATHESON
    Irish Accounting Firm: PWC
    Beltany Property AR
    Beltany Property B1
    Kenmare Property AR
    Kenmare Property B1

  5. Vulture: Cerberus Capital Management
    Irish Section 110 “Tax Avoidance” Vehicle(s): Large series, all beginning with PROMONTORIA, [very small sample below]
    Irish Charity who owns the Section 110(s): [equity being held by Dutch Company - Charity could be behind this]
    Origin of Irish Charity: ?]
    Irish “Shell” Directors: SFM
    Irish Law Firm: A&L Goodbody
    Irish Accounting Firm: PWC / KPMG
    Promontoria Eagle AR
    Promontoria Eagle B1
    Promontoria Avon AR
    Promontoria Chestnut AR

  6. Vulture: Apollo Global Management
    Irish Section 110 “Tax Avoidance” Vehicle(s): Tanager Limited (could be others)
    Irish Charity who owns the Section 110(s): Tanager Charitable Trust
    Origin of Irish Charity: [charity is actually based in Jersey, not Irish; lots of charitable causes in Jersey I’m sure]
    Irish “Shell” Directors: Sanne Capital Markets Limited
    Irish Law Firm: A&L Goodbody
    Irish Accounting Firm: Deloitte
    Tanager AR
    Tanager B1

  7. Vulture: Deutsche Bank (only a quasi-vulture)
    Irish Section 110 “Tax Avoidance” Vehicle(s): Havbell Limited (could be others)
    Irish Charity who owns the Section 110(s): Castlewood CS Holdings, in Trust for unknown final charity [same Lone Star]
    Origin of Irish Charity: ?]
    Irish “Shell” Directors: Deutsche International Corporate Services Limited
    Irish Law Firm: William Fry
    Irish Accounting Firm: Deloitte
    Havbell AR
    Havbell B1

All of the above Section 110s are paying:

  • annual Irish taxes of c €250 (there is the odd “glitch” where amount comes to €2,000), and
  • on Irish revenues in the tens of millions mostly pure interest “profit”, and
  • and have Irish assets in the hundreds of millions (and billions when added up for individual vultures).

Time for this again:

Outside of the Sunday Business Post, and the Independent Opinion articles from Stephen Donnelly and Paul Wyse, the Irish journalists reaction to this has either been:

(1) to swallow the Dept. of Finance line (it is a loophole, and Revenue are looking into it), or

(2) to defend the Dublin professional firms / Dept of Finance (Cliff Taylor, John McManus, Prof Eamonn Walsh)

Discussed here in more detail:

Those award ceremonies are like children’s parties. Everyone gets a party bag :smiley:

Anyone have a precise cost on the Herbert Street office disaster for the partners in MOPS? Not the shiniest buttons in the box :stuck_out_tongue:

I’m guessing at most the revenue will say don’t do it again…

Here is another set of incorrect accounts audited by PwC’s Ronan Doyle.

Cerberus vehicle re project eagle. You won’t find cerberus mentioned anywhere which is what makes the accounts dodgy :wink:

Interest income STG 111,765,822

Interest Expense STG 61,780,190

Asset Mgt fees paid to Dutch BV STG 31,183,054 (Yippee)

Profit STG 7,788

Tax STG 1,947

Gross Assets STG 1,187,774,740

How is this a Section 110??? No fucking idea.

How does one know it is Cerberus? … 82-bv.html

Sweet 8DD

Here are the accounts for a Carval entity, another 250 euro tax charge… purchased assets from NAMA. … 4-accounts

Interest income 8,098,958

Interest expense 7,144,271

Note on interest expense

No shit :laughing:

Tax 250

Assets less current liabilities 79,572,231

Auditors KPMG
Solicitors The great Arthur Cox