The roots of a tree form a mass that can be three times larger than its branches. London is also like that: you might look at a building or a business and think, there is a collection of bricks, there is a person who sells things, but this is less than half the story. Beneath the building are financial relationships that can spread for thousands of miles, a mirror world of asset structures, a complex that remains unseen – unless you’re tedious enough to look it all up, that is, and to insist on telling people about it while they try to enjoy a drink.
This is what I did recently on a tour of several London pubs, which look as if they’re pubs in London, but which are also – like tens of thousands of other London properties – owned as investments by companies in the British Virgin Islands, the Caymans, the Isle of Man, Luxembourg and Jersey, for reasons that may have little connection to the pub itself as a business or the community in which it stands. The pub was once fundamental to our national character – “would I were in an alehouse in London,” Shakespeare’s boy cries in Henry V, as he yearns for a pot of ale and safety amid the siege of Harfleur – but around a quarter of all our pubs have closed since 2000. And now an alehouse in London offers a different kind of liquidity, a place for wealth to be kept, a cover for the international capital that flows quietly beneath.
We began in a pub that is geographically and culturally at the heart of British politics. The Two Chairmen in Westminster is where Treasury officials traditionally gather for a pint after the Budget. It was from the bar of the Chairmen that Nigel Farage launched his fags-and-pints political identity, in a boozy 2007 interview with the Telegraph. The drinkers are Spads, lobbyists, think-tank wonks, the occasional MP. It is a short walk from the offices of Prospect, the Spectator and Unherd.
Ironically, given the amount of Brexiteer refreshment that has been served from its taps, the Two Chairmen was sold to foreigners on 24 June 2016, the day after Britain voted to leave the EU. It wasn’t cheap, at £13.5m. The offshore company that bought the Chairmen, Magnus Property, is incorporated in the Isle of Man (which is self-governing and separate from the United Kingdom, although King Charles is its monarch). The business address for Magnus – the first floor of a small office block overlooking a harbour in the Manx capital, Douglas – is shared with 180 other companies, so we can assume that it exists mainly on paper.
When the Chairmen was sold in 2016, the public could find out that Magnus owned it (pay the Land Registry £7, and you can find out who owns any building), but it wasn’t possible to see who owned Magnus. Offshore companies have long been used to purchase expensive buildings in a discreet and tax-efficient manner. For example, if a former prime minister and his wife walk into an estate agent’s and buy a £6.5m Marylebone townhouse, they’d be named on the title register and have to pay hundreds of thousands of pounds in stamp duty. But if a former prime minister and his wife set up a company, which buys a company in the British Virgin Islands, and that company happens to have a £6.5m Marylebone townhouse as its only asset, the property becomes theirs without stamp duty, and much more quietly (until it ends up in the Pandora Papers).
But then Russia invaded Ukraine, and our government began to come round to the idea that if an international kleptocracy is going to bombard mainland Europe, perhaps our capital city shouldn’t function as its savings account. The Economic Crime Act, which had spent four years on the shelf, was hastily dusted off and the Register of Overseas Entities introduced, which means an offshore company buying or selling property now has to say who its beneficial owners are. This has created a really interesting opportunity for the kind of person who takes a spreadsheet to the pub.
In the case of Magnus Property and the Two Chairmen, the beneficial owners are a wealthy Andorran couple. The couple also owns (through another company registered at the same address in the Isle of Man) a pair of flats in a building on Bedford Square in London that was built in the 18th century for Lord Loughborough, the lord chancellor under William Pitt the Younger.
But the landlords who own the pub are not the pub landlords; when Nigel Farage has a pint in the Chairmen, he’s not buying it from an Andorran investor. He’s buying it from Greene King, which is the leaseholder. Greene King is a pub company, and it’s as British as Harvey Nichols or MG Rover – which is to say that it is Chinese. In 2019 it was sold to CK Asset Holdings (formerly Cheung Kong Holdings), which also owns large chunks of British utility companies such as UK Power Networks and Northumbrian Water. Although technically CK Asset Holdings isn’t entirely Chinese, because it was incorporated in the Cayman Islands.
Having enjoyed a couple of proper Chinese-Andorran-Manx-by-way-of-the-Cayman Islands honest British pints, we headed to Mayfair, to have a drink somewhere rather more presidential. The Qasr al-Watan presidential palace in Abu Dhabi has a floor area 45 times the size of Westminster Abbey; a single room, the great hall, boasts a dome larger than that of St Paul’s Cathedral. Its café serves a signature cappuccino that is decorated, like the palace itself, with 24-carat gold.
The Coach and Horses on Hill Street is frankly a shed by comparison. It’s one of London’s oldest pubs – when it was built in the 18th century, the United Arab Emirates was a part of Eastern Arabia referred to on British maps as the Pirate Coast. It’s in Mayfair, where no parcel of land is too small to attract international investment; in the overseas registry I found a single parking space whose ownership wandered from Belize to Sark to Guernsey to the British Virgin Islands.
And yet the palace and the pub are ultimately the demesne of the same man. The Coach and Horses is owned by Berkeley Square Holdings, which is registered to a post box in the British Virgin Islands. The company has never filed accounts in the UK and no officers are named on Companies House, but thanks to the Register of Overseas Entities, it has declared its beneficial owner: the “Private Department of the President of UAE”. On the night we visited, Sheikh Mohammed bin Zayed al-Nahyan wasn’t in. He’s known to be very keen on falconry, so perhaps he was doing that. I looked up a picture of MBZ, as he’s known (probably not to his face), warmly grasping the hand of Vladimir Putin on a recent state visit, and tried to imagine the two of them holding pints.
As with the Two Chairmen, the actual business of running a pub is done by a pubco, in this case Shepherd Neame (incorporated in England in 1914). We drank a couple of pints of generic session IPA. In the condiment buckets – a bellwether of pub quality – the mustard and brown sauce were running low. As one of the world’s richest autocrats, MBZ should really be across this. Then again, perhaps it’s best he remains an absentee landlord. A colleague was offered flowers by a young man in the loos, presumably in the hope of embarking on a relationship that would be illegal in the UAE.
Despite having spent hours humouring me and my spreadsheet, my colleagues agreed to press on into the night, to Soho. Little did they know what awaited them there. The Pillars of Hercules, on Greek Street, was once a mainstay of London’s literary drinking culture, the haunt of Julian Barnes, Martin Amis, Ian McEwan and (most regularly) the poet and New Statesman contributor Ian Hamilton. The old pub sign still hangs by the first-floor windows but the inside has been ripped out and replaced by a Simmons cocktail bar. “Now this,” observed a colleague over music loud enough to eliminate conversation, “feels like offshore money.”
In fact, Simmons is a British company. It has been led by the entrepreneur Nick Campbell since 2012, having started from a single bar in King’s Cross, and in 2018 Campbell sold a majority stake to the private equity firm Lonsdale Capital Partners, which is incorporated in England. But Simmons is the leaseholder, and from its accounts I’d guess it spends something between £15,000 and £20,000 a month renting the pub. Where does that go?
The building is owned by Marsa Properties, which was formed in Gibraltar, but its beneficial owner is another company, which is registered in Cyprus, and the beneficial owner of that company is another company, called Veris Ltd, registered in the Isle of Man. This appears to be Veris Secretarial Ltd, which also seems to trade as Veris Nominees Ltd. It is named in the Panama Papers and the ultimate beneficial owner is… Veris Nominees Ltd. It owns itself? Not really. Veris has a licence to provide trust services, so it seems it’s not the real owner but a trustee, acting on behalf of a beneficiary or beneficiaries, and you can’t know who they are. This is a loophole that the UK’s new rules on overseas ownership failed to close. If someone really wants to own your local without anyone else finding out who they are, it’s easily done, and the beneficiaries of the trust can make a decision about the pub in your community and you can’t even know who they are.
Before I leave I head to the basement loos where I am approached by the ghost of Clive James, whose 1979 essay collection At the Pillars of Hercules is named after the old pub. He tries to tell me an amusing anecdote about going to the Gay Hussar with Harold Pinter but the ceiling above us rumbles with the bassline to a Pitbull song and the heels of twenty-somethings ordering cocktails called things like “Sex with a Lad!” that are served in teapots. I’m pathologically averse to toilet chat and he doesn’t exist, so the conversation is a non-starter, and in any case it would only depress Clive to know the Hussar – once the nexus of left-wing political intrigue – closed in 2018, and is now owned by a company in the British Virgin Islands.
This is not just a London issue – the overseas register contains hundreds of entries for pubs across the country – but it is concentrated in the capital, because its property market absorbs money like almost nowhere else on Earth. Does it matter if your local is owned from some offshore island? I would argue that it does, not because doing so is necessarily nefarious (I would not, even after a long evening of investigative drinking, imply any wrongdoing on behalf of the owners of our nation’s pubs unless there was a very good reason to do so) but because of the power relationship it confers.
The profits of even a popular London pub would never, according to one landlord I spoke to, catch up with a market that values a single boozer at more than £10m. The asset owner, not the publican or the community that meets and carouses in the building, is always in the driving seat. This is what the community around London’s best-loved cinema, the Prince Charles, discovered when the freeholder (a company incorporated in the Isle of Man) decided it would be more valuable as a hotel. The city is one thing to the people who live there, and something very different to another group of people, far away.
[See also: My weird night with the New Right]
Content from our partners
