Charlotte Street Partners



Pandora's box

Written by Maria Julia Pieraccioni, associate
Edited by Kevin Pringle, partner

5 October 2021

Good morning,

Tax evasion is a crime. But tax avoidance, that’s what put us in business”: words delivered straight into the camera by a fictionalised Jürgen Mossack, played by Gary Oldman in the 2019 movie The Laundromat. Oldman plays one of the infamous duo behind the Panamanian law firm and corporate service provider Mossack Fonseca & co, which was caught setting up shell corporations to hide fraud, tax evasion and evasion of international sanctions in 2016. The Panama Papers – as the millions of leaked documents came to be known – was the biggest security and privacy breach in the offshore finance industry.
Until Sunday.
Branded the Pandora Papers, the cache of leaked documents reveals the deals and hidden assets of the world uber wealthy, in what is now being calledthe “biggest trove of leaked offshore data in history”. The emails, memos, incorporation records, share certificates, compliance reports and complex diagrams of corporate structures were leaked to the International Consortium of Investigative Journalists (ICIJ) in Washington, who were also authors of the investigation behind the Panama Papers. The sheer number of documents prompted the ICIJ to reach out to select media partners including The Guardian, BBC Panorama, Le Monde and The Washington Post for help. The massive investigation took more than 600 journalists to complete over an 18-month period, and reveals the extent to which the richest will go to hide their assets.
The Pandora Papers do not bode well for those among the people cited, ranging from Russian oligarchs to heads of states in the middle east and the Balkans, to your regular red-carpet-walking celebrity. From the King of Jordan, Abdullah II, to the prime minister of the Czech Republic Andrej Babiš and Cyprian president Nicos Anastasiades, those cited have accumulated billions in offshore shell companies. Elton John, Ringo Starr, Shakira and German model Claudia Schiffer were also among those cited in the papers. While these celebrities have not been accused of any wrongdoing, all had PO box companies in tax havens like the British Virgin Islands, Panama or the Bahamas.
The Pandora Papers contagion is spreading to the UK too: former prime minister Tony Blair and his wife Cherie allegedly purchased an office in Marylebone by acquiring an offshore company based in the British Virgin Islands to avoid property taxes. Major donors to the Conservative party have also been cited, included one who funded prime minister Johnson’s campaign
Tax avoidance, albeit problematic, is not illegal and there may be legitimate reasons for people to use offshore vehicles. However, the Pandora Papers reveal the astonishing global cost of tax avoidance, estimated to be anywhere between $400 billion and $800 billion. They also shed light on the coordinating role of London-based firms which use existing loopholes in the UK legal system to aid and abet their clients in avoiding taxation.
In the poem Works and Days by Hesiod, Pandora was created by the gods to punish Prometheus for stealing Olympus’ fire, and therefore curse all mankind. As in ancient Greek so too in modern English, Pandora seems to mean “the one who bears all the gifts”.


The Metropolitan police is launching a review of its internal culture and professional standards following the rape and murder of Sarah Everard. Writing in the Evening Standard, Metropolitan Police Commissioner Cressida Dick assured the public that an independent, high-profile figure will be tasked with leading the review. (£)
New simplified rules for international travel have come into force in the UKtoday, with the traffic light system replaced by a single red list. Airlines UK has welcomed this change, saying that it would make travelling easier and cheaper as fully vaccinated travellers arriving from non-red list countries will no longer have to take a test before arriving in the UK.
A small private plane crashed into an empty building on the outskirts of Milan on Sunday, killing all eight people onboard. The building was empty at the time of the crash. Reasons for the crash are still to be determined.

Business and economy

In his first in-person conference speech as Chancellor, Rishi Sunak told Conservative Party members that while he wants to cut taxes it would be “immoral” to do so now. While defending his position to increase taxes, the Chancellor cast himself as an upholder of fiscal responsibility, justifying it as unjust to keep loading debt onto future generations. (£)
UK Brexit minister David Frost said on Monday that the British government will suspend parts of the Brexit trade deal that relate to Northern Ireland if the EU does not agree to concessions. Despite approving the arrangement in October 2019, Frost is declaring the Northern Ireland protocol unsustainable. (£)
Social media platforms Facebook, WhatsApp and Instagram experienced a major outage on Monday evening, although the cause has yet to be determined. As a result, parent company Facebook’s shares dropped 5.74% on Wall Street, three hours into the outage.

Columns of note

“Gambling takes a remarkable toll on society” – so much so that cultures and societies across the world and throughout centuries have fought against it. In this piece for The Guardian, Heather Wardle takes a look at the UK government’s review of gambling harms recently published by Public Health England. The figures show the cost of gambling addiction to society including joblessness, debt, and health-related issues. Using these numbers as evidence, Wardle criticises the government’s soft-touch approach to its review of the 2005 Gambling Act – it’s time to do more, and better.
The Nobel Assembly of the Karolinska Institute in Stockholm has chosen to award the prize for physiology or medicine to David Julius, of the University of California, San Francisco, and Ardem Patapoutian of Scripps Research. In this piece in The Economist, the researchers are credited with discovering the molecular mechanisms of two distributed senses – temperature and mechanical stimulation – through their joint research on chilli peppers’ effects on the human body. The piece underlines that this work is in fact important not only for the scientific world but also for humanity at large. Because, truly, “it is through the senses, and the senses alone, that human beings are able to perceive the world”. (£)

Cartoon source: The New Yorker


What happened yesterday?

Stocks in London finished trading in the red yesterday, as rising bond yields in the US felt the pressure of suspended share trading of Chinese property giant Evergrande. The FTSE 100 ended in negative territory yesterday, trading down 0.23%. Meanwhile, sterling ended the day stronger, trading 0.49% higher on the dollar at $1.3613, and 0.27% higher on the euro at €1.1724.
In Europe, the Stoxx 600 felt the heat of a surprise decision by the Organisation of Petroleum Exporting Countries (OPEC) to stick to existing output plans at its latest meeting, despite a surge in natural gas prices increasing demand. The pan-European index fell 0.47% yesterday.
OPEC’s decision was felt across the Atlantic as well, where US equities fell after ending last week with their worst performance since February. At midday, Wall Street’s S&P 500 was down 1.5%, while the Nasdaq Composite fell 2.4%.

What’s happening today?

Bluefield Solar
Hotel Choc     
Scs Group      
Inspiration Hlt 
Trading Announcements
Prospex Eng  
Final Dividend Payment Date

Interim Dividend Payment Date
Croda International    
Holders Tech.
UK Economic Announcements
(09:30) PMI Services
International Economic Announcements
(08:55) PMI Services (GER)
(08:55) PMI Composite (GER)
(10:00) Producer Price Index (EU)
(14:45) PMI Composite (US)
(14:45) PMI Services (US)
(15:00) ISM Prices Paid (US)
(15:00) ISM Services (US)

Source: Financial Times

did you know

In 1952, the Kray twins became the last people to be held in the Tower of London for failing to report for national service. (Source: @qikipedia)

Parliamentary highlights

House of Commons

The House of Commons is in recess until 18 October 2021.

House of Lords 

The House of Lords is in recess until 11 October 2021.

Scottish parliament 

Time for Reflection
Ani Rinchen Khandro, Director of Kagyu Samye Dzong Edinburgh Meditation Centre and Honorary Buddhist Chaplain, University of Edinburgh Chaplaincy Service
Parliamentary Bureau Motions
Topical Questions
First Minister’s Statement
COVID-19 Update
Ministerial Statement
Covid Recovery Strategy
Scottish Government Debate
Legislative Consent to the Environment Bill
Committee Announcements
Business Motions
Parliamentary Bureau Motions
Decision Time
Member’s Business
S6M-00554 Gordon MacDonald: Big Noise Programme in Wester Hailes

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