Frontman of U2, Bono, has recently been caught up in an economic investigation. Bono, also known as Paul David Hewson, happens to be one of the wealthiest musicians in the world. The Irish musician often uses his platform and wealth to support charities that promote of social justice. He has also been using his funds to venture into the world of business.
In 2007, Bono bought out a third of a Lithuanian company called UAB Nude Estates 2. Between 2007 and 2012 the company was taken over by a Maltese company named Nude Estates Malta Ltd., and then in 2012 it was further taken over by another offshore company called Nude Estates I Ltd., which was based out of Guernsey. The company invested in a shopping mall in Utena, Lithuiania that housed 20 stores in its 3,700 square meter location since 2006. Now, thanks to an anonymous leak of The Paradise Papers, that mall is under investigation for tax avoidance.
According to The BBC, the company first declared a loss of 3 million euros in 2010. Tax expert, Ruta Bilkstyte, reports that the loss was created by a write-down of the company’s fixed assets. the company then carried that loss until 2016 despite the fact that they actually profited for five of those years. It is estimated that the company avoided paying around 47,000 euros. The Lithuanian State Tax Inspectorate has been brought in to investigate whether there was a deliberate tax breach or not.
Sigitas Jautakis, director of Nude Estates 2, denies both knowledge of Bono’s involvement in the company and knowledge of the illegal tax activity. International Consortium of Investigative Journalists (ICIJ) has been working with over 100 media organizations in 67 different countries to investigate the 13.4 million records that were passed on to them. The records mostly leak documents from the offshore law firm Appleby, but they also contain documentary form over 19 different tax jurisdictions.
Spoekesperson for Bono, Kathy McKiernan, reported that Bono is simply, “a passive, minority investor.” Bono went on to release his own statement regarding the scandal:
“I would be extremely distressed if, even as a passive minority investor in UAB2 in Lithuania, anything less than exemplary was done with my name anywhere near it.I’ve been assured by those running the company that it is fully tax compliant, but if that is not the case I want to know as much as the tax office does, and so I also welcome the audit they have said they will undertake.I take this stuff very seriously. I have campaigned for the beneficial ownership of offshore companies to be made transparent.Indeed, this is why my name is on documents rather than in a trust. The fact is I welcome this reporting. It shouldn’t take leaks to understand what’s going on where.There should be public registries so that the press and public can see what governments, like Guernsey, already know.”
Bono argues that he had no knowledge of the tax avoidance and supports the investigation. The investigation is pending, and more updates will come in the near future.
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