Shadow Treasury Minister Pat McFadden has written to Nadhim Zahawi, challenging him to shed more light on his tax and financial affairs.
Since becoming chancellor following Rishi Sunak’s resignation earlier this month, Zahawi has faced lingering questions about his relationship with a Gibraltar-based company, Balshore Investment, controlled by his parents.
“As the custodian of public finances and guardian of the UK tax code, it is obviously important for the public to have the assurance that your tax affairs are completely in order,” McFadden wrote.
Balshore Investments was the recipient of shares in YouGov, the hugely successful survey company that co-founded Zahawi, while he himself did not receive any shares.
YouGov has described Balshore Investments as “a family trust of Nadhim Zahawi.” The chancellor has insisted that “he has not, nor has ever had, any interest in Balshore Investments and is not a beneficiary of it.”
The Observer reported on Sunday that Balshore Investments sold YouGov shares worth £ 26 million in 2018, and the proceeds were transferred to an unknown recipient.
In the same year, the chancellor’s family-owned business in the UK, Zahawi and Zahawi, then controlled by him and his wife, received unsecured loans of £ 26 million from an undisclosed source.
Zahawi and Zahawi used the loan to buy a number of properties across the UK.
In his letter, McFadden raises a number of questions to Zahawi about these transactions and Balshore Investments ’background, including,“ why Balshore Investment received 42.5% of YouGov shares at the time of its foundation? ” and, “YouGov’s initial accounts seem to indicate that you did not receive any shares despite being one of the founders. Why not?”
McFadden adds: “Is there any connection between the unsecured loans granted to Zahawi and Zahawi for their real estate investments and the £ 26 million Balshore Investment could have obtained in capital gains as a result of the sale of stakes in YouGov? ? “
He also asks about reports that Zahawi’s tax matters have been under investigation, either by the HMRC or the National Crime Agency, which Zahawi has vehemently denied.
In a statement released last week, Zahawi described the reports as “defamation.”
“Let me be absolutely clear. I’m not aware of that. I haven’t been told that. I’ve always declared my financial interests and paid my taxes in the UK. If there are any questions, of course, I’ll answer any question what HMRC has of me, ”he said.
Zahawi was removed from the race to become the next prime minister last week, after receiving only 25 votes despite a well-organized campaign.
Many of his colleagues were baffled by his decision to accept the promotion of secretary of education to chancellor when Sunak resigned, before urging Boris Johnson to resign less than 48 hours later.
Zahawi remains in office as part of Johnson’s interim cabinet, but ministers have collectively agreed that no major fiscal decisions will be made until the prime minister’s successor is appointed.