Ana Brnabić, the Serbian prime minister of Croatian descent, could be involved in a deeply troubling affair riddled with tax evasion, hidden ownership and a dangerous mix of public and private interests. This can be concluded after looking at the exclusive documents from the Malta Files project in the possession of the European Research Cooperation (EIC), in which Nacional is an official member since the beginning of 2018.
Those documents, which Nacional exclusively publishes, show that the Serbian prime minister was familiar with some complex offshore operations of a network of energy development companies, including Continental Wind Serbia, where she was a director before entering the state administration. There she was introduced to the creation of the Serbian part of the offshore corporate structure for the renewable wind energy project.
That company is part of a complex corporate structure, obviously created for tax optimization, which should receive EUR 523 million from the Serbian state electricity distributor over twelve years, thanks to the Ordinance on State Incentives that was approved while she was a minister in the Serbian government. Ana Brnabić for Nacional said, among other things: "I was not involved or had anything to do with the legislation concerning renewable energy sources." However, before she entered the state administration, Ana Brnabić advocated for the adoption of new regulations on renewable energy in Serbia.
After she became prime minister, all legal and regulatory obstacles for the largest private investment in Serbia, which included the network of those secretive offshore companies, including the one in which she was a director, disappeared. As it seems, that large private investment in Serbia will not reduce the price of electricity for the local population. In that multimillion-dollar project, in which some well-known powerful global investors are also involved, it is likely that the Serbian state budget will not have significant tax revenues from it. Even the most powerful Serbian politician, Aleksandar Vučić, is observing all this silently, although he has previously expressed harsh criticism of those investors.
Documents in the possession of the investigative network EIC show that Ana Brnabić and her associates at Continental Wind of Serbia assisted in the merger of another Serbian subsidiary of the Maltese parent company, which received an interest-free and unsecured loan of 200.000 euros, which appears to have violated Serbian regulation on the minimum interest rate on loans between related companies.
After Ana Brnabić was appointed in 2017 as Vučić's successor at the head of the Government of Serbia, the capital investment of the energy development company Continental Wind in Serbia - the Čibuk wind farm project - received permission to start construction, with up to 190 million euros in loans from the International Finance Corporation (IFC ) and the European Bank for Reconstruction and Development (EBRD). Masdar, the state-owned company of the United Arab Emirates, is also investing significantly in the project, which would not be possible without guaranteed future income from the generated electricity.
Despite the fact that Continental Wind presents itself as an "American" company, there are only so-called shell company in the tax haven of Delaware. The company and its founder, former Glencore and Trafigura employee Mark W. Crandall, an American citizen living in Belgrade, have amassed revenues from the development and sale of renewable energy projects using many offshore jurisdictions, including Luxembourg, Guernsey, the British Virgin Islands, Cyprus, the US the federal state of Delaware and Malta. In none of these countries does the company own or publicly develop wind farms. Since developing the Čibuk wind farm project, Continental Wind Partners sold its 40 percent stake in the Cypriot company to Finnish and German investors in November 2017 and January 2018, but the value of the deal remains unknown. A little earlier, at the end of 2015, Crandall, Ana Brnabić's former boss, and his partners founded a Maltese mutual fund that allows it to cover its tracks and hide its real owners. Some of them will make millions from the sale of the Čibuk wind farm.
All of these are key elements that show how one of the largest and at the same time more secretive investments in Serbia was born and developed, and this story reveals in detail how foreign investors in transition countries operate with the support of the IFC and the EBRD. Alex Cobham, executive director of the Tax Justice Network, an international mediation group in the field of international tax evasion and avoidance, based in Great Britain, told Nacional that he found it a deeply troubling story of financial fraud, hidden ownership and dangerous public interference. and private interests. The outlines of that story began to emerge in September 2015, when Serbia was rocked by a major wiretapping scandal, including a serious accusation of accepting bribes. A transcript of a private telephone conversation between the Prime Minister of Vojvodina and the president of the opposition Democratic Party, Bojan Pajtic, and Lidija Udovički, the wife of Mark W. Crandall from Continental Wind and the sister of Kori Udovički, the then Minister of State Administration and Local Self-Government, was leaked to the media.
According to that transcript, Lidija Udovički told Pajtic that she was blackmailed by Nikola Petrović, director of Elektromreža Srbije (EMS), the state electricity operator. He allegedly requested two million euros in cash in order to approve the connection of the Čibuk wind farm in Dolovo, Vojvodina, which is Continental Wind's capital investment, to the Electric Grid of Serbia. In addition to being the head of a large state-owned company, Petrović was also the best man at the wedding of Aleksandar Vučić, then prime minister and president of the ruling Serbian Progressive Party, and today's president of Serbia.
Pajtić later confirmed that the transcript of his phone conversation was authentic, while Udovicki initially neither confirmed nor denied what was published. A year later, she told police investigators that she had never met or spoken to Petrović, and Petrović denied asking for a bribe. However, the story certainly additionally contributed to the creation of a perception that marks Serbia as a hotbed of corruption at the highest level, which is one of Serbia's handicaps on the way to the European Union.
In the same month in which the telephone conversation took place, September 2015, Aleksandar Vučić arrived on a state visit to Washington. There he was greeted by protests. Five American congressmen signed a letter at the time, which they handed over to the then American vice president, Joe Biden, detailing corruption in Serbia. That letter shows how a small group, including Vučić's brother Andrej and Nikola Petrović, consolidated their influence in "all the big companies in Serbia."
Vučić accused "tycoons" of organizing that American protest, claiming that they are also behind blackmail cases in Serbia, and a local tabloid that supported Vučić named Mark W Crandall as one of them. Such calculations were instigated by Vučić himself.
"Some want to build wind farms in Serbia, where there is no proper regulation, with the idea that they will sell three times more expensive electricity," said Vučić and added:
"An American company and a relative of one of our ministers are involved. They want to get that job at any cost.” Crandall denied to Nacional that he was in any way involved in writing that protest letter.
Soon after, a new prime minister came.
The date is October 4, 2015, the director of the local branch of Continental Wind is Ana Brnabić. She just turned 40 years old and obtained an MBA degree from the University of Hull in the UK, and she had consulting experience in USAID projects in Serbia. One of its main jobs at that time was the development of the wind farm in Dolovo.
She held a press conference in the Government of Serbia, where she emphasized that there were no illegal activities in her company, that there were no problems in the company's communication with the Government of Serbia, and that there were no corrupt activities during the proceedings. This effectively ended the scandal surrounding wiretapping and accepting bribes.
She then publicly resigned from the position of director in the company.
At that time, Ana Brnabić was widely reported in the Serbian press as the most likely candidate for the head of the Delivery Unit, an informal body within the Serbian Prime Minister's office that is responsible for the coordination of Serbian ministries. As reported, the Delivery Unit was established at the behest of former British Prime Minister Tony Blair.
But Ana Brnabić did not take that position. Despite her public resignation, she remained the director of Continental Wind Serbia for the next ten months, until August 19, 2016. After that, her career in the Serbian government progressed at lightning speed.
In August 2016, Ana Brnabić replaced Kori Udovicki as Minister of State Administration and Local Self-Government, and in June 2017, when Vučić became the President of Serbia, the Serbian Parliament surprisingly appointed Ana Brnabić as Prime Minister, which brought her to the headlines. newspapers around the world as the first openly gay head of government in Eastern Europe. Its priorities have become the fight against the gray economy, the reduction of bureaucracy and the suppression of corruption in a country whose highest oligarchy hides its wealth in offshore companies. Ana Brnabić also announced that her government will pass a law in the parliament according to which all citizens will have to reveal the origin of their property. After nine months, this has still not been fulfilled.
Documents in the possession of the European Research Cooperation (EIC) within the Malta Files project, in which Nacional also cooperates, reveal that Ana Brnabić, as the director of Continental Wind Serbia, was familiar with some of the offshore operations of its international parent company.
On September 11, 2014, the CEO of Continental Wind Partners and Crandall's business partner, Italian citizen Fabrizio Cagnasso, who is a resident of Monaco, sent an email to the Maltese legal and advisory firm Credence. Cagnasso is the owner of the company Deprojen, based in Monaco, the 16% owner of Continental Wind Serbia. Deprojen was also the owner of Warm Waters Ltd, a company registered in Malta on 2014 September XNUMX.
"We would like to include as soon as possible the Serbian TPN - a special purpose company owned by Warm Waters Ltd", Cagnasso wrote to the officials of the Maltese company and requested the legal documents needed to establish a new daughter company in Serbia, which will be owned by the Maltese parent company. Along with the three requested documents, he listed two persons and their private information. One of them was Ana Brnabić. Less than a month after his first e-mail message, on October 10, 2014, the Serbian branch of Warm Waters - River Power Solutions was established in Belgrade, with 100 Serbian dinars (about one euro) of share capital. From the mentioned e-mail, it is not clear what role Ana Brnabić had in the company River Power Solutions, nor is her role in the Maltese companies visible.
However, a week earlier, on October 3, 2014, Ana Brnabić, as the director of Continental Wind Serbia, signed amendment no. 2 to a lease agreement with a local Serbian landowner, which included River Power Solutions. In addition to the new company of the Maltese owner, several other energy companies were listed in that document, all of which shared the same address: Đure Jakšića 6/5, Belgrade. These are the companies Vetroelektrane Balkana, Vetroelektrane Balkana Zapad and the Serbian wind energy association SEWEA.
Some other employees of Continental Wind Serbia also appear in e-mail correspondence with Malta. Legal advisor Željko Đurić, who had a special power of attorney for River Power Solutions, replied on September 18, 2014 to Fabrizio Cagnasso. He sent him copies of his own personal data and that of Marina Petrović, financial director of Continental Wind Serbia, who was appointed director of the new Serbian company River Power Solutions. Cagnasso also forwarded his e-mail to the Maltese company Credence. Željko Đurić also sent a copy of his e-mail to Ana Brnabić, then director of Continental Wind Serbia.
There were also exchanges of e-mails between Belgrade, Monaco and Malta, and they concerned the establishment of River Power Solutions. According to Malta Files, Ana Brnabić received a copy of another e-mail from Đurić on September 29, 2014. In it, Đurić asked Cagnass for additional documentation from the Maltese parent company regarding its legal representatives.
The third e-mail that Ana Brnabić received as a copy was dated June 8, 2015. It was about an important matter for that Serbian company, a daughter of a Maltese company. The former director resigned, so one of her subordinates asked Cagnass to send him new signed and certified documents for the appointment of a new director. According to Malta Files documents, Ana Brnabić never responded to those e-mails, which she received as CC copies. In March 2015, River Power Solutions became a big story when Serbian media reported that heat pumps could heat the population of Belgrade using energy from the city's Danube and Sava rivers. That project was presented at the Brussels conference by Star Renewable Energy from Glasgow, which worked closely with River Power Solutions. In addition, the media revealed that a local Serbian company has prepared a project of renewable energy sources for the state energy company Beogradske Elektrane. "The project we are working on is aimed at building a heating plant in Serbia, using heat pumps to extract heat from the Sava River in Belgrade," said Crandall at a conference in Sofia in October 2015, adding that investments of 100 million euros are expected.
The project later failed to materialize, but the annual financial statements of Warm Waters' Maltese parent company (which was renamed River Power Solutions Ltd) show that the company's operations were financed through the Maltese bypass.
According to the 2015 annual report, the Maltese parent company with no employees provided a €198.000 interest-free and unsecured loan to its sole branch in Belgrade. That loan was supposed to be repaid by April 1, 2018, and was partially repaid on February 25, 2016 in the amount of 140.000 euros. However, the Serbian Ministry of Finance has officially approved the Rulebook on interest rates in accordance with the "arm's length" principle for all loans between related parties. This set the minimum interest rate for long-term loans between related companies, in euros, which should amount to 2015 percent per year in 2016 and 5,07.
The Serbian daughter company therefore received at least 10.000 euros of possible profit in the form of unpaid interest on the loan in 2015, with regulated repayment. But by the end of 2016, Malta's loans to Belgrade reached 298.000 euros. Those loans were interest-free, unsecured and repayable by April 1, 2018, which meant additional profits for the Serbian subsidiary of the Maltese company. However, the annual financial reports of the Serbian subsidiary were not available in the Serbian business register until the time of publication of this text.
The Serbian Prime Minister tells Nacional:
"I believe that everything was done in accordance with the procedures and that all obligations to the state of Serbia were paid on time."
She emphasized that Serbia has strict laws for transactions in foreign currencies and that all such loans are reported to the National Bank of Serbia. Crandall's lawyer explained that 200 thousand euros were spent on a technical feasibility and engineering study and that all financial structures were placed on the basis of both Serbian and Maltese tax advisors and that they were audited annually in accordance with international accounting and auditing standards. As the Maltese company had losses in 2015 and 2016, it did not pay profit tax. Investments in the Serbian company River Power Solutions flowed into Serbia from Luxembourg and Monaco through a Maltese intermediary company controlled by Cagnass and Crandall, who are also among the main owners of Ana Brnabić's former company Continental Wind Partners, attached to the tax haven in Delaware in the USA .
Much more money will probably go through Vetroelektrane Balkana, which is building the Čibuk 1 wind farm in Dolovo, Vojvodina. 57 wind turbines will be installed on 37 square kilometers, with a capacity of 158 Megawatts, which should power more than 110.000 homes. Construction began in July 2017, and completion is planned for 2019. The investment worth 300 million euros was financed by the International Finance Corporation (IFC), the private investment arm of the World Bank, and the European Bank for Reconstruction and Development (EBRD). IFC allocated EUR 130 million, and EBRD EUR 60 million in loans.
Both the IFC and the EBRD are required to conduct due diligence on the other party before approving any loans. According to the IFC report, the project is wholly owned by Vetroelektrane Balkana, and the electricity will be sold to the Serbian electricity supplier Elektroprivreda Srbije (EPS), under a twelve-year electricity purchase agreement. Before the decision of the IFC and EBRD creditors, in June 2017, the Serbian government amended the regulation on incentive measures for the production of electricity from renewable sources, which was adopted a year earlier. The IFC drafted four key decrees around the renewable energy market that the Serbian government accepted, and IFC advisors also contributed to the drafting of a "pioneering" agreement on the purchase of energy from the Chibuka wind farm.
According to the new rulebook, the Dolovo wind farm should be entitled to 130,8 million euros from EPS every three years – or up to 523,3 million euros over a 12-year period, if its wind turbines are efficient for at least a third of each year. If the wind farm exceeds the effective rate of 33 percent in that period, EPS will purchase additional electricity for 35 percent of the price of the calculation made by Nacional.
For years, Continental Wind lobbied for the promotion of renewable energy sources and more favorable legislation and regulation, and in the last two years, the former director of its Serbian subsidiary, Ana Brnabić, not only reached the position of Minister of State Administration, but eventually became Prime Minister, while at the same time new laws were approved and regulations in favor of the company. It was a big moment.
On October 16, 2017, Serbian President Vučić attended the presentation of the Continental Wind project worth 300 million euros. His attitude towards the project was more positive than two years earlier, when he made nasty comments about foreign investors in Serbian renewable energy. The Serbian Minister of Mining and Energy, Aleksandar Antić, announced during the presentation that this is "the largest private investment in Serbia".
The official owner of Vetroelektrana Balkana is the Serbian company Tesla Wind. Both companies are registered at the same address, Đure Jakšića 6/5, Belgrade, and Tesla Wind is 60 percent owned by Abu Dhabi Future Energy Company Pjsc (Masdar), a state-owned company of the United Arab Emirates, known for its favorable tax regime. According to the Serbian daily Danas, it was the United Arab Emirates that paid Tony Blair Associates, former British Prime Minister Tony Blair, to advise Serbia, including the establishment of the government's Unit for the Delivery of Results. The other 40 percent of Tesla Wind was owned by the Cypriot offshore subsidiary Cibuk Wind Holding Limited. In December 2017 and January 2018, Continental Wind sold 40 percent of its shares to Finnish renewable energy investor Taalieri Group and the German subsidiary of state-owned export bank DEG. The value of that sale remained unknown.
The key figure behind Continental Wind in Delaware is an experienced investor with partnerships in large multinational corporations. According to Bloomberg, Mark W Crandall, 59, co-founded Morgan Stanley's energy division in 1984 and later headed oil trading company Glencore's production and trading. After that, he was the co-founder of Trafigura, one of the largest trading and logistics companies in the world. Both Glencore and Trafigura, with headquarters in Switzerland, were intensively investigated by the British media due to business irregularities.
The companies they tried to investigate often succeeded in obtaining writing bans in the British courts. Crandall's official profile at another Balkan renewable energy company, Slovenia's GGE, shows that he began investing in renewable energy projects in 2005, before founding Continental Wind Partners in 2007, investing his own money in wind energy development in Poland and Romania. He later included external investments and in 2007 officially formed Continental Wind Partners LLC. He began his business career at American Airlines, which was then headed by his father, Robert “Bob” Crandall, a pioneer of innovation in the global travel industry.
As of 2014 at the latest, Crandall resided in Belgrade, but remained a US citizen and is required to pay income tax to the US Treasury. In an email sent by Continental Wind to Credence in December 2015, Crandall was also mentioned as a politically exposed person (PEP) under OECD rules from May 2014, when the sister of Marko's wife was appointed as a Serbian government minister. "This is without a doubt important to the Dolovo project in Serbia and CWP LCC has initiated procedures to ensure that this will not affect the Dolovo project," Continental Wind's lawyer added in that email.
Malta Files documents reveal that Continental Wind Partners, presented in the Serbian press and by the IFC as an "American company", operates almost exclusively in offshore companies with no employees. In the US, for example, they only have a post office box. There are 2711 other active companies with a registered address of 400 Centerville Road, Suite 19808, Wilmington, Delaware 385. There is no prominent phone number on their official website where Continental Wind can be contacted. According to CWP's 2009 operating agreement, "the primary purpose of the company is to acquire, manage and dispose, directly or indirectly, of interests, entities and projects related to the development of wind energy system projects from startup to the acquisition of building permits and other project documentation" in the Eastern Europe and Australia.
Today, Continental Wind Partner's operations are managed from Bulgaria, but they have successfully developed and sold several wind farms throughout Eastern Europe and Australia. Crandall's lawyer explained to Nacional that a Maltese or Cypriot holding company allows investors to start developing various projects in different countries under one holding company. He says that such a structure allows investors to direct their investments towards promising projects, which would not be possible without such holding companies. He states that all corporate structures are tax transparent, and that the profit goes to the ultimate investor and is taxed according to the resident jurisdiction of that investor. He added that CWP is a Delaware limited liability company, a tax transparent company, whose profits are paid to its members and taxed as their personal income.
Alex Cobham, chief executive of the UK-based Tax Justice Network, an international mediation group in the field of international tax evasion and avoidance, said it was a deeply troubling story of financial fraud, hidden ownership and the dangerous intermingling of public and private interests. That story confirms the importance of key transparency policies, in order to protect the public from the risks of corruption and misuse of tax policy.
"First, it is of crucial importance that we have public registers of ultimate beneficial owners of companies, mutual funds and foundations. Such a measure, which the EU now requires through the revised Anti-Money Laundering Directive, is the new international standard. In this regard, governments should only allow businesses in their countries that disclose all beneficial ownership information and their accounts. In addition, politicians and senior civil servants must disclose information about their assets to avoid potential conflicts of interest. Second, this case makes clear that all government contracts must be in the public domain. There can be no good reason for the public not to see how the people's elected representatives spend their money, and that logic applies equally to subsidies and tax incentives. The importance of incentives for the global transition to renewable energy makes the industry extremely important and likely to attract unscrupulous operators with no real interest in sustainable development," said Cobham.
He added that this story sheds light on the shocking failures of the IFC, the World Bank and the EBRD: "These are institutions that claim to invest in the public good, but persistently refuse to ensure financial transparency or appropriate tax regulation of their projects - and so they once again face the risks of corruption and tax abuse. Their political choice to accept financial secrets regardless of public damage is shameful," added Cobham.
Since the former wind energy lobbyist and local director of Continental Wind Ana Brnabić gained the highest political power in the country, all legal and regulatory obstacles for the largest private investment in Serbia have disappeared. But after the conclusion of the multimillion-dollar investment by the IFC, EBRD and the United Arab Emirates in the largest wind farm in Serbia, poor Serbian households could pay more expensive electricity bills, given the guaranteed high prices of electricity from wind farms as part of state incentive measures.
No one owns the wind, but wind farm owners, who are allowed to build in the best locations, mostly with significant help from local governments, can expect regular and high wind revenues over years and decades. Or they can expect big profits from the sale of wind turbines in prestigious locations, which happened in the Serbian case. That's why the renewable energy business has become similar to the mining and oil industry, with lots of lobbying, government initiatives and offshore operations. As a former oil and strategic resources trader at Glencore and Trafigura, Mark W Crandall is probably well aware of this.
Brnabić: I was not involved in the creation of the ownership structure outside of Serbia and I have no idea what it looks like
One of the answers that the Prime Minister of Serbia, Ana Brnabić, especially wanted to emphasize, is that when she joined the Serbian government, she resigned from the company Continental Wind Serbia, SEWEA and all other positions.
"I reported to the anti-corruption agency that I was the director of the CWS and that I do not want to have any influence on decisions that generally relate to the policy of renewable energy sources in Serbia. As the minister of state administration and local self-government, I was certainly not involved and had no points of contact with the legislation on renewable energy sources", the Prime Minister of Serbia wrote in her answer.
"Personally, I was not involved in the writing and acceptance of the decree on state incentives because I was not in the government during that period, but represented an investor," added Ana Brnabić.
She is also satisfied with the Čibuk wind farm project and wrote that "all taxes have been paid to the Republic of Serbia and that they have always strived to be a socially responsible company, which is confirmed by numerous donations and contracts with the local community and the fact that part of the company's profit is directly paid into the budgets of local community".
Ana Brnabić answered the question about the offshore structure of Continental Wind Partners:
"I was not involved in the creation of the ownership structure outside of Serbia and I have no idea what it looks like."
She did not answer the question of her personal and political attitude towards companies that are registered in tax havens in order to hide the ownership structure and to avoid paying taxes. The President of Serbia, Aleksandar Vučić, did not answer the questions that were put to him through his cabinet. Bulgarian citizen Dimitar Enchev, managing partner in the Luxembourg company Postscriptum Ventures, confirmed that Valeo Group from the British Virgin Islands is, among other things, the owner of the Luxembourg company, but he neither confirmed nor denied that he is the owner of Valeo Groupe.
"The other information you seem to have about the ownership structure and our investors is incorrect," he added and confirmed that the company Postscriptum Ventures received the payment after the sale of the Sapphire wind farm, but also stated that these funds were reinvested in other investments.
"PSVS has not had any turnover since its establishment, and the only tax payment was in Luxembourg. PSVS is subject to the Luxembourg tax system, and its owners fall under jurisdiction depending on their place of residence. When I receive a certain profit of the company after the distribution, I will pay tax in Bulgaria, that is, I will be subject to income tax, which in Bulgaria amounts to 10 percent", explained Enchev.
Angelov did not answer our questions, while CWP lawyers answered on behalf of Đurić and Petrović. The two are no longer employees of the company, and during their work they responded to the management of various companies in which they provided consulting services and performed the tasks assigned to them. To questions about due diligence before approving loans for the Chibuk wind farm and whether Continental Wind Partners' companies in Cyprus, Malta, the British Virgin Islands, Luxembourg, Guernsey, Monaco, the US state of Delaware and Singapore, where they do not have any wind farms, are legitimate or established as to avoid paying taxes, IFC spokesman Frederick Jones gave the following response:
"IFC, a member of the World Bank Group, and the EBRD approved in October 2017 a loan package of 215 million euros for the development of the largest wind farm in the Western Balkans, Cibuk 1. The project will help Serbia to start producing energy from renewable sources and to improve its energy diversity. (Serbia produces 70 percent of its electricity from old coal-fired power plants and is among the largest emitters of greenhouse gases in Europe.) As with other IFC-financed projects, detailed due diligence was undertaken on this project, which included the legal use of intermediary jurisdiction. , which ensures that all IFC investment criteria have been met. The sponsors of the Cibuk 1 wind farm are: Abu Dhabi Future Company Masdar from the United Arab Emirates, Taaleri Tesla KY from Finland and DEG, Deutsche Investitions – und Entwicklungsgesellschaft mbH from Germany. Continental Wind Group it was one of the companies that initially developed this project, but in the meantime sold its share and is no longer one of the investors in the project." We did not receive any answers to similar questions that were put to the IFC from the EBRD.
A Luxembourg shell company with owners in the British Virgin Islands, Monaco and Singapore
The documents reveal that CWP majority owner Mark W Crandall operates mostly in tax havens. In 2015, he owned 61,75 percent of the Luxembourg company Postscriptum Ventures Sarl through Postscriptum Ventures Ltd, registered in the British Virgin Islands.
In November 2015, that Luxembourg company took over the Maltese River Power Solutions, which owned a Serbian daughter company. In addition, by the end of 2016, the Luxembourg company Postscriptum Ventures owned shares of Silverline Recycling in the USA, then shares of GGE (Netherlands), International Power Supply (Bulgaria), APRL Resolution Trust and Continental Wind Partners LLC in Delaware (USA ). As of September 2015, at least 25 percent of Delaware's main shell company was controlled by Crandall.
Postscriptum Ventures was founded in July 2015 and has no employees. That year, the company had 3,7 million euros in assets and ended the year with a loss of 182.000 euros. But in 2016, the assets increased significantly to 12 million euros, and the profit reached 2,6 million. Despite this, taxes on that profit paid in Luxembourg were 6420 euros, or 0,24 percent, according to annual financial reports. In addition to Crandall, from the shell company BVI Postscriptum Ventures Ltd., the partners in Luxembourg in October 2015 were Fabrizio Cagnasso of Monaco's SCP Windream with 14,25 percent and Bulgarian businessman Dimitar Enchev with 9,5 percent. Enche's shares were hidden behind the Valeo Group in the British Virgin Islands. An equally large share (9,5 percent) was owned by Evgenij Angelov, the former economic adviser to the Bulgarian president and former deputy Bulgarian minister of economy.
Angelo's shares were owned by the BVI company Ammanno Limited, and in addition he was previously the chairman of the board of the Bulgarian National Electricity Company. However, Continental Wind failed to develop large projects in Bulgaria. The company claims that "due to a series of restrictive changes in the law and unfavorable economic conditions for the development of wind energy" it stopped the project of building a wind power plant in Milovci with a capacity of 200 MW. An investment in a Croatian wind farm of 120 MW in Udbina also failed.
Continental Wind intended to build the largest wind farm in Croatia with 2011 turbines in 60, but withdrew two years later. In neighboring Romania, Continental Wind had more success. It installed the 600 MW Fantanele-Cogealac wind farm in the town of Dobrogea in southeastern Romania. In 2008, the "Americans" sold the project to the Czech energy company ČEZ, which invested 1,1 billion euros in what it called "the largest coastal wind farm in Europe."
The remaining five percent of the Luxembourg company Postscriptum Ventures was held by Alex Hewitt behind Future Blue International in Singapore, a popular tax haven. Australian-British national Hewitt is one of Continental Wind's directors and is responsible for its wind farm investments in Australia, where it has a portfolio of 12 projects. It was the Australian wind farm that contributed to the high profits of Continental Wind Partners' shareholders in 2016 that passed through Malta.
Crandall and his partners own another Maltese company Asia Pacific Renewables Limited, formerly CWP Australia Holding which owns twelve wind farms. In 2016, Asia Pacific Renewables Limited sold Sapphire, the second largest wind farm in New South Wales, for €19,5 million. After paying "bonus costs" of two million euros, these revenues significantly contributed to the 17,1 million euros of profit of the Maltese company in 2016. Since the profit from that sale was treated as exempt income, the company paid zero tax in Malta.
Crandall's lawyers explained that these "extra costs" were paid to many of the project's development participants who agreed to work for no or reduced pay in exchange for bonus payments after the project was completed. Crandall also has two trusts, one in Guernsey and the other in Malta. Typically, a trust can be used to determine how to manage a person's money and distribute it while that person is alive or after their death. The foundation structure can also help aggressively manage tax liabilities or even avoid them. It can also protect assets from creditors and determine the terms of inheritance for beneficiaries.
More precisely, a mutual foundation is a contract between two parties for the benefit of a third party, i.e. the person who puts the assets under management of the foundation, the trustee who manages the foundation for that person and the beneficiary. The first trust – the Crandall Family Trust – was established in 2006 under the laws of Guernsey and is the 2014% beneficial owner of Postscriptum Ventures Ltd. from the British Virgin Islands, through which Crandall mainly operates his wind farm empire. The documents provided to Nacional prove that the foundation is the actual beneficiary, and were signed by representatives of two other companies from the British Virgin Islands, Cosign Services Limited and Spread Services Limited, which serve as nominal shareholders of Postscriptum Ventures Ltd. Mark W. Crandall is both a grantor and a beneficiary of that foundation. In XNUMX, his wife Lidija Udovički was added to the list of beneficiaries of the Crandall Family Trust.
Crandall's lawyers explained that the trust was set up so that Crandall would pay inheritance tax in the US, not the UK, and that both the BVI and Luxembourg companies owned by the trust were ''available'' to the US Treasury which they pay taxes. However, in December 2015, another Maltese foundation was established – the APRL Resolution Trust, which is managed as a trustee by Credence Corporate and Advisory. According to the proposed statutory declaration of trust, the initial assets consist of transferred assets in the form of 2980 shares of Asia Pacific Renewables Limited and shareholder loans of €16,5 million transferred from Delaware Continental Wind Partners LLC to the newly established Maltese trust and all its beneficiaries . Australian wind farms are the foundation's main asset.
L. Burke Files, an international financial investigator based in Arizona, after analyzing some of the documents, explained that the purpose of that foundation, a short-term foundation with a term of less than three years for US tax reasons, is to liquidate assets for the benefit of beneficiaries.
"Such an irrevocable foundation creates a structure for the collection and management of funds that are exempt from possible legal procedures of either grantor, trustee or beneficiary. In most cases, the property is beyond the reach of all creditors," he said, adding that the real beneficiary of the property could be hidden.
And that is a feature that obscures, that is, hides real ownership and control. It is a well-designed mutual fund that is tax neutral, meaning that profits will go directly to each beneficiary without tax consequences. This leaves each user to take care of their tax obligations in their home country.
“At best, if we're being honest, it's tax deferral and can redirect the distribution to a much lower interest rate asset class. Over time, tax will have to be paid where there is a real gain, in this case when the first payments from the wind farms are channeled through the foundation to the real beneficiaries. In the worst case, they can be used as a very effective means of reducing tax liabilities," explained Files.
Files also questions the quality of IFC's and EBRD's due diligence process, i.e. in-depth recording and control of companies before approving a loan for a wind farm project in Serbia.
"At first it seems that IFC and EBRD would be punished if they were commercial banks, and high-ranking officials would be fired. But since the inert and sleeping bureaucrats have not exposed their skin, nothing will happen," he added. Crandall's lawyers explained that the trust was set up to separate Australian assets from the Dolo. "The APRL Resolution Fund will not profit from the sale of Dolov, and every real owner of this foundation has been reporting taxes to the administration to which it belongs by place of residence and will continue with this practice in the future," the lawyers concluded.
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