The Panama Papers and a school near you? The Case of Bellevue Education Group Ltd, Bellevue Place Educational Trust (BPET), Mossack Fonseca, Whitehall Park School and other free schools

David Barry's picture
 8

Readers of this blog will  have  heard of the "Panama Papers." This huge leak of documents from the Panama law firm Mossach Fonseca has disclosed a world of off shore companies, international money flows and concealed identities.   One use for these arrangements is to enable  tax evasion and money laundering.

The disclosures have so far resulted in the resignation of the Prime Minister of Iceland, and the Prime Minister of Malta is having to consider sacking two of his close ministerial allies as well as facing demands for his own resignation at public demonstrations lead by the parliamentary opposition. In Russia, President Putin has called the disclosures anti Russian propaganda. In China there are some embarrassed (and possibly worried) members of the Politburo.

Here, the revelation that David Cameron's father ran a business established on advice from Mossack Fonseca, from which (not surprisingly) his son benefited,  has cast a shadow over the Prime Minister which has led to him issuing five statements over the last week  seeking to clarify his financial affairs. In effect the Prime Minister, while insisting that his father did nothing wrong and that he did nothing wrong, has conceded that it "looks bad." Which is why he, after what he has admitted was not a good start and a "bad week",  has decided that to regain public confidence he has to submit to an unusual level of disclosure regarding his financial affairs.

But what is this to do with  the Local Schools Network? Well LSN  is about local schools, and my story is not about Prime Ministers, but local schools amongst others the school at the end of my road - Whitehall Park School.

The story  begins with a web site called "Sarawak Report" This is run by a journalist called Clare Rewcastle Brown, formally of the BBC World Service  whose Wikipedia entry is here.

SARAWAK REPORT

Ms Rewcastle Brown, originally from Sarawak,  has reported on a number of financial scandals in Malaysia , in particular, and recently, on a scandal related to a company called 1Malaysia Development Berhad (1MDB). This is a strategic development company, wholly owned by the Government of Malaysia. There have been a number of allegations made against this company, to the effect that money given to the company by the Malaysian Government, some of which, in turn originated from development aid, was improperly channelled into private hands.

If you have the stamina there is more information on wikipedia here.

FOLLOW THE MONEY

Ms Rewcastle Brown now claims that following the Panama papers disclosure she can see where at least some of the money has gone.  She wrote about this on Sarawak Report. The full text is  here.   The report states:

"One of the clients of the off-shore incorporations firm Mossack Fonseca, exposed in the so-called Panama Papers this week, was PetroSaudi’s Tarek Obaid."

"Using a web of off-shore vehicles, he and fellow director Patrick Mahony secretly invested some of the millions they obtained in illegal backhanders from Malaysia’s Development fund in a private education company..."

"...Documents acquired by Sarawak Report reveal that the two men are the secret funders behind the self proclaimed entrepreneur, Marwan Naja, who acts as Chairman of Bellevue Education, a fast growing business, which has acquired 12 lucrative schools since 2010..."

.".....Bellevue Education Group...is officially run from Geneva...... the business is primarily owned by two vehicles named Plato One and Plato Two based in Hong Kong, which are in turn controlled by Mahony together with an off-shore company owned by Obaid called Maplehill Property Limited (BVI)."

"In the course of setting up the complex ownership structure in 2010 Marwan (who has just one share) reported he had:"

     'taken specific tax advice from a firm of internationally recognised accountants which has confirmed to him in writing that no Tax will be payable.. as a result of any dividends, distributions or other returns..whether during the Investment or following an exit from the Investment.'”

Yes, it is the SAME Bellevue, the Bellevue that, together with Place Group, operating through a Multi Academy Trust called BPET,  proudly announce on their website:  

"Bellevue Place is a new model for education delivery in the state sector. The Trust is a joint venture between two organisations who are passionate about providing high quality education provision. They bring together the very best of the fee-paying Independent sector – Bellevue Education Ltd – experienced in running 15 independent schools in the UK and Switzerland; with a highly-regarded education consultancy – Place Group – with experience in the state sector for efficiency of supply in setting up new schools and converting academies, along with driving value for money and compliance."

THE SUNDAY TIMES JOINS IN

Ms Rewcastle Brown is not the only reporter to have spotted this connection.  On the 10 April a story with the headline;

"Saudi oil tycoon revealed as investor in schools company" appeared in the Sunday Times and went on to say:

"A SAUDI oil tycoon is the joint owner of an education company involved in running some of Britain’s state schools, with his interest held by a British Virgin Islands (BVI) company formed by the law firm Mossack Fonseca."

"The Sunday Times can reveal that Tarek Obaid, the founder of Anglo-Saudi oil company PetroSaudi, is one of the key investors in Bellevue Education, in Hampton Court, Surrey."

"The company’s website says: “Bellevue Education operates seven primary free schools across London and the southeast through a joint venture.”  It helps operate the schools in a charitable venture called the Bellevue Place Education Trust (BPET), in east London."

"The biggest shareholder is Obaid via a BVI company called Maplehill Property, which was formed by Mossack Fonseca......"

"PetroSaudi has been caught up in a money laundering investigation after a deal with a Malaysian fund called 1MDB. Fund officials are under investigation, but not the oil firm itself."

The full article can be found here.   It is  behind a paywall, and so I have quoted from it selectively for copyright reasons.

At time of writing Bellevue Education Group Ltd have not made any response that I know of.   (If they are reading this they are welcome to send one to me care of this site)

But Bellevue Place Educational Trust have. Odd really, if they are truly separate bodies - it was Bellevue Education that the Sunday Times contacted and asked for comments.   BPET posted their response on their website also  on the 10 April.  Clearly a busy weekend.

Here is the complete text of their response to the Sunday Times.

BELLEVUE PLACE RESPONSE

"In response to the recently published Sunday Times article Bellevue Place Education Trust wishes to be very clear that the Bellevue shareholder who made an investment in Bellevue Education via a company registered by Mossack Fonseca in the British Virgin Islands has no connection with the Trust.

Bellevue Place Education Trust is a not for profit charitable trust set up with the sole intention to establish and maintain high performing schools in and around London.  The Trust was established by two parties, Bellevue Education and Place Group.  The Trust’s governance structure is clear as to the structure and who the members and trustees are.

Below for transparency, is our statement we sent to the Sunday Times.  We have made it very clear that Bellevue Place Education Trust is a not for profit charity that was approved by the Department for Education to manage and maintain state funded free schools.  The Trust is a separate, independent organisation from Bellevue Education that is solely focused on offering high quality education provision to its pupils.  We have some fantastic staff and governors who are supporting the delivery of this vision and we aim to see off these allegations as promptly as possible, enabling us to focus on our core purpose.

Below is the statement we have issued we have also included the Department for Education’s clear statement.

Statement from Bellevue Place Education Trust sent to Sunday Times:

“Bellevue Place Education Trust is a multi-academy Trust, sponsoring seven primary Free Schools across London and the South-East. The Trust’s core purpose and responsibility is to establish, maintain and manage state funded Free Schools.  All Bellevue Place Education Trust schools are focused to deliver high quality education provision in areas where there is a shortage of primary school places.”

“Bellevue Place Education Trust is an independent charitable organisation, with six trustees, of which one is Mark Malley.  Trustees delegate responsibility to a Local Governing Body for each school, who appoint all staff (except the Headteacher), set the schools budget and ensure the curriculum meets the needs of the pupils, in line with the vision of the Trust.”

“In applying to be a Free School promoter, the Trust undertook stringent due diligence and was approved by the Department for Education and Charity Commission.”

A DfE spokesperson:

“We demand the highest moral and professional standards from anyone involved in educating our children and, in common with every free school proposal, Bellevue Place Educational Trust (BPET) was subject to detailed scrutiny. We are clear that no-one will be handed control of a school unless we are entirely happy with the result of the checks.

“Bellevue Education and BPET are separate organisations. Our records show the individual named is not in any way involved in the governance of BTEP schools. There are strict rules that prevent free schools and academies being run as for-profit organisations.

“These include due diligence checks, credit checks, and enhanced Disclosure and Barring Service (formerly Criminal Records Bureau) checks and may include police and other checks necessary to ensure the suitability of people to be part of the free school programme.  As part of those checks, we would look at an individual’s association with other people or organisations.”

END OF BELLEVUE PLACE RESPONSE

This story to be continued.......

(The Free Schools run by Bellevue Place are Rutherford House School, Braywick Court School, Whitehall Park Primary School, Kilburn Grange School, Halley House School, Deer Park School, and  Watling Park School.)


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Comments

janee's picture
Thu, 14/04/2016 - 10:03

Interesting that Mark Greatrex is Chief Executive, given his links with E-Act (formerly Edutrust) which has quite a history. The Bellevue Education seems to have moved around a lot from one registered office to another and to another.... https://beta.companieshouse.gov.uk/company/07956784/filing-history?page=1


David Barry's picture
Fri, 15/04/2016 - 00:17

Worth having a look at this blog post and the comments threon. Makes interesting reading in view of the news about Bellevue.

 

https://disidealist.wordpress.com/2016/03/20/the-mysterious-case-of-the-...


Parent2's picture
Sat, 16/04/2016 - 10:38

What are the implications of an academy trust having a 'charge' on a property? Is this like a mortgage to the DfE? Or a lease? In Richmond the Education Funding Agency bought a building for a BPET free school that was in the wrong place for many reasons. Now a different plan has emerged for it to share a building with Lidl - at least in the original point if need. What happens to the redundant building?

https://beta.companieshouse.gov.uk/company/07956784/charges/0brnZ3sXmp3_...


Janet Downs's picture
Sat, 16/04/2016 - 12:30

They're not exactly mortgages.   The DfE told me in a response to my FoI request re the charge on Cuckoo Hall: 'You may find it helpful to know that the outstanding mortgage you have referred to in your request is not a loan, it is known as a legal charge placed on the land. A legal charge is routinely taken over land purchased by the Secretary of State (SoS) for Free School Trusts, in order to protect the expenditure on the school site.'

This 'charge' often refers to purchase of freehold land.  I assume that means the title for the freehold land goes to the academy trust (together with any increase in value of the land).  However, I'm not a legal expert.   The academy trust can't dispose of any land (at the moment, anyway) without permission from the Secretary of State (although that could change, of course).

 


Janet Downs's picture
Fri, 22/04/2016 - 10:29

Schools Week has followed up on this story.


Janet Downs's picture
Fri, 22/04/2016 - 16:01

The NUT has demanded at inquiry into how an “offshore company exposed in the Panama Papers has been allowed to play an influential role in a multi-academy trust running seven state-funded free schools”.   See Update on Schools Week article linked above. 


David Barry's picture
Fri, 22/04/2016 - 17:17

And here is the text of the NUT press release.

 

IMMEDIATE

 

22 April 2016

 

Panama Papers reveal free school provider  linked to offshore company.

 

The NUT is today demanding  an inquiry into how a business running private schools  linked to an offshore company  exposed in the Panama Papers has been allowed to play an influential role in a multi-academy trust running seven state-funded free schools in London and the south east.

 

The Union has published a dossier which challenges the statements made by Bellevue Place Education Trust (BPET), which runs the free schools, and the DfE,  which provides it with state funds to do so.

 

Both statements deny the company at the centre of serious allegations involving tax avoidance and money laundering, Bellevue Education, is directly linked to the free school provider, claiming they are separate organisations. The NUT dossier provides clear evidence of the substantial links between the companies and organisations at issue.

 

Commenting on the findings, Christine Blower, General Secretary of the National Union of Teachers, the largest teachers’ union, said:  

 

The Secretary of State for Education has serious questions to answer as to why the DfE and the Education Funding Agency have allowed a company which is alleged to be at the centre of serious dubious financial practices to be so centrally involved in running state funded schools. What due diligence has been applied when approving BPET's applications to open free schools? Were the backgrounds of the two companies behind the academy trust - Bellevue and Place Group - scrutinised? If not, why not? "

 

“This case has far reaching implications because the Government intends to force all schools to join multi academy trusts. If it cannot oversee those that currently run around 5,000 academies and free schools in England - what confidence can we have that they can oversee the dealings of those MATs running all 20,000 schools in England?

 

“Parents are entitled to know that their children's schools are being run by legitimate organisations. There must be a full and frank inquiry into this matter with the findings made public at the earliest opportunity”.

 

END

pr092-2016

For further information contact the NUT Press Office on 0207 380 4706 or 07879 480 061.

 


David Barry's picture
Tue, 26/04/2016 - 09:22

An item in the Guardian today....

 



"Schools consultancy transparency needed

"Government rules state that academy trusts that buy services from companies run by someone who is a trustee of the academy chain must do so “at cost”, suggesting no profit is made. But what does this mean in practice?

Our interest was piqued after reading the 2015 accounts of an organisation that runs seven free schools, the London-based Bellevue Place Education Trust (BPET). It lists payments of £206,258 to enable a private consultancy called Place Group to set up four of those free schools in 2014-15.
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This is declared under “related party” payments in the accounts. However, it is not stated specifically that Claire Delaney, chair of trustees of BPET, is also managing director of Place Group, in which she holds a 22.5% shareholding stake, or that Simon Rule, Place Group’s chief executive, is another BPET trustee and also owns 22.5% of Place Group.

The BPET accounts say another company, Schools’ Buying Club, was selected to be the “procurement provider” – selecting which firms’ services should be bought by the trust – and that although there is no charge [to BPET] for Schools’ Buying Club’s work, “the successful provide [sic] is instead charged as a percentage of the overall contract”.

Delaney and Rule are directors of Schools’ Buying Club and both own 22.5% shares in the company. The relationship is not specified explicitly in BPET’s accounts.

A report 18 months ago for the Commons education select committee questioned what “at cost” actually meant and called for greater transparency. In this case, although the full contract details are not specified in BPET accounts, Place Group told us that both it and Schools’ Buying Club had complied fully with guidelines and both had actually made losses on BPET work.

Delaney said the contracts won by Place Group and Schools’ Buying Club had been subject to a formal tendering process, and that “directors who are related parties stepped away from any involvement” in that process. Both companies’ bids followed DfE guidance on what “at cost” meant, she said, and the DfE was fully aware of all relationships and related party transactions. Mark Greatrex, BPET chief executive, added that Place Group was one of five companies invited to tender for the free schools work and that having Place Group’s “outstanding” services available at cost had led to significant savings for BPET.

That all sounds like a good thing for the taxpayer, then. But perhaps it would be better if the DfE ensured fuller details were published in accounts to promote transparency."

 

http://www.theguardian.com/education/2016/apr/26/academy-chiefs-pay-brom...


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