Former Bula chief set up multiple offshore companies

A Dublin solicitor vouched for the character of controversial Irish businessman James Stanley when he set up an offshore company using the services of the Mossack Fonseca (MF) group in 2007.

Stanley featured in a 1998 report by an authorised officer, barrister Lyndon MacCann, into a Dublin plc called Bula Resources. He found that Stanley – who was the plc's chief executive – had at all times controlled a British Virgin Islands company to which Bula shares worth £2.5 million were transferred.

Stanley had told the board of Bula Resources plc in 1995 that the share transfer to Mir Oil Development Trading Ltd was part of a transaction whereby Bula would get an interest in a Siberian oil field from its Russian owner.

In the wake of the deal, when concerns emerged about seemingly false well reports, Stanley resigned and moved abroad. Trading in Bula’s shares was suspended but not before shares worth £660,000 had been offloaded by Mir. MacCann was appointed in October 1997 and began to investigate.

The leaked Panama papers which were obtained from MF, a Panama-based law firm that helps to set up hard-to-trace corporate structures for clients, show that Mir Oil Development Trading was incorporated by MF at the request of Sue Neil of Chamonix Corporate Services, Jersey, in 1994. Neil was acting on behalf of an undisclosed client.

At one stage during the McCann investigation, the files show, Neil became concerned that unidentified parties were trying to find out who really controlled Mir, and insisted that in future the password “Gazebo” would be used in all dealings relating to the firm.

The files show that, in December 1995, a man had called the MF office saying he was James Stanley and, as the Chamonix accounting department chief, he wanted to see copies of certain invoices. Neil said Stanley had not contacted MF and, in a fax to MF employee Edmund Ward, said: “Wouldn’t you know that these little weasels would telephone... If they call again, please be as rude to them as you wish.” It is not disclosed who she is referring to.

In November 1997, just 10 days after his appointment, MacCann contacted MF in the British Virgin Islands, explained who he was and why he was appointed, and asked certain questions. Eight months later he issued his report finding that Stanley had at all times controlled Mir. The report was forwarded to the Garda Fraud Bureau.

Stanley, who had moved to Moscow and had refused to meet MacCann, contested the report’s findings, and was represented in the Irish courts by solicitor Giles J Kennedy, of Dublin, who later wrote the reference to MF for Stanley mentioned above. During the court case, which was eventually settled, documents were served on Mir at the MF offices in the British Virgin Islands.

In November 2007 Kennedy wrote to the MF office in England in relation to Avicenna Resources Ltd, of British Anguilla, of which Stanley was to be the sole shareholder.

He said his firm had acted for Stanley for “upwards on 30 years both in a business and personal capacity, and that Stanley was known to the law firm as “a person of honest character and integrity” who was a fit person to be a director of Avicenna.

Kennedy told The Irish Times that Stanley had never been restricted in any way from acting as a company director, in this jurisdiction or anywhere else.

“That is the criteria I would apply. Jim Stanley is a person of good standing in Ireland.”

The leaked files show that in 2008 Stanley set up another two companies in British Anguilla, called Everleigh Holdings and Hamton International, again using MF.

The businessman wrote to MF saying he would indemnify it for providing nominee directors to act for the companies. He also established a British Virgin Islands company, Kilnside Ltd, and was granted power of attorney to act on behalf of the company. It is not clear what use, of any, he made of the companies.

The MF client in relation to the companies is listed in the leaked files as "James Stanley/ Brendan Stanley, " with Brendan the son of the former plc chief executive. They are also the client in relation to a Panamanian trust, Bastian Holdings Foundation, set up in 2008 to hold the shares in Everleigh, Hamton and Kilnside. The trust's beneficiaries are Stanley, and should he die his son, and should Brendan die, a related party. It appears Bastian was dissolved a few years after its establishment.

One of the facts that emerged from the MacCann report was that Bula, which had agreed to transfer shares to Mir, even though it was unclear who owned Mir, was at the time paying Stanley’s wages to a Panamanian company called Ore Consultants SA, which used the Chamonix address in Jersey.

The leaked files show that Ore Consultants was established by MF and that, in November 1998, its shares were transferred from a nominee company to Stanley and his then partner, Mary Kieran.

They also show that a British Virgin Islands company through which a very attractive Co Kilkenny hunting lodge on the banks of the River Nore, Brownsbarn House, was held, was established by MF.

Stanley bought the property for £235,000 in 1989 and transferred ownership to the BVI company River Properties Ltd. Chamonix provided administrative services.

Kieran lived in the house after Stanley moved to Russia. Stanley and Kieran later went to court over who owned the house, with Kieran contesting Stanley’s claim that the shares in the BVI company were held by her in trust for him. Stanley lost in the High Court in 2007, but was successful in his appeal to the Supreme Court.

Efforts to contact Stanley were not successful. Neil, contacted in Jersey, said MF was simply a law firm that set up companies in Panama and elsewhere when requested. She said she would have been “exceedingly surprised” if MF had known what was going on in relation to Mir Oil and the Siberian oil field. She had not known what was going on, she said.

Asked if there was not an issue concerning offshore companies and transparency, she said that “Ireland was pretty out there” when it came to such matters. She had not heard from Stanley for years, she said.

MF, in its response to the Panama Papers leak, has said it provides worldwide registered agent services for professional clients.

“As a registered agent we merely help incorporate companies, and before we agree to work with a client in any way we conduct a thorough due-diligence process, one that in every case meets and quite often exceeds all relevant local rules, regulations and standards to which we and others are bound.”