Tuesday, 30 July 2013 16:20

Otium Corporation – The Danger of Off-Shore Tax Haven Companies

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Otium Corporation Ltd have been making headlines for all the wrong reasons recently, particularly in a Daily Record report of how they left one aerospace contractor out of pocket by £9,000 after their payments to him simply stopped.

Stuart Jack was on a one-year contract to work at BAE Systems in Prestwick, but his payments did not come directly from BAE - instead, they went through Otium Corporation's Ltd’s service address in Batley, West Yorkshire.

 Mr Jack told the Daily Record that the agreed payments came at first, but that he had to chase several times over the course of the year, until eventually the money just stopped coming, leaving him down by about £9,000 on the agreed amount.

In the end, after receiving several of the usual excuses from Otium, Mr Jack wrote to the Daily Record's 'The Judge' column, which took up the case for him, but was still unable to get him his funds.

Split personalities

jail

Delve deeper into some of the details of Otium Corporation, and it soon becomes clear that they are a company of somewhat split personalities.

For a start, their very name - 'otium' - is a Latin word relating to the use of leisure time, a curious choice for a company dedicated to putting contractors into work.

The company's director of UK operations, Dr Shaun Roberts, appears to have previously been known in the UK as Shaun Lammas and, according to the records available at Companies House, is banned from acting as a company director until 2016.

In a LinkedIn profile claiming to belong to Dr Roberts, there are a large number of very generic previous job appointments - mainly describing themselves as 'interim' appointments, with no details of exactly where the position was held.

We're not even convinced of his 'Dr' title, as it appears to relate to a PhD studied for while Dr Roberts was already working full time.

All in all, it's an easily replicated LinkedIn profile with few verifiable facts included within it - and if Dr Roberts is indeed Shaun Robert Lammas, he should not be working as a company director in the UK.

Cross-border complications

If Otium Corporation and Dr Shaun Roberts already sound slippery, things get even worse for those who are owed money by them, as the 'Batley-based' company is actually registered in the Seychelles, a known tax haven and destination of choice for those seeking to hide their assets.  While its UK “address” actually turns out to be linked with a company of offshore consultants.

Within the UK, Shaun Robert Lammas previously served as a director of several short-lived recruitment companies, including M&DL Consultancy Ltd and Maries & Daughters Ltd, and has also been linked (through unconfirmed rumours) with External HR Ltd, which operated from a Manchester service-only address and was, in turn, associated with half a dozen more recruitment firms that have since been wound up or dissolved.

The offshore consultancy, meanwhile, specifically lists its services as including the ability to protect money from creditors - which we think translates as "don't pay people what you owe them" - and generally seems to exist solely to set up overseas shell companies in tax havens, to serve as a refuge for company and private assets that were previously held in the UK.

In Mr Jack's case, BAE have already paid in full to Otium Corporation, but if they choose not to pass those funds on to the contractor, it could be extremely difficult for anyone to get the money back if it is now held in an offshore bank account, by a Seychelles registered company.

Practical Recovery

The problem for any business dealing with a company registered in a tax haven is, how do you manage the risk?  Our solution is simple, do not do business with individuals or companies that chose to place themselves, their businesses and their liabilities outside of the reach of the courts and the tax man.

If you do chose to do business with a company registered in a tax haven, you had better hope they are on the level.  As if they aren’t you will find that you have almost no hope of recovering any funds and that your payment is entirely dependent on their goodwill.

Even if you take legal action in the country the company is allegedly domiciled in, you will likely find that the company exists on paper only and that the only funds are held in a secret bank account in yet another jurisdiction.

Note:  Otium Corporation should not be confused with any other companies with a similar name. Similarly please do not confuse this Dr Shaun Roberts or Shaun Robert Lammas with any other similarly named individuals.

Update January 2015

On the 26th of January 2015 Shaun Robert Lammas was convicted at Manchester Minshull Court of the following offences:

  • One count of Fraudulent Trading for which he received a two year custodial sentence
  • Two counts of being involved in the formation of a company whilst disqualified for which he received two six month custodial sentences to be served concurrently.
  • In addition he was also banned as a director, again, for a further twelve years with his disqualification due to expire on the 27th of January 2027.

We are sure Mr Lammas will have a great deal of time to reflect on his conduct.

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