December 9, 2023

Bidders for NSW’s land titles registry linked to tax havens [Cayman Islands], ASIC documents reveal

By Esther Han From The Sydney Morning Herald

Why the Land Titles Registry matters
The Baird government is close to selling off NSW’s “world-class” land titles registry – here’s why that’s a big deal.
A Fairfax Media investigation has found that behind the newly created companies that may house Land and Property Information (LPI) are an array of foreign players, a mysterious trustee, and business links to tax havens, such as Bermuda, Cayman Islands and Isle of Man.

The Berejiklian government is expected to announce this week the consortium that has won the right to operate LPI – a monopoly provider of essential titling and registry services – for the next 35 years. LPI generates $190 million in revenue and $130 million in profit each year.

ASIC documents show on March 7 private equity giant The Carlyle Group registered two companies called “Elares Finance” and “Elares Employee”. They are likely to run LPI.

They are both 100 per cent owned by Elares Partners, which is owned by Carlyle Global Infrastructure Opportunity Fund, whose address is 27 Hospital Road in George Town, Cayman Islands – a tax haven in the western Carribean Sea.

The sole director of the three Elares companies is Richard Hoskins, who left rival bidder Hastings Funds Management mid-last year to become a managing director at the Carlyle Group.

At Hastings, Mr Hoskins played a key role in its consortium’s successful $10.3 billion bid for NSW’s TransGrid. It has since come to light that two of its five shareholders are based in the Cayman Islands.

A Carlyle spokesman said “it expects to pay Australian tax on Australian investments” like other companies.

“Global investors use Cayman Islands to make sure they don’t pay double or even triple tax on their investments in collective investment vehicles,” the spokesman said.

“These vehicles are widely accepted by tax authorities around the world because they are tax neutral [and] Australia has a tax information sharing arrangement with the Cayman Islands.”

Revenue raised by the privatisation will go to Restart NSW and is earmarked for sport stadium redevelopment.

The government is pushing ahead, despite protests from lawyers, real estate agents and surveyors who claim a for-profit operator would compromise the integrity of the state’s Torrens land title system, which underpins billions in economic activity each year.

In his second reading of Labor’s new bill to repeal the legislation allowing the LPI transaction last week, finance spokesman Clayton Barr raised concerns about tax haven links. The bill is waiting to be debated.

“It is unthinkable that a state government in Australia would consider entering into a sale process that supports tax evasion,” he said.

London calling

Westpac-owned Hastings and First State Super have teamed up to create “Australian Registry Holdings”. They registered the entity in Victoria on March 16.

Hasting’s Andrew Faber and First State’s Mark Hector are listed as its two directors.

However, the joint venture is 100 per cent-owned through RBS Pension Trustee Limited in London – suggesting LPI profits may make their way to the UK before being distributed to the joint venture partners.

Hastings did not respond to a request for comment.

Northern lights

The third syndicate – comprised of Canadian infrastructure giant Borealis and stock transfer company Computershare – registered “Aurora Holding 1” in Victoria on March 22.

ASX-listed Computershare owns half through two new companies – registered on March 10 and March 21. It did not respond to a request for comment.

Its annual report shows it controls entities in secrecy jurisdictions, including Guernsey, Isle of Man and Jersey.

It also has business ties to Bermuda, British Virgin Islands and Cayman Islands.

The new link

Link Group and Macquarie Group’s Macquarie Infrastructure and Real Assets (MIRA) form the fourth bidding group.

ASX-listed Link registered “Link Land Registry Services” in NSW on March 23 – one week before final bids were due.

The pair created and own “Autumn Finance”. Link would not reveal the entity’s purpose or provide a comment.

Macquarie is known for its tax minimisation strategies. It sent an unsolicited scoping study about privatising LPI to the Labor government in 2009.

A spokesman for Treasurer Dominic Perrottet said that prior to submitting binding bids, all consortia were required to seek clearance from Commonwealth bodies including Foreign Investment Review Board, Australian Competition and Consumer Commission and the Australian Tax Office.

“The NSW Government will not proceed with any transaction unless and until the necessary clearances from Commonwealth agencies have been received,” he said.

This week, Labor will attempt to win the support of Reverend Fred Nile’s Christian Democrats so it can push its repeal bill through the Upper House.

“The majority of the potential buyers of our land titles registry are companies that will happily wipe their hands and walk away at the first sniff of trouble or as soon as their profits are no longer protected,” Mr Barr said.

LPI keeps the official record of land ownership and supports the proper functioning of the property market. Titles define legal ownership and boundaries of each parcel of land and are integral to buying and selling property, as well as taking out and paying off mortgages, leasing and inheriting property.


If NSW’s land titles registry goes to the Carlyle Group, its profits could end up in the Cayman Islands. Photo: Getty Images

Richard Hoskins is a Managing Director at the Carlyle Group, a bidder for Land and Property Information NSW. Photo: The Carlyle Group

Protesters in front of NSW Parliament House demonstrating against the NSW Government’s privatisation of the Land Titles Registry Photo: Kate Geraghty

Treasurer Dominic Perrottet, with Premier Gladys Berejiklian, is spearheading the privatisation of Land and Property Information. Photo: Wolter Peeters

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