HM Revenue & Customs has faced criticism after it declined a request from French authorities to search the London offices of British telecoms firm Lycamobile in connection with suspected money laundering, citing the company’s donations to the governing Conservative Party.
BuzzFeed obtained an email from HMRC to French officials in which a senior civil servant wrote: “They are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012.”
Initially, HMRC denied the authenticity of the email and issued a strongly worded statement: “This is the United Kingdom for God’s sake, not some third world banana republic where the organs of state are in hock to some sort of kleptocracy.”
The revenue authority later acknowledged the email was genuine and said that mentioning Lycamobile’s political connections was a mistake. HMRC maintains that the company’s political donations were not the reason for refusing the French request, and says its decision was based on the fact that the French authorities did not supply sufficient information to justify a raid.
Members of Parliament have responded sharply, accusing HMRC of “grubby corruption” and calling on Chancellor Philip Hammond to provide a full explanation.
Lycamobile was founded in 2006 by entrepreneur Allirajah Subaskaran and is headquartered near Canary Wharf in London. Subaskaran has been a prominent donor: he paid to join the Conservative Party’s Leader’s Group, an elite donors’ forum that provides private dining with the prime minister and cabinet ministers, and he supported Boris Johnson’s mayoral campaign.
In 2015, BuzzFeed published footage showing individuals linked to Lycamobile depositing rucksacks filled with cash at Post Office branches across London. Investigators and compliance experts said that large-scale cash deposits and the use of unarmoured transport can be warning signs for anti-money laundering and tax authorities.
Lycamobile described those deposits as routine banking activity. The footage also showed a G4S security van collecting numerous sacks at once. The company has not provided a clear explanation of why employees were transporting large amounts of cash to multiple Post Office locations when an armoured, audited service appeared available.
The company denies any involvement in money laundering. The Conservative Party has stated that it has not accepted donations from Lycamobile since 2016.
(Image Credit: “Theresa May – Caricature” by DonkeyHotey used under Attribution 2.0 Generic (CC BY 2.0) license.)
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