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| Nick and Christian Candy accused of tax evasion in high court | Nick and Christian Candy accused of tax evasion in high court |
| (2 months later) | |
| The property tycoons Nick and Christian Candy have been accused of tax evasion in the high court, in a fiercely contested legal battle that threatens to reveal the complex offshore structure that has sheltered profits from their sprawling real estate empire for a decade. | The property tycoons Nick and Christian Candy have been accused of tax evasion in the high court, in a fiercely contested legal battle that threatens to reveal the complex offshore structure that has sheltered profits from their sprawling real estate empire for a decade. |
| The creators of the super-elite One Hyde Park complex near Harrods in Knightsbridge, west London, are being sued for damages by a rival businessman, Mark Holyoake, who is lifting the lid on their tax affairs in a £132m claim. | The creators of the super-elite One Hyde Park complex near Harrods in Knightsbridge, west London, are being sued for damages by a rival businessman, Mark Holyoake, who is lifting the lid on their tax affairs in a £132m claim. |
| Lawyers for Holyoake allege that Nick Candy, who is married to the pop star Holly Vallance, has been lying about the source of his wealth, and that the motive is tax evasion. They say Nick has been receiving secret dividends from his brother’s Guernsey-based property development business, in the form of two London homes worth more than £200m and a series of loans and cash gifts. | Lawyers for Holyoake allege that Nick Candy, who is married to the pop star Holly Vallance, has been lying about the source of his wealth, and that the motive is tax evasion. They say Nick has been receiving secret dividends from his brother’s Guernsey-based property development business, in the form of two London homes worth more than £200m and a series of loans and cash gifts. |
| In a dramatic twist, emails were read out in court that the claimants say show Nick acting as a shadow director of his brother’s firm. If the allegations are proven, Holyoake’s lawyers say the brothers could face a bill for unpaid taxes from HM Revenue and Customs. | In a dramatic twist, emails were read out in court that the claimants say show Nick acting as a shadow director of his brother’s firm. If the allegations are proven, Holyoake’s lawyers say the brothers could face a bill for unpaid taxes from HM Revenue and Customs. |
| Holyoake’s barrister, Anthony Trace, said: “We claim that the financial position of Nick Candy is being falsely stated. It’s all a matter of tax evasion.” | Holyoake’s barrister, Anthony Trace, said: “We claim that the financial position of Nick Candy is being falsely stated. It’s all a matter of tax evasion.” |
| Holyoake is seeking damages, saying that after the defendants lent him about £12m at short notice to purchase a property, he was bullied and coerced into further disadvantageous financial arrangements. | Holyoake is seeking damages, saying that after the defendants lent him about £12m at short notice to purchase a property, he was bullied and coerced into further disadvantageous financial arrangements. |
| The Candys deny making any threats of violence and describe all the accusations as “untrue, unsubstantiated and denied”. They stress that Nick Candy is not and has never been an ultimate or other owner of his brother’s Guernsey-based business, nor a director, employee or agent. | The Candys deny making any threats of violence and describe all the accusations as “untrue, unsubstantiated and denied”. They stress that Nick Candy is not and has never been an ultimate or other owner of his brother’s Guernsey-based business, nor a director, employee or agent. |
| They accuse Holyoake of defaulting on the loan and lying about his own assets, which he in turn denies. A spokesman said the brothers “have an open relationship with HMRC, and have complied fully with all their UK tax obligations”. | They accuse Holyoake of defaulting on the loan and lying about his own assets, which he in turn denies. A spokesman said the brothers “have an open relationship with HMRC, and have complied fully with all their UK tax obligations”. |
| A judge has yet to rule on the allegations made by both parties and the trial is not expected to begin until February 2017. The claims have emerged from a series of pre-trial hearings. | A judge has yet to rule on the allegations made by both parties and the trial is not expected to begin until February 2017. The claims have emerged from a series of pre-trial hearings. |
| At a hearing last week, Holyoake’s request for a full, worldwide freezing order on the Candys’ assets was rejected. He was refused leave to appeal and ordered to pay costs. | At a hearing last week, Holyoake’s request for a full, worldwide freezing order on the Candys’ assets was rejected. He was refused leave to appeal and ordered to pay costs. |
| In April, the brothers were ordered not to sell property over a certain value without giving notice to the court. Issuing the notification order, Mr Justice Nugee said: “A person who publicly flaunts his wealth, but whose declared holdings in his corporate interests do not begin to justify the wealth which he displays, is open to the charge that he is willing to say one thing and do something else.” | In April, the brothers were ordered not to sell property over a certain value without giving notice to the court. Issuing the notification order, Mr Justice Nugee said: “A person who publicly flaunts his wealth, but whose declared holdings in his corporate interests do not begin to justify the wealth which he displays, is open to the charge that he is willing to say one thing and do something else.” |
| Nugee questioned whether Nick Candy had cut all ties with the property development empire that he founded with his brother, Christian. | Nugee questioned whether Nick Candy had cut all ties with the property development empire that he founded with his brother, Christian. |
| Nugee said: “The public position which he and his brother have put forward that he has no interest in the property development business, and that his interests are in the interior decorating business represented by Candy & Candy Holdings, may not tell the whole truth.” | Nugee said: “The public position which he and his brother have put forward that he has no interest in the property development business, and that his interests are in the interior decorating business represented by Candy & Candy Holdings, may not tell the whole truth.” |
| Nick Candy has recently bought his wife a £26m yacht. The running costs are claimed to be as high as £2.6m a year. His properties are also mortgaged, and Trace said interest payments on the borrowings could run to several millions per year. | Nick Candy has recently bought his wife a £26m yacht. The running costs are claimed to be as high as £2.6m a year. His properties are also mortgaged, and Trace said interest payments on the borrowings could run to several millions per year. |
| Challenged to explain how Nick Candy, whose London-based interior decoration firm makes modest profits, was able to afford a billionaire lifestyle, the brothers have revealed a series of high-value transfers from Christian and his companies to Nick. | Challenged to explain how Nick Candy, whose London-based interior decoration firm makes modest profits, was able to afford a billionaire lifestyle, the brothers have revealed a series of high-value transfers from Christian and his companies to Nick. |
| In 2014, Nick received a two-floor penthouse at One Hyde Park, and the lease on Gordon House, a 200-year-old, grade II-listed mansion set in sweeping lawns in the grounds of the Royal Hospital, Chelsea. Christian gave the house to his brother after paying £75m for it in 2012. | In 2014, Nick received a two-floor penthouse at One Hyde Park, and the lease on Gordon House, a 200-year-old, grade II-listed mansion set in sweeping lawns in the grounds of the Royal Hospital, Chelsea. Christian gave the house to his brother after paying £75m for it in 2012. |
| Christian Candy’s lawyers told the court he had also made two payments worth a combined £52m to his brother, from Candy businesses. These were described in court as a loan. There was also a £10m cash gift. | Christian Candy’s lawyers told the court he had also made two payments worth a combined £52m to his brother, from Candy businesses. These were described in court as a loan. There was also a £10m cash gift. |
| The brothers have shown the court deeds of gift to prove that the assets, which represent a substantial part of a combined fortune estimated at £1.5bn in 2010, were given away. The claimants allege the transfers are not gifts but dividends, paid to Nick Candy by the Guernsey based property development business run by his brother. | The brothers have shown the court deeds of gift to prove that the assets, which represent a substantial part of a combined fortune estimated at £1.5bn in 2010, were given away. The claimants allege the transfers are not gifts but dividends, paid to Nick Candy by the Guernsey based property development business run by his brother. |
| The pair’s finances hinge on a decision taken a decade ago to split their business in two. Interior decoration and project management remained in the UK, overseen by Nick, who lives in London. | The pair’s finances hinge on a decision taken a decade ago to split their business in two. Interior decoration and project management remained in the UK, overseen by Nick, who lives in London. |
| The most lucrative element – developing and selling property – was moved offshore. It is run by Christian, through his Guernsey-based CPC Group, which was founded in 2004. For many years Christian was resident in Monaco, although his lawyer told the court he is now based in London. | The most lucrative element – developing and selling property – was moved offshore. It is run by Christian, through his Guernsey-based CPC Group, which was founded in 2004. For many years Christian was resident in Monaco, although his lawyer told the court he is now based in London. |
| The arrangement has allowed CPC to legally avoid tax on the profits from £2bn worth of sales at One Hyde Park. The development, which overlooks Harrods and the royal parks, came to symbolise the capture of London’s trophy homes market by offshore investors after many of the flats were snapped up by screen companies. | The arrangement has allowed CPC to legally avoid tax on the profits from £2bn worth of sales at One Hyde Park. The development, which overlooks Harrods and the royal parks, came to symbolise the capture of London’s trophy homes market by offshore investors after many of the flats were snapped up by screen companies. |
| A former adviser to the brothers has decided to give evidence to support Holyoake’s case. Emails between the Candys and the adviser, a Geneva-based former banker called William Pym, were read out to the court. Pym has also been employed by Holyoake, the court was told. | A former adviser to the brothers has decided to give evidence to support Holyoake’s case. Emails between the Candys and the adviser, a Geneva-based former banker called William Pym, were read out to the court. Pym has also been employed by Holyoake, the court was told. |
| The emails, sent in 2010, allegedly show Nick Candy issuing instructions for a CPC bank account, deciding whether to pay fees to an adviser, and being asked by one of its directors to approve the payment of fees. | The emails, sent in 2010, allegedly show Nick Candy issuing instructions for a CPC bank account, deciding whether to pay fees to an adviser, and being asked by one of its directors to approve the payment of fees. |
| In one, Christian Candy allegedly describes his brother as a fellow director, saying: “All the directors, including Nick and I, are in Guernsey this Wednesday coming.” | In one, Christian Candy allegedly describes his brother as a fellow director, saying: “All the directors, including Nick and I, are in Guernsey this Wednesday coming.” |
| Trace said: “There has now been, it’s quite clear, a massive fraud on the court. The suggestion that Mr Nick Candy is not an owner or a director of CPC is nonsense. We strongly suspect that Mr Nick Candy does have 50% of CPC Group and that all of these payments are dividends in specie [in kind] from CPC.” | Trace said: “There has now been, it’s quite clear, a massive fraud on the court. The suggestion that Mr Nick Candy is not an owner or a director of CPC is nonsense. We strongly suspect that Mr Nick Candy does have 50% of CPC Group and that all of these payments are dividends in specie [in kind] from CPC.” |
| After the hearing, a spokesman for the Candys said that Holyoake’s QC had “sought to make slanderous and entirely false allegations about the defendants’ businesses and tax responsibilities, relying on the privilege of court to make them”. | After the hearing, a spokesman for the Candys said that Holyoake’s QC had “sought to make slanderous and entirely false allegations about the defendants’ businesses and tax responsibilities, relying on the privilege of court to make them”. |
| “The judge dismissed the application for a freezing order without even needing to hear from CPC’s lawyers, describing it as an ‘abuse of the court’s process’. We consider this to be a further attempt by Mr Holyoake ... to force CPC Group into an early and unwarranted settlement. | “The judge dismissed the application for a freezing order without even needing to hear from CPC’s lawyers, describing it as an ‘abuse of the court’s process’. We consider this to be a further attempt by Mr Holyoake ... to force CPC Group into an early and unwarranted settlement. |
| “There is little doubt Mr Holyoake will continue with these misguided and unwarranted attempts to extract money from CPC Group, Christian Candy and Nick Candy. We will seek and expect vindication through the courts.” | “There is little doubt Mr Holyoake will continue with these misguided and unwarranted attempts to extract money from CPC Group, Christian Candy and Nick Candy. We will seek and expect vindication through the courts.” |
| Because the dispute has yet to go to trial, there has been no ruling of fact by a judge, and the allegations made on both sides are claims and not fact. | Because the dispute has yet to go to trial, there has been no ruling of fact by a judge, and the allegations made on both sides are claims and not fact. |
| Court emails | Court emails |
| Emails read out in court show Nick Candy is still playing an active role in his brother’s property development business, according to allegations made by lawyers for Holyoake, who is suing the Candy brothers for damages. | Emails read out in court show Nick Candy is still playing an active role in his brother’s property development business, according to allegations made by lawyers for Holyoake, who is suing the Candy brothers for damages. |
| The Candys say that Nick is not a director, employee, agent or beneficial owner of CPC. They say Holyoake has used court privilege to made “slanderous and entirely false allegations about the defendants businesses and tax responsibilities”. | The Candys say that Nick is not a director, employee, agent or beneficial owner of CPC. They say Holyoake has used court privilege to made “slanderous and entirely false allegations about the defendants businesses and tax responsibilities”. |
| The emails in question were sent in 2010 between the Candy brothers and William Pym, a financial adviser in Geneva. | The emails in question were sent in 2010 between the Candy brothers and William Pym, a financial adviser in Geneva. |
| From CPC’s finance director, Tim Dean: “I spoke to Nick and we are happy to proceed with a CPC account where the cash is deposited ...” | From CPC’s finance director, Tim Dean: “I spoke to Nick and we are happy to proceed with a CPC account where the cash is deposited ...” |
| To William Pym, copied to Nick Candy: “Let’s resolve Bank of China on Monday and Nick and I will make a decision.” | To William Pym, copied to Nick Candy: “Let’s resolve Bank of China on Monday and Nick and I will make a decision.” |
| From William Pym to Nick Candy: “We are all waiting for your OK to proceed.” | From William Pym to Nick Candy: “We are all waiting for your OK to proceed.” |
| From CPC’s director, Steven Smith, to Nick Candy: “I am ready to go with the docs once you approve the fees.” | From CPC’s director, Steven Smith, to Nick Candy: “I am ready to go with the docs once you approve the fees.” |
| From Nick Candy to William Pym: “William, I have spoken to Chris and I don’t think CPC should pay any fees … CPC will not pay any fees.” | From Nick Candy to William Pym: “William, I have spoken to Chris and I don’t think CPC should pay any fees … CPC will not pay any fees.” |
| From Nick Candy to William Pym: “William, we have three other banks that have already given us terms ... When am I meeting the top guy?” | From Nick Candy to William Pym: “William, we have three other banks that have already given us terms ... When am I meeting the top guy?” |
| From Christian Candy to William Pym, copied to Nick Candy: “Hi William. All the directors including Nick and I are in Guernsey this Wednesday coming.” | From Christian Candy to William Pym, copied to Nick Candy: “Hi William. All the directors including Nick and I are in Guernsey this Wednesday coming.” |
| From William Pym to Nick Candy and Christian Candy: “Dear Nick and Chris, I just wanted to update you on where we are with regards to your funding request for One Hyde Park”... [X] and myself have now met with the new CEO of BOC [Bank of China] Switzerland. He is extremely keen to develop the CPC relationship ... CPC as a result have now been pushed to the top of the pile.” | From William Pym to Nick Candy and Christian Candy: “Dear Nick and Chris, I just wanted to update you on where we are with regards to your funding request for One Hyde Park”... [X] and myself have now met with the new CEO of BOC [Bank of China] Switzerland. He is extremely keen to develop the CPC relationship ... CPC as a result have now been pushed to the top of the pile.” |