Byron Burgers Sending Millions to Owners Offshore While Workers Are Deported
Byron Burgers Sending Millions to Owners Offshore While Workers Are Deported
By Corporate Watch / corporatewatch.org
Aug 1, 2016

The Byron burger chain is facing a wave of protests and condemnation for helping the Home Office organize a series of immigration raids on its London restaurants that led to the arrest of 35 of its workers from Albania, Brazil, Nepal and Egypt last week.

And while their company is collaborating with the Home Office to deport people, Corporate Watch has found that the owners of Byron are siphoning millions of pounds offshore.

Since buying Byron in 2013, investment fund Hutton Collins has already made £14m through a complicated financial scheme that sees money routed through the Channel Islands Stock Exchange to companies in Luxembourg.

Mayfair-based investment fund Hutton, run by a group of financiers and former bankers, bought Byron inNovember 2013 for £100m. Paladin, a ‘boutique’ private equity group co-founded by Caffe Nero boss Gerry Ford, has also bought a minority stake in the company, as have Byron’s management team, including founder and chief executive Tom Byng.

Accounts filed at Companies House for the Byron group show that the new owners made the majority of their investment in the form of a £82.7m loan, at an interest rate of 10%.

On the face of it this makes no sense – why would the owners saddle their own company with so much debt, at such a high interest rate (Byron is paying just 3% on the loans it has from banks)? Hutton could have put this money into shares in Byron, and received dividends when the company made a profit. But dividends are paid after a company's profits have been taxed, whereas interest payments are taken from profits before they are taxed, thus potentially reducing a company’s tax bill.

In the 19-month period from November 2013 to June 2015, when the latest accounts were made up to, interest of almost £14m was racked up on these “shareholder loans”. Instead of receiving the money straight away, the owners have chosen to add it back onto the original loan so that more and more interest can be charged every year, leaving them with a hefty reward whenever they choose to sell the business on.

The scheme is in its early stages and how much UK corporation tax the interest payments will help Byron avoid remains to be seen. But it is already helping the owners move their earnings from the burger chain into tax havens.

Hutton’s offices are on Pall Mall but the Byron group accounts show that the investment fund made the loans through a Luxembourg-registered company, HC Investissements VI Sarl, which is where their interest will be sent. To make things more convoluted, Paladin private equity owns its minority stake in the loan through its own Luxembourg-registered company, Paladin Holdings Sarl, plus one in the Isle of Man - Paladin Byron Limited Partnership. Eric Bellquist, a former Lehman Brothers banker and now a Hutton Collins partner, is also listed as a partner in the latter, while Graham Hutton, also a partner at Hutton Collins, “has an interest” in TH Lord Sarl, another Luxembourg company with a stake in the loan.  

Records show that these loans have been made through the Channel Islands Stock Exchange, which, thanks to a legal loophole, means the interest can automatically be sent to the owners tax free (click here for an explanation of the ‘quoted eurobond exemption’, as the loophole is known).

Hutton Collins owns a number of other UK businesses including the wagamama restaurant chain, the Hunter clothing brand and Healthcare at Home, which receives the vast majority of its multi-million pound income from the NHS.

Byron’s accounts also show how lucrative the business has become for founder and chief executive Tom Byng.

The highest paid director – presumably Byng - made £266,000 in 2015, with an extra £19,000 of pension contributions on top. On top of this, he has a nearly 1% stake in the shareholder loans and as such will have earned around £72,000 from the interest on these in 2015. 

According to Right to Remain, most of the workers deported were paid the minimum wage of £7.20 per hour.

0.0 ·
0
Trending Today
10 Words Every Girl Should Learn
Soraya Chemaly · 13,147 views today · "Stop interrupting me."  "I just said that." "No explanation needed." In fifth grade, I won the school courtesy prize. In other words, I won an award for being polite. My...
How Norway Avoided Becoming a Fascist State
George Lakey · 12,339 views today · Instead of falling to the Nazi party, Norway broke through to a social democracy. Their history shows us polarization is nothing to despair over.
Where the Term "Redneck" Came From
15 min · 9,540 views today · If you don't know this story, you'll never look at the word the same again.  This is just a window into the sometimes shocking, subversive and untold history of the United...
Without Saying a Word This 6 Minute Clip From Samsara Will Make You Speechless
6 min · 8,088 views today · Can you put this video into words? It's a clip from the phenomenal documentary Samsara, directed by Ron Fricke, who also made Baraka.  If you're interested in watching...
What Happens When You Rebel Against the Herd
Sofo Archon · 6,178 views today · Are You Truly Living Your Life? You live, but are you living the way you want to live, or the way others want you to live? You choose, but are your choices based on...
Everything We Think We Know About Addiction Is Wrong
6 min · 5,009 views today · What causes addiction? Easy, right? Drugs cause addiction. But maybe it is not that simple. This video is adapted from Johann Hari's New York Times best-selling book 'Chasing...
Artificial Ethics and the Search for Intelligence
5 min · 2,876 views today · How to stop a robot turning evil.  It's 2027 and Mental Endeavours Ltd has a problem with their flagship robot Günther. How do you program an intelligent machine not to...
How a Lack of Touch Is Destroying Men
Mark Green · 2,584 views today · Why Men Need More Platonic Touch in their Lives
Charles Eisenstein: The Two Great Stories That Give Meaning to Our Lives
6 min · 1,942 views today · What matters in life? Who are we? Every culture has answers to these questions. And the way we answer them has profound effects on the health of people and planet. This is a...
Two Ways to Build Global Community
Dan Hind · 1,649 views today · A platform co-operative approach to information, rather than the models of Facebook and legacy media, provide reason for optimism, writes Dan Hind.
Philippine Vigils Against Vigilantes - The Reign of Terror in the President's War on Drugs
7 min · 1,569 views today · The war on drugs waged by Philippine President Rodrigo Duterte has taken more than 7,000 lives since its inception. It took the killing of a South Korean businessman by police...
Films for Action's Public Film Screening Guide
Tim Hjersted and Matt Toplikar · 1,437 views today · This guide will give you step by step instructions on how to host Films For Action sponsored film screening events in your city. It is intended primarily for people who have...
System Change Will Not Be Negotiated
Nnimmo Bassey · 1,188 views today · We frequently hear calls for system change, at public mobilisations, in conference halls and even in negotiation halls. The calls come as slogans, they come in anger and they...
Voices of Standing Rock
49 min · 1,111 views today · Short stories told by water protectors at Standing Rock, North Dakota. Part 1 - Introduction: Since mid-August 2016, thousands have set up camp near the Standing Rock Sioux...
John Lennon's "Imagine," Made Into a Comic Strip
John Lennon. Art by Pablo Stanley · 1,001 views today · This is easily the best comic strip ever made.  Pabl
Your Lifestyle Has Already Been Designed (The Real Reason For The Forty-Hour Workweek)
David Cain · 935 views today · Well I’m in the working world again. I’ve found myself a well-paying gig in the engineering industry, and life finally feels like it’s returning to normal after my nine months...
The Coming War on China
John Pilger · 899 views today · A major US military build-up – including nuclear weapons – is under way in Asia and the Pacific with the purpose of confronting China. John Pilger raises the alarm on an...
Real Underground Kingdom That Has Existed for Millions of Years Went Unnoticed, Until Recently...
Kid Krunk · 820 views today · 28 Stunning Photos Of The World’s Largest Cave
A Hauntingly Beautiful Short Film About Life and Death
5 min · 727 views today · The Life of Death is a touching handdrawn animation about the day Death fell in love with Life.
What Makes Call-Out Culture So Toxic
Asam Ahmad · 643 views today · Call-out culture refers to the tendency among progressives, radicals, activists, and community organizers to publicly name instances or patterns of oppressive behaviour and...
Load More
What's Next
Like us on Facebook?
Byron Burgers Sending Millions to Owners Offshore While Workers Are Deported