It's no longer possible to rely 100% on ads to keep our organization going. If you believe in why Films For Action exists, we hope you'll become a supporter on Patreon. A monthly donation of $1, $3, $5 or more per month will really help!
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
Featured Films
The Staging Post: Courageous People Never Give Up! (2017)
61 min The Staging Post follows two Afghan Hazara refugees, Muzafar and Khadim. Stuck in Indonesia after Australia 'stopped the boats' and facing many years in limbo, they built a community and started the school which inspired a refugee education revolution. A real-life...
Inhabit: A Permaculture Perspective (2015)
92 min Humanity is more than ever threatened by its own actions; we hear a lot about the need to minimize footprints and to reduce our impact. But what if our footprints were beneficial? What if we could meet human needs while increasing the health and well-being of our...
Within Reach (2013)
87 min Within Reach explores one couple's pedal-powered search for a place to call home. Mandy and Ryan gave up their jobs, cars, and traditional houses to 'bike-pack' 6500 miles around the USA seeking sustainable community. Rather than looking in a traditional neighborhood, they...
Schooling the World (2010)
66 min If you wanted to change an ancient culture in a generation, how would you do it? You would change the way it educates its children. The U.S. Government knew this in the 19th century when it forced Native American children into government boarding schools. Today, volunteers...
Fall and Winter (2013)
102 min This stunning film takes you on a hypnotic journey, reaching to the past to understand the origins of the catastrophic environmental transitions we now face. Over two years, director Matt Anderson traveled 16,000 miles to document firsthand our modern industrial world and the...
The Economics of Happiness (2011)
65 min Economic globalization has led to a massive expansion in the scale and power of big business and banking. It has also worsened nearly every problem we face: fundamentalism and ethnic conflict; climate chaos and species extinction; financial instability and unemployment. There...
Trending Today


Love Films For Action? Become a Patron!

Our Patreon campaign is now live! We hope you'll be among the first to support this new direction for Films For Action. The goal is to go 100% ad-free by next year and become 100% member supported. A monthly pledge of just $1 -5 per month x a few thousand awesome people will ensure we can continue our work and grow our impact across the world. Click here to join.

Join us on Facebook
Byron Burgers Sending Millions to Owners Offshore While Workers Are Deported