New research reveals a black hole at the heart of London’s FTSE100

May 13th, 2014


13 May 2014 – The secrecy surrounding thousands of subsidiaries created in tax havens by leading UK companies has created a black hole at the heart of the FTSE100, a new Christian Aid report warns today.

FTSEcrecy reveals an information void which threatens investors, customers and government regulators, because it leaves them without the facts they need to make good decisions about FTSE100 companies.

For instance, it may be impossible for governments to tell if they are paying the right amount of tax and for investors to tell the true worth of a company.

Christian Aid’s new research found that FTSE100 companies have created 29,891 subsidiaries. But details of the subsidiaries’ turnover, assets, shareholder funds and number of employees are freely available in relation to only one-quarter (26 per cent) of them.

Such information is impossible to obtain, even for payment, in relation to a further 21 per cent of the subsidiaries (6,396 companies).

Data on the remaining 53 per cent of FTSE100 companies’ subsidiaries (more than 15,000) is available – but only on payment of a fee. These vary from the £1 that UK Companies House charges for annual reports and annual returns to more than US$10 per document permitted in some other jurisdictions.

Where information was not available from public authorities, Christian Aid found that it was sometimes available from fee-charging private databases of company information.


‘We were shocked by how little information is freely available about most companies’ subsidiaries,’ said Katharine Teague, co-author of the report, which reveals previously unpublished data about FTSE100 companies.

‘What our findings show is that secrecy is not the exception but the norm, even among the largest 100 companies whose shares are traded on the London Stock Exchange.

‘These are household-name firms in which millions of people invest, through their pension funds and savings. But the secrecy is so deep and widespread that it is like a blindfold on everyone who has financial dealings with these companies.’

The new research also highlights FTSE100 companies’ heavy use of tax havens. More than 90 per cent of their subsidiaries are based in places defined as ‘secrecy jurisdictions’ by the Financial Secrecy Index.

Almost half of those subsidiaries are in the UK (which is itself defined as ‘moderately secretive’). Of the remainder, 14 per cent are in ‘highly secretive’ tax havens such as Switzerland, Luxembourg, Hong Kong, Bermuda and the Cayman Islands.

The FTSE100 sectors with most subsidiaries in highly secretive tax havens are investment and finance (with 37 per cent of their subsidiaries in such locations), banks (28 per cent), mining companies (19 per cent) and real estate (18 per cent).


The sectors most likely to have subsidiaries about which no information is available are: mining, oil & gas, insurance, banking, media and travel and leisure.

The staggering corporate opacity revealed in this report poses a significant risk to government authorities and others that might have dealings with such companies, the report states.

It argues that without greater levels of transparency, authorities in countries where FTSE100 companies operate will not be able to obtain the data required to assess if corporations are complying with the existing legislation in areas such as corporate taxation.

This, in turn, means that rich and poor countries alike may be missing out on tax revenue to fund vital public services.

Ms Teague added: ‘If we want to ensure that the companies playing ever larger roles in our societies are financially stable, socially responsible and well-regulated, then such secrecy must end. Transparency won’t guarantee well-behaved firms but it is a necessary condition for it.’

She added: ‘David Cameron declared his intention to “knock down the walls of company secrecy” when the G8 met in the UK last summer. While the UK has taken some steps since then, our report shows that we are only chipping away at the plaster work. The foundations of secrecy stand firm.’


The report recommends that the UK and other governments require all companies to report their accounts on a public country-by-country basis, requiring them to publish data such as profits made and taxes paid separately for each country in which they operate. Such a rolling back of secrecy would help governments to ensure that companies are paying the right amount of tax.

FTSEcrecy also calls for all jurisdictions to require all companies registered in their territory to submit annual statutory accounts, including audited balance sheets, profit and loss accounts, cash flow statements and directors’ report or annual returns. Governments should enforce the requirements.

Further recommendations are that companies’ statutory accounts should be publicly accessible at no cost and that governments in Europe and G20 countries should establish public registers of the real (or ‘beneficial’) owners of companies, foundations and trusts.

For more information and to arrange interviews, please contact Rachel Baird on 00 44 (0)207 523 2446 or 24 hour press duty phone – 07850 242950

Notes to editors:

1. Christian Aid works in some of the world’s poorest communities in around 50 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects.

2. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, sustainably. Our strategy document Partnership for Change explains how we set about this task.

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Written by Christian Aid

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