Charles Emond and the rest of Caisse de Depot’s senior management recently thought it a good idea to invest $3.1 billion to own 22% of Jebel Ali Port and its free zone, where there is zero taxation for businesses. .
By buying and keeping shares in companies and subsidiaries of companies registered in tax havens, the Caisse de depot et placement du Québec “clears” this type of investment.
DP World is a subsidiary of Dubai World, a joint venture company owned by the Government of Dubai. And Jebel Ali is the 9th busiest port in the world, the largest man-made port and the largest and by far the busiest port in the Middle East.
Why is this Caisse investment in the United Arab Emirates arousing controversy?
- Listen to the economic chronicle of Michel Girard radio:
- One, because the Jebel Ali Free Zone is the equivalent of a tax haven.
- Two, because the United Arab Emirates refused to condemn Russia’s invasion of Ukraine, and moreover, the country welcomed Russian oligarchs with open arms.
The refuge of the Russians
Here is what Andreas Krieg, associate professor at the School of Security Studies at King’s College London, said last week in the magazine Time on Dubai, statement reproduced in The Globe Mail.
“Dubai is one of the world’s leading centers of dirty money, a key node in illicit financial networks providing a safe financial haven for warlords, fraudsters, terrorist organizations and gangsters. It is not surprising that the kleptocrats of the Kremlin have recently washed up on the shores of the Emirates. Allowing Putin and his entourage to circumvent sanctions makes the UAE a key catalyst for the interests of Russia’s power elites. »
Interviewed by The newspaperFranck Jovanovic, professor of economics and finance at TÉLUQ University, also paints a gloomy portrait of the United Arab Emirates.
“It is clearly a tax haven, it is known. Also, the UAE has often been singled out for money laundering issues and they are not transparent. The decision of the Fund is surprising, I am perplexed. »
The same is true for finance critics of opposition parties in the National Assembly.
“It doesn’t make any sense. It is a total aberration. It is totally unacceptable,” according to PQ MP Martin Ouellet.
For her part, Ruba Ghazal, of Québec solidaire, believes that “it is embarrassing that a public institution of this importance [la Caisse] buys shares in a free zone that encourages tax havens”.
The Caisse does not care about criticism
But at the Caisse, we don’t care about this kind of denunciation.
We hide behind the classic answer, like, the Caisse respects “Canadian sanctions” concerning all its investment decisions and its transaction with DP World was carried out “after an exhaustive and meticulous process”.
“Our partner, specifies the Fund to the Canadian Press, assured us that it meets the highest standards. DP World has no assets in Russia. »
The Caisse held Russian assets worth $1.13 billion. It liquidated them at the beginning of last March. We expected no less from him!
bad example
Regardless of its CEO, Charles Emond, the Caisse sets a bad example when it invests through companies registered in tax havens.
The Caisse may affirm “that it respects all the laws and fulfills its tax obligations” and that it “opposes all forms of tax evasion”, it is certainly not by holding subsidiaries in tax havens that it will set an example.
In the Cayman Islands, the Caisse subsidiaries registered there are Apollo Hercules Partners, KKR-CDP Partners, GMAC ASO Fund. It also includes the Kiwi Holdco Cayo joint venture, in which the Caisse owns 69% of the shares.
In Bermuda, Einn Volant Aircraft Lessing Holding (in which the Fund holds 90.5% of the shares) is incorporated.
As for the DP World Caucedo joint venture, which is 45% owned, it is registered in the British Virgin Islands.