NCA is investigating whether offshore firm was source of up to £8m in pro-Brexit funding

Just off the quayside in Douglas on the Isle of Man is an unprepossessing Victorian building named Murdoch Chambers, built as the offices of the island’s gas company. But this building – and the Isle of Man’s status as a global hub for offshore companies – is at the centre of a criminal investigation into spending irregularities during the EU referendum campaign.

On Thursday the Electoral Commission confirmed it had asked the National Crime Agency to investigate whether Rock Holdings Limited, a company controlled by the businessman Arron Banks and registered on the ground floor of that Isle of Man office building, was the illegal source of up to £8m in funding provided to Banks’ Leave.EU campaign group and five other pro-Brexit campaign groups during 2016.

Under British electoral law donors to EU referendum campaigns had to be individuals or companies registered in the UK or Gibraltar. Banks, who uses a complex web of companies across multiple countries for his business and political activities, insists he complied with this rule.

In his telling, all of the millions of pounds of donations and loans came from either his own pocket or one of his British businesses.

But the Electoral Commission has alleged Banks and his associates may have “knowingly concealed and sought to conceal the true circumstances” of the funding.

Facebook Twitter Pinterest Arron Banks takes part in a press briefing by the Leave.EU campaign group in November 2015. Photograph: Leon Neal/AFP/Getty Images

Its investigation concluded that there were reasonable grounds to suspect the true source of the money was the Isle of Man-registered business, which would count as an illegal overseas donation to a British political campaign. As a result “various criminal offences” may have been committed.

One of the key reasons for banning political donations from offshore companies is the lack of transparency over who might ultimately own or control a business. The Isle of Man, once described by the former chancellor Alistair Darling as “a tax haven sitting in the Irish Sea”, affords its companies a great deal of secrecy. Rock Holdings is no exception to this rule.

Publicly available documents reveal next to nothing about the company’s business activities and the source of its potential Brexit funding, other than the fact it was incorporated in 2005, long before Banks, who built a career in the insurance industry, expressed any substantial interest in politics.

Arron Banks faces criminal inquiry over Brexit campaign Read more

The Isle of Man company is owned by a nominee shareholder, Fidecs Nominees, itself based offshore in Gibraltar, an arrangement that has the effect of masking the identity of a company’s true owner or owners.

However, Banks’ involvement has been confirmed by references to his ownership in the accounts of another of his British businesses.

Information about the Isle of Man company’s activities has emerged through various regulatory statements over the years. In 2007 Rock Holdings was used to hold an interest in a wealth management company on behalf of Banks and his then business partner Paul Chase-Gardener. Chase-Gardener withdrew from the Rock Holdings business in 2013 and is not included in the investigation.

Despite the lack of transparency over its activities, the company is not dormant. This year Rock Holdings’ former nominee directors resigned and were replaced by Banks’s brother Jonathan, a lawyer based in Hong Kong, and Timothy Revill, a retired accountant who lives in Guernsey, another offshore base.

The Electoral Commission said that owing to the launch of the criminal investigation it was unable to publish all of its evidence. But some of the material it has released appears to raise questions about how Banks’s British companies could have provided his £8m of Brexit funding.

Confusingly, Banks’s business associate Liz Bilney told the commission that the Isle of Man company had no involvement in the £8m funding for pro-Brexit political activities, despite the figure being recorded in its accounts.

The Electoral Commission concluded it had “reasonable grounds to suspect” that this was not the correct version of events.

Bilney, who served as Leave.EU’s chief executive and has denied any wrongdoing, was referred to the Metropolitan police after a separate Electoral Commission investigation this year. Leave.EU is appealing the commission’s findings.

Banks said in a statement: “I am pleased that the Electoral Commission has referred me to the National Crime Agency. I am confident that a full and frank investigation will finally put an end to the ludicrous allegations levelled against me and my colleagues.

“There is no evidence of any wrongdoing from the companies I own. I am a UK taxpayer and I have never received any foreign donations. The Electoral Commission has produced no evidence to the contrary.”

The Bristol-based businessman first emerged on the UK political scene in 2014 with his announcement that he would be defecting from the Conservative party to Ukip. After the former Tory leader William Hague responded he had never heard of him, Banks said he would scrap a planned £100,000 donation to Ukip and donate £1m instead.

He rose to national prominence during the EU referendum, becoming the UK’s biggest political donor after running an aggressive pro-Brexit campaign with the backing of Nigel Farage. His Leave.EU group was known for its provocative anti-immigration messages and also spent much time criticising the official Vote Leave group.

Last year Banks, who denies wrongdoing and alleges a conspiracy by pro-EU activists to bring him down, described how his campaign didn’t break electoral law but actively “pushed the boundary of everything, right to the edge” and his group was “just cleverer than the regulators and the politicians”. This assertion is now set to be challenged by the police.