SCOTCH giant Whyte and Mackay is owned in a Caribbean tax haven by a billionaire named in the Panama Papers, it has emerged.

The firm, which claims that the pride and passion of its Glaswegian founders James Whyte and Charles Mackay are “in every glass” of its whisky, ultimately belongs to a holding company registered in the British Virgin Islands or BVI.

READ MORE: Brand on the run - Whyte and Mackay whisky's journey from dockyard to tax haven

Whyte and Mackay Limited’s last annual accounts show it paid £172,000 in income tax in 2015 on pre-tax profits of just over £24 million.

There is no suggestion of unlawful conduct by the company.

Whyte & Mackay's brands

UK authorities, led by former prime minister David Cameron and his chancellor George Osborne, as well as international organisations, such as Oxfam, have railed against offshore ownership.

Today The Herald is launching a series of investigations into Scottish links with tax havens.

Lisa Stewart of Oxfam Scotland described news of Whyte and Mackay’s status as a “scandal” that is “yet more evidence that our taxation system is broken”.

And she added: “The UK Government must put an end to the secrecy that enables the rich and powerful to get away without paying their fair share of taxes.

“With almost one in five people in Scotland living in poverty, these funds could have been utilised providing a vital safety net to the poorest in our society.”

Andy Wightman MSP

Green MSP Andy Wightman, learning of the Whyte and Mackay arrangements, said: “It is clear that secrecy jurisdictions are now a routine part of the ownership of land, property and corporate assets in Scotland.

“This situation poses serious questions about the accounting practices and tax liabilities and highlights the need for greater transparency in the ownership of land and capital.”

The whisky firm’s offshore ownership, revealed by filings at Companies House, came after the business was bought by one tycoon, Filipino Andrew Tan, from another, India’s Vijay Mallya, in 2014.

Mr Tan, a Chinese-born burger, brandy and building entrepreneur who lives in Manila, was named in the Panama Papers – a data leak of documents from a law firm earlier this year –because of his substantial offshore empire.

Andrew Tan

One of those businesses is Emperador International Limited, registered at a PO Box in the BVI capital Road Town. This company, through a variety of others, owns the 160-year-old Whyte and Mackay Limited, which, apart from its trademark blend, produces Vladivar vodka and the Jura and Dalmore premium malts.

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Whyte and Mackay declined to discuss its ownership or tax arrangements when contacted by The Herald. A spokeswoman said: “We will not be making any comment on this matter.”

Some tax experts insist there can be good reasons why businesses or entrepreneurs use so-called fiscal paradises or tax havens to register ownership of companies.

Some businesses, for example, may wish to avoid double or even tripletaxation – so they only pay a levy on their profits once. This is often the case in Third World countries with bureaucratic tax regimes. Hundreds of Filipino business leaders were named in the Panama Papers alongside Mr Tan.

As The Herald revealed last year much of Scotland’s whisky industry is owned outside the country, either in England or overseas.

Whyte & Mackay's Glasgow HQ

The sale of Whyte and Mackay by Mr Mallya to Mr Tan’s Emperador is already under investigation by market regulators in India for suspected foreign exchange violations. The tycoon sold Whyte and Mackay amid competition concerns before he sold his alcohol concern to Diageo, a multi-national with substantial Scottish distilling interests.

Last week the Securities and Exchange Board of India also initiated initiated investigations in to Mr Mallya’s affairs, starting with all contracts involving him, Diageo and his alcohol firm, United Spirits, which had owned Whyte & Mackay before it was sold to Emper

READ MORE: The Herald View: our editorial on tax havens

Road Town, British Virgin Islands: where Whyte & Mackay is owned

Mr Mallya, meanwhile, had already been accused of amassing debts of nearly £1bn is also under investigation for continuing to enjoy a lavish lifestyle. The businessman now lives in what he calls “forced exile” in London, after the collapse of his firm Kingfisher Airlines in 2012. Indian authorities have cancelled his passport. In another development, a consortium of banks led by the state bank of India sought contempt proceedings against Mr Mallya for allegedly failing to provide full details of his global assets.

READ MORE: Brand on the run - Whyte and Mackay whisky's journey from dockyard to tax haven

Chinese-born rags-to-riches tycoon Mr Han was one of 572 Filipino business people named in the Panama Papers. The entrepreneur, said by Forbes magazine to be worth more than $5bn, is chairman of a conglomerate called Alliance Global Group, which owns the Emperador distillery, maker of one of Asia’s most popular brandies, and now alcohol firms in Spain and Scotland.

Do you know of a Scottish business or property owned in an overseas tax haven? Or of a Scottish company used as a vehicle to avoid tax overseas? Then please contact me, David Leask, at david.leask@theherald.co.uk

Vijay Mallya

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