An astonishing 761 companies have been registered by Chinese companies in the past year at this modest flat above a takeaway shop in Somerset, a Mail on Sunday investigation has revealed.
Chinese fraudsters are suspected of registering more than 11,000 new companies in the UK in the past year by exploiting a ‘soft touch’ system that lets anyone create a new business without proof of identity.
Our investigation has found that Chinese nationals have been registering an average of more than 30 new companies every day over the past 12 months on the Government’s Companies House website.
Most of the firms are registered to only 18 addresses, including the flat above the Canton Chef takeaway in Weston-super-Mare, a derelict shop, a £1 million flat and houses on a surburban street in South London.
Most of the firms are registered to only 18 addresses, including the flat above the Canton Chef takeaway in Weston-super-Mare
Furious property owners – who have no link to the companies or their activities – usually discover their premises have been registered as the headquarters of a newly formed Chinese company only when a letter arrives from Companies House.
While it can take weeks of form filling to get the bogus company removed, it takes less than 15 minutes and costs just £12 to register the company and needs neither proof of address, passport nor driving licence.
Billions of pounds has been laundered in Britain in recent years by Russian criminals, leading London to be dubbed Londongrad by fraud experts.
Now there are fears that Chinese fraudsters are taking advantage of the lax system to launder money out of China to avoid high taxes and the communist regime’s currency controls.
‘The soft-touch system for registering companies in the UK is a fraudster’s paradise,’ said Graham Barrow, a former investigator for HSBC and Deutsche Bank, who uncovered the scandal.
Mr Barrow, who hosts The Dark Money Files podcast, added: ‘Once they have a UK company registered, these crooks will use it to get an online bank account that they can use to funnel money before anyone challenges the new company or Companies House finally gets round to striking it off.’
South Bank Tower London where just one apartment has over 1500 businesses registered
An empty 291 Brighton Rd. Croydon, where over 2000 businesses have been registered
In the meantime, homeowners have to deal with the shocking situation.
When an MoS reporter visited the flat in Weston-super-Mare last week, its owner Jin Lin said: ‘I know nothing about these companies. I have never heard of this.’
Chinese nationals also set up six companies at six different homes in the same street in Sidcup, South-East London last month.
Resident Karen Weeks, 34, only found out when an accountancy firm sent a letter offering its services to the new firm registered to her £600,000 semi-detached home. ‘It has been a complete nightmare,’ she said.
‘I rang up Companies House straight away and they said it will take them three to four weeks to even look into it. They said it was happening all the time and there was nothing they could do to stop it. Then, ridiculously, she told me I would have to send my proof of address to them.’
Bizarrely, Companies House will send a letter to Mrs Weeks’s address to inform the Chinese director of the new firm that the registration is being contested. The firm will have 28 days to reply or be struck off.
In South Croydon, South London, a vacant shop is the registered headquarters of 2,608 companies set up by Chinese nationals in the past year.
Neighbours said the premises had been rented by a Chinese couple last summer and they came to collect ‘mountains of post’.
Brett Tomlinson, who works in a printing shop next door, said: ‘We had a couple of people come into the shop trying to track down whoever owns the business, saying they had been scammed. One of them suggested he had lost £20,000.’
A £1 million flat in Southbank Tower overlooking the River Thames in Central London is home to 1,790 companies registered by Chinese nationals. A letterbox for the flat in the reception was stuffed full of unopened letters.
Karen Weeks only found out when an accountancy firm sent a letter offering its services to the new firm registered to her £600,000 semi-detached home in Sidcup
According to the National Crime Agency, these types of shell companies – which have no staff and do not trade but move assets on behalf of individuals or other businesses – are being used to launder £100 billion of stolen and illicit money through Britain each year.
Darren Jones, chairman of the Business, Energy and Industrial Strategy Committee, said the MoS investigation ‘highlights yet again the case for overhauling the checks and powers at Companies House’.
Last night, a Government spokesman said: ‘We have announced plans for a broad package of reforms to give Companies House a strengthened role in tackling economic crime by increasing the transparency of company ownership and management while offering businesses greater protection.’