The NUT has now taken up the issue, uncovering further information which leads them to state that there are serious questions to be answered on the connection between Mossack Fonseca, Bellevue Education and Bellevue Place Education Trust, which among others runs Kilburn Grange Free School in Brent.
The NUT call for a full investigation and report by the Department for Education.
This is their dossier. It is longer than normal articles on this blog but it is a thorough investigation that repays close study. Brent Council currently has a policy of encouraging free schools in order to provide additional school places. They should pay particular attention and press the DfE about its due diligence in the free school application process.
Click on 'read more' to read the dossier in full.
FREE SCHOOL PROVIDER WITH LINKS TO OFFSHORE COMPANY
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Information derived from the leaked “Panama Papers” shows
that Bellevue Education is part owned by a company which was set up by the
Panamanian law firm Mossack Fonseca. Bellevue Education is one of two companies
behind Bellevue Place Education Trust (BPET) - a state-funded academy trust
that runs free schools in London and the south east.
The Department for Education (DfE) and BPET deny that
Bellevue Education has any influence over the running of the free schools.
However, the NUT believes that there are still serious questions to be answered
about connections between BPET and Bellevue Education. This NUT dossier
outlines allegations made against Bellevue Education and provides evidence of
the clear link between the company and the academy trust. The DfE must investigate and publish a full report as a matter of
urgency.
1. Bellevue Place Education Trust
Bellevue Place Education Trust (BPET) is a multi-academy
sponsor which operates seven state-funded primary free schools in London and
the south east. It was established in 2012 as a joint venture between two
private companies:
- Bellevue Education, which operates ten private schools in the UK and two boarding schools in Switzerland; and
- Place Group, an education consultancy that sells project management services to academies and free schools.
BPET’s first free school, Rutherford House, opened in
September 2013. It now runs the following free schools:
Local
authority
|
School
|
Open
date
|
Wandsworth
|
Rutherford House School
|
02/09/2013
|
Windsor and Maidenhead
|
Braywick Court School
|
01/09/2014
|
Islington
|
Whitehall Park School
|
01/09/2014
|
Hackney
|
Halley House School
|
01/09/2015
|
Brent
|
Kilburn Grange School
|
01/09/2015
|
Richmond upon Thames
|
Deer Park School
|
01/09/2015
|
Barnet
|
Watling Park school
|
01/09/2015
|
BPET’s Members
are:
- Claire Delaney (also Chair of Trustees) Managing Director of Place Group;
- Mark Malley (also Vice Chair of Trustees), CEO of Bellevue Education;
- Simon Rule, founder and CEO of Place Group (also a Trustee);
- Marwan Naja, Chairman of Bellevue Education; and
- Mervyn Douglas.
BPET’s full complement of current trustees is:
- Claire Delaney (Chair of Trustees) Managing Director of Place Group;
- Mark Malley (Vice Chair), CEO of Bellevue Education;
- Steven Wade, Bellevue Education UK Schools Director;
- Simon Rule, founder and CEO of Place Group;
- Tom Legge, former New Schools Director at Place Group; and
- Mark Greatrex (Chief Executive).
2. Bellevue Education
CEO and former head teacher Mark Malley founded Bellevue as
House Education in 2003. In that year Malley took over a “troubled” London
preparatory school, Norfolk House School, which had previously failed two
inspections by the Independent Schools Inspectorate. According to Bellevue’s website: “within
a year Mark had turned the school around, achieving an Outstanding inspection
report”.
In 2008 Norfolk House was joined by Weston Green School in
Surrey as part of House Education. The same year the company changed its name
to the Really Great Education Company.
In 2011 the company adopted the name Bellevue and began a
period of rapid expansion, acquiring or establishing a further six schools within
a year.
The period of Bellevue’s growth coincided with significant
investment which was made through its new chairman, private equity investor
Marwan Naja (appointed September 2010). Naja, who is a resident of Switzerland,
had previously worked as private equity manager at the Swiss private Pictiet Bank.
He left this position to set up his own private equity firm, Manixer, at around the same time that he
joined Bellevue as chairman. Bellevue is listed on Manixer’s website as
one of its investments.
3. Allegations of tax avoidance and money laundering
It has now emerged that Bellevue Education is part owned via
a company registered to the British Virgin Islands which was set up by the
Panamanian law firm Mossack Fonseca. The name of the company is Maplehill
Investments (BVI) and its owner is Tarek Obaid, the founder of Anglo-Saudi oil
company PetroSaudi. Through a complex ownership structure he is in fact the
biggest shareholder in Bellevue Education. The details of Bellevue’s ownership
are as follows:
- Since 2010 Bellevue Education Group has been a wholly owned subsidiary of Bellevue Education International Limited.
- Bellevue Education International’s shares are held by three parties. The company’s most recent annual return shows that Bellevue founder Mark Malley owns 1,000 shares but the majority of the company is owned by two Hong Kong registered subsidiaries: Plato One Ltd (18,576 shares) and Plato Two Ltd (29,096 shares).[1]
- The anti-corruption group the Sarawak Report has revealed that both Plato One and Plato Two are owned by Maplehill Property Limited and Patrick Mahony, who is also a director of Bellevue Education Group and Bellevue Education International (see below).
The Sarawak Report alleges that Bellevue chairman Marwan
Naja set up this complex ownership structure in 2010 for tax avoidance
purposes. They cite a document from 2010 in which Naja reported that he had:
“taken specific tax advice from a
firm of internationally recognised accountants which has confirmed to him in
writing that no Tax will be payable.. as a result of any dividends, distributions
or other returns. whether during the Investment or following an exit from the
Investment”
Furthermore, the Sarawak Report claims that Bellevue
Education was also a vehicle to hide money which Mahony and Obaid had obtained
in “illegal backhanders” from a Malaysian development fund. The allegations made
by Sarawak are as follows:
“The re-structuring and
re-branding of Bellevue took place in late 2010, after a major initial
injection of five and a half million pounds from the new secret investors
[Mahony and Obaid], who engaged Marwan Naja to represent their interests,
according to documents obtained by Sarawak Report.
The two PetroSaudi directors [Mahony
and Obaid] agreed to make available more cash when needed to expand the project
and we have evidence they raised over £20 million (RM110 million) in share
capital and lending over the course of the next few months.
The cash flow became available
not long after both men received large sums of money directly into their
private JP Morgan Suisse bank accounts from the now fugitive Malaysian
businessmen Jho Low, which was termed as a payment for their role in
“brokering” the billion dollar 1MDB PetroSaudi joint venture in September 2009
– from which Low siphoned out US$700 million into his private company Good Star
Limited.”
4. Reporting by the Sunday Times
On 10 April the Sunday Times published some of Sarawak Report’s
findings, highlighting Tarek Obaid’s stake in Bellevue via Maplehill Investments.[2] However,
the report left out all references to the alleged roles played by Marwan Naja and
Patrick Mahony in setting up and investing in Bellevue Education.
Bellevue Place Education Trust’s (BPET) response to the Sunday
Times piece was published on its website.
It contained the following assertions (emphasis added):
·
“The Trust was established by two parties,
Bellevue Education and Place Group. The
Trust’s governance structure is clear as to the structure and who the members
and trustees are.”
·
“The Trust is a separate, independent organisation
from Bellevue Education that is solely focused on offering high quality
education provision to its pupils.”
·
“Bellevue Place Education Trust wishes to be
very clear that the Bellevue shareholder who made an investment in Bellevue
Education via a company registered by Mossack Fonseca in the British Virgin
Islands has no connection with the Trust.”
·
“Bellevue Place Education Trust is an
independent charitable organisation, with six trustees, of which one is Mark
Malley.”
The DfE’s full statement in response to the Times story was also
published on BPET’s website, it included the following assertions (emphasis
added):
“We demand the highest moral and
professional standards from anyone involved in educating our children and, in
common with every free school proposal, Bellevue Place Educational Trust (BPET)
was subject to detailed scrutiny. We are clear that no-one will be handed
control of a school unless we are entirely happy with the result of the checks.
Bellevue Education and BPET are
separate organisations. Our records show the individual named is not
in any way involved in the governance of BTEP schools. There are strict rules
that prevent free schools and academies being run as for-profit organisations.”
Both statements tacitly acknowledge that Tarek Obaid is a
major shareholder in Bellevue, while simply denying his influence over the
governance of BPET. However, neither statement seeks to address or deny the
possibility, as claimed by the Sarawak Report, that Bellevue Education has been
used as a vehicle for tax avoidance and that its chairman, Naja, and one of its
directors, Mahony, are heavily implicated in this.
Furthermore, the statements make a series of assertions
about the independence of the trust (BEPT) from Bellevue Education. On the basis
of the evidence below we believe that it is not accurate to describe BPET as “a
separate, independent organisation” from Bellevue. There are also serious
questions to be asked about the potential influence of Bellevue Education and
its directors over BPET.
5. Connections between Bellevue Education and PetroSaudi International
Patrick Mahony – the individual identified by the Sarawak
Report as co-owner of Plato One and Plato Two – is director and “Chief
Investment Officer” at both Bellevue Education Group and Bellevue Education
International. He is also a director, along with Tarek Obaid, of Petrosaudi
Energy and Trading (UK) Ltd – a UK-based arm of PetroSaudi International,
the oil company founded by
Obaid.
Both Bellevue Education and Bellevue Education International
have the same correspondence address as Petrosaudi Energy and Trading (UK) Ltd.
This is also PetroSaudi’s UK address.[3] These
details can be seen in the following screenshot (taken 12/04/16) from Companies
House:
6. Bellevue Education and Bellevue Place Education Trust
Bellevue Place Education Trust, the legal entity running
state funded free schools, claims that it is “a separate, independent
organisation from Bellevue Education”. However, there are strong reasons to
question this.
6.1. Evidence that Marwan Naja is a member of the academy trust
Academy trusts comprise members and trustees and in some
cases have local governing bodies for their schools. The role and rights of
members is analogous to that of shareholders. The members can control changes
in the constitution (subject to DfE approval) and other fundamental decisions
relating to the academy trust. Members also have the right to remove a governor
(also known as a director or trustee) by ordinary resolution (a vote passed by
a simple majority of members).
According to Bellevue Place Education Trust’s own
website, Marwan Naja is a member of the company, alongside Mark Malley.
This is also reflected in the trustees’
report and financial statements for the year ended August 2015 (p.1):
In fact Bellevue Place Education Trust’s Articles
of Association (p. 14) require that the members of the company include both
the Chairman and the Chief Executive of Bellevue Education. These two posts are
currently occupied by Marwan Naja and Mark Malley respectively, and this was
also the case when the articles were included in the Trust’s Master Funding
Agreement signed on behalf of the Secretary of State for Education in June
2013.[4]
6.2. Two of Bellevue Place Education Trust’s six trustees are part of Bellevue Education’s “leadership team”
Bellevue Place Education Trust’s six trustees include Mark
Malley but he is not the only individual with strong links to Bellevue
Education. Current trustees
of BPET also include Steven Wade who is “Schools Director” of Bellevue
Education. He is referred to on the Bellevue website as part of the company’s leadership team,
along with Mark Malley and Marwan Naja (see Appendix).
It should further be noted that BPET’s Articles
of Association state that both Bellevue Education and Place Group may each appoint
up to five Directors (trustees) of BPET (p. 21):
This in effect guarantees Bellevue Education a degree of influence
over the functioning of BPET. Since Bellevue Education is mostly owned by Tarek
Obaid though a Mossack Fonseca formed company, this should be a matter of
concern.
6.3. Bellevue Place Education Trust and Bellevue Education – evidence of joint working
Until the recent revelations about Bellevue Education’s
ownership, Bellevue Place Education Trust (BPET) has consistently emphasised
the importance of the connections between BPET and Bellevue Education. This is particularly
evident in the successful free school applications which BPET made to the DfE.
For example, BPET’s first free school application,
for the school now known as Rutherford House in Balham (then known as Balham
Free Primary School – BFPS), contained the following statements:
·
“Bellevue will make available its expertise in
independent education to support the school. It will also seek to share
resources and where appropriate, facilities with the school.” (p. 7)
·
“With input from Bellevue Education's expertise,
and consultant leadership, we will combine the best from the independent and
state sectors.” (p. 21)
·
“Arising from the involvement of Bellevue
Education, there will be joint productions in the school calendars of BFPS and
Wandsworth Prep, and collaboration regarding wider events. As mentioned
elsewhere, shared CPD will take place across the staff teams as well as shared
use of facilities at Wandsworth Prep. As part of Bellevue's corporate social
responsibility programme, a suitable minibus will be available for BFPS use at agreed
times.” (p. 39)
BPET’s application to open Whitehall
Park School in Islington (opened in 2014) stated:
“In addition, there is direct
school leadership experience of opening a state funded independent school,
consultant leadership, expertise in school effectiveness and efficiency, and
input from the Bellevue Group of successful independent schools.
“
“
BPET’s application for Braywick
Court free school which also opened in 2014 said the following:
“Both Place Group and Bellevue
employ highly experienced school financial management professionals who have
taken key roles in the planning, pre-opening and post-opening operations of
several free schools and academies.”
6.4. Financial transactions between Bellevue Place Education Trust and Bellevue Education
BPET’s financial statements reveal a number of transactions
between the trust and Bellevue Education. During the year ended 31
August 2014 the directors of Place and Bellevue Education contributed the
following sums to BPET (p. 38):
In the same year BPET paid £5,705 to Bellevue Education for the supply
of “monitoring information” (p. 38):
In 2015
BPET paid Bellevue Education £37,701
for the provision of school improvement services (p. 4):
APPENDIX: Bellevue Education Leadership Team
(Accessed 12.04.16: http://www.blvue.com/about-us/our-leadership-team/)
[1]
Available to download here: https://beta.companieshouse.gov.uk/company/08028529/filing-history
[2] Jon
Ungoed-Thomas and Josh Boswell, ‘Saudi oil tycoon revealed as investor in
schools company’, Sunday Times,
10.04.16. http://www.thesundaytimes.co.uk/sto/news/uk_news/National/article1686389.ece
[3] This
can be seen on PetroSuadi’s website
which, as noted by the Sarawak Report, also shows that Marwan Naja’s investment
firm Manixer has the same address
as PetroSaudi’s Geneva office.
[4]
See pages 88-89 of the Master Funding Agreement. It can be downloaded here: http://www.education.gov.uk/cgi-bin/schools/performance/school.pl?urn=139775
2 comments:
Does money-laundering count as a 'relevant skill' for the new Tory definition of what a school governor needs to bring to the table?
Mike Hine
Yes, it's on the governor exam.
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