“Australia’s water buy-backs scheme was designed to help drought-stricken farmers and our vital ecosystems, not to deliver a large profit for investors in a Caribbean tax haven.
As the legal threats are swirling, we will carefully detail what we know so far – and what we don’t know – but firstly, we can reveal today:
Australian authorities, presumably people working with then Water Minister Barnaby Joyce, dealt directly with the Cayman Islands company, Eastern Australia Irrigation (EAI), to strike the $80 million sale,
The Commonwealth Bank was involved as a financier to the Caymans company which made the profit,
The Tax Office investigated its Australian subsidiary EAA for tax avoidance structures with parent company EAI which were in place when Angus Taylor was a director of EAI. EAA later settled.
Directors of EAI’s Australian subsidiary Eastern Australia Agriculture (EAA), which owned the water rights, valued these water rights at half the value at which they were sold in the year before they were sold.
This latest point goes to the view, espoused by a number of analysts, that the water licences were not worth much if anything at all (it was floodwater) and begs the question as to why authorities paid a record price when, the year before the sale, even the vendors valued the rights at half the price paid.
What we don’t know yet is the answer to the $80 million question: who are the shareholders and other beneficiaries who had a stake in the Cayman Islands entity Eastern Australia Irrigation?
There are no allegations of corruption in this story. It is not illegal to set up a Cayman Islands company, or to be a director of a company in the Cayman Islands which later became a beneficiary of a sale of water rights in Australia.
Angus Taylor had stepped down as a director of both entities before the water transaction occurred. Moreover, in response to questions put by Channel Ten’s The Project (disclosure: the author worked with The Project on the story), he said he had no financial interest in either company.
The questions remain, why would anybody set up a Cayman Islands company and act as a director for six years for no financial gain? And, as he was a founder and director, would he be prepared to disclose what he knows about the beneficiaries of the big water deal? We shall get to EAI later.”
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West, Michael. Michael West Media 21 April 2019.