Pandora Papers: Corinna Larsen planned to bequeath 30% of the income of a Hispano-Saudi fund to the former Spanish king Juan Carlos I | United States
Corinna Larsen, who was once in a relationship with the King Emeritus of Spain, Juan Carlos I, planned in 2007 to call on the New Zealand leaders of a trust called Peregrine to bequeath the income of an investment fund to the former monarch of the case of his death. According to unsigned documents seen by EL PAÍS, the plan called for the delivery of “30% of the income from the Hispano-Saudi Investment Fund”, which the former head of state had sponsored and for which Larsen had worked. The papers were created on March 27, 2007, 14 days before the fund created by the two countries was registered in the Channel Islands, which are a tax haven. Larsen’s lawyer claims the documents are false.
The details of the structure of this arrangement are part of the Pandora Papers, a collaborative investigation of several international media outlets coordinated by the International Consortium of Investigative Journalists (ICIJ). In two years, more than 600 journalists from 117 countries analyzed 11.9 million files from 14 law firms specializing in the creation of offshore companies in tax havens. These types of offshore companies are legal as long as the owner declares them in their country of residence. The problem begins, in the eyes of the authorities, when what they seek is anonymity and tax evasion. In Spain, EL PAÍS and the television channel La Sexta have sought out in the public eye the Spaniards who have taken advantage of the most opaque jurisdictions in the world. The result is more than 700 companies linked to Spain, including dozens of prominent figures.
The financial instrument such as the aforementioned Peregrine, a trust or a fiduciary fund, is a particularly opaque contract by which a testator leaves the entirety of his estate or parts of it entrusted to the good faith of his legal representative ( the beneficiary) so that, in specific cases and deadlines, it is transferred to another person or invested according to the testator’s instructions. Trust funds are commonly used instruments offered by Swiss banks and asset managers to people with significant wealth who seek tax avoidance, security and confidentiality.
From the documentation it appears that in 2007 Corinna Larsen asked the Panamanian law firm Alcogal to send a letter to Bachmann Trust Company (New Zealand) Limited, the trustees in charge of the management of her Peregrine Trust. , and who registered Juan Carlos I among the people who should receive the assets included in this financial instrument in the event of Larsen’s death.
As indicated in the letter, which is unsigned, Larsen expressed his wish that in the event of death, the assets of the Peregrine Trust be divided “equally” between his two children: Nastassia Gioia Adkins and the “prince” Alexander zu Sayn-Wittgenstein-Sayn. Among the beneficiaries, Larsen added “His Majesty King Juan Carlos I Borbón de Borbón, born January 5, 1938 and residing in the Zarzuela Palace in Madrid”. The letter then set out the goods to which the king should be entitled. “I wish that the directors see fit to distribute to His Majesty King Juan Carlos I Borbón de Borbón 30% of all income coming solely from the Hispano-Saudi Investment Fund. Following the liquidation of the Hispano-Saudi Investment Fund, His Majesty King Juan Carlos I Borbón de Borbón should no longer be considered a beneficiary of the trust.
The document, dated 2007, concludes: “It is my intention that this memorandum expressing my wishes will remain in effect until it is canceled or amended with my own hand. In the event of death, I would like the wishes of the aforementioned persons to be taken into account. The contents of this document should not be disclosed to third parties and should be considered at all times as a private matter between us. Truly.”
It is not known whether or not this is a draft, given that among the files of the Panamanian company Alcogal is an almost identical document, created a few minutes after the first and in which the space where the Juan Carlos I’s name is left blank and instead there is a reference to a “Mr. X”. It is not known which formula was actually used, in case the plan was implemented. What the document indicates is Larsen’s apparent desire that Juan Carlos I receive a future portion of the income from the Hispanic-Saudi Investment Fund, income on which the letter does not provide further details.
Juan Carlos I’s name also appears in article 18 of the statutes of the Peregrine Trust, alongside those of Larsen’s two children. In this section, dealing with the rights and obligations of beneficiaries, he is referred to as “His Majesty King Juan Carlos Borbón de Borbón”. On the last sheet of the 21-page document, Larsen writes her name under the stamp “signed and delivered” as “Princess Corinna zu Sayn-Wittgenstein”. This document is also unsigned.
What is the fund referred to in this document that apparently could have provided Larsen with income that would have been partially transferred to Juan Carlos I in the event of his death? In 2007, Larsen, a Danish businesswoman and consultant of German descent and former wife of a German aristocrat Prince Casimir zu Sayn-Wittgenstein-Sayn, actively participated in the founding of the so-called Hispano-Saudi Infrastructure Fund (Fondo de Infraestructuras Hispano-Saudí), which was announced in April 2006 in Riyadh during an official visit of the Spanish monarchs, Juan Carlos I and his wife, the former Queen Sofia and a group of Spanish business leaders. The fund was jointly managed by UK asset management firm Cheyne Capital and Swiss firm Arox Infrastructure. The former appealed to US investment bank Morgan Stanley to attract investors among Spanish lenders and companies interested in participating in an ambitious and large-scale infrastructure project in Saudi Arabia, whose AVE link from Mecca was the most emblematic part.
The idea to create this fund came from the then Minister of Foreign Affairs, Miguel Ángel Moratinos, and Juan Carlos I himself, according to sources close to the former minister and the King Emeritus. “We needed to strengthen relations between Spain and Saudi Arabia; our investments there were very small and we already had big companies here, ”said a former minister in the government of the Socialist Party of former Prime Minister José Luis Rodríguez Zapatero, who helped create the fund. “The king said, ‘We have to do something.’ And we decided to create a fund for the two countries that would guarantee future investments. It was a huge opportunity and the Saudis had to represent the majority. It was a joint initiative of the Ministry of Foreign Affairs, the Royal Household and the Ministry of Industry.
On June 14, 2007, the late Saudi monarch Abdullah bin Abdulaziz visited Madrid for the first time and was named a Knight of the Order of the Golden Fleece by Juan Carlos I, the badge of a knightly order 15th century and the highest decoration awarded. by the Spanish Royal House. During this meeting, the Hispano-Saudi Investment Fund was officially unveiled with 14 Spanish companies signing the agreement in its initial phase. Corinna Larsen, unknown to the general public at the time, was also present at the ceremony because her romantic relationship with the head of state at the time had not yet been revealed.
The Hispano-Saudi Investment Fund had planned investments of 4.125 billion euros to carry out joint projects between the two countries in the fields of infrastructure, new technologies, industry, energy and defense in Saudi Arabia, the Middle East and North Africa. Some 14 Spanish companies have agreed to invest in the fund. Saudi Arabia did not make the expected contributions and, as a result, the fund was eventually dissolved. “The Saudis let us down. They put a man in charge who was not up to the task. When the required amount was not reached, he bent, ”recalls the former government minister involved in the launch of the fund.
The Hispano-Saudi Investment Fund was dissolved in 2010 and its managers sent invoices for their services and expenses to large companies on the Spanish stock exchange Ibex 35 that had signed up to participate in the project, according to former executives involved. in the investment agreement. A year after the fund was created, the Saudi Ministry of Finance transferred $ 100 million (65 million euros according to the exchange rate at the time) into an account belonging to the Panamanian foundation Lucum, held at the bank. Swiss Mirabaud & Cie and whose main beneficiary was Juan Carlos Ier.
The order for the transaction was given by then-king Abdullah bin Abdulaziz and, according to account manager Arturo Fasana, was presented as a gift or donation. Swiss prosecutor Yves Bertossa has charged Larsen with alleged money laundering offenses following the discovery of the transfer. Bertossa is also studying whether this deposit is linked to the construction of the AVE rail link between Medina and Mecca, a project carried out by a consortium of Spanish companies.
Juan Carlos I is currently under investigation by the prosecutor of the Spanish Supreme Court in connection with allegations of bribes resulting from the construction of an AVE high-speed rail link from Medina to Mecca, and for other alleged offenses, including bribes, interfering with the course of justice, trading in influence and tax evasion. Javier Sánchez Junco, the crown prosecutor emeritus of the king, refused to answer the questions sent by EL PAÍS.
Robin Rathmell, Larsen’s lawyer in London, denies the existence of this plan and claims the documents are false. “There are unfounded rumors circulating that Juan Carlos was the beneficiary of a structure relating to Corinna zu Sayn-Wittgenstein,” he said in a statement. “These rumors came from forged documents. Evidence showing that these documents were fabricated was presented to Swiss authorities in 2019. This will also be dealt with in the harassment case my client is pursuing in England against Juan Carlos.
A business matrix
Bachman Group Ltd, the company that managed the Peregrine Trust owned by Corinna Larsen, is part of a group owned by the Geneva-based Ardel Trust, which specializes in asset management and the establishment of trusts and offshore financial structures. . In 2013, Ardel Trust Company was acquired by fund management service provider JTC Group.
In the 21-page articles and by-laws of the Peregrine Trust, dated 2007 and containing the rights and obligations of the directors and trustees of the fund, the names of Bérénice Guignard Nava, on behalf of the Bachman Group and who is currently an executive of the company Ardel Trust in Geneva, and Martin Pugh appear.
The threads of Larsen’s trust fund are hard to untie. Ardel Trust Company also managed Peregrine 55, another fund linked to the Peregrine Trust which was dissolved in 2013.
The letter written by Larsen, a professional consultant, giving instructions for the distribution of the assets of the Peregrine Fund, was addressed to the Bachman Trust Company (New Zealand) Limited, Auckland. In addition, Bachman Group Ltd had offices in Guernsey, Switzerland and the United Kingdom.