Finnish bank tycoon Björn ‘Nalle’ Wahlroos has invested more than 140 million euros in Luxembourg companies, according to a database compiled by journalists for a French newspaper The world.
Wahlroos, chairman of the financial giant Sampo Group and of the forest industry company UPM-Kymmene, is a shareholder in at least five Luxembourg companies, three of which are listed as owners. Wahlroos has also invested in UK payday lending firm Auden Group Limited, the data shows.
Hundreds of Finnish companies and individuals have embarked on asset management in tax havens in Luxembourg, according to an investigative report by Yle MOT, who reviewed the list.
Other Finns who transferred financial assets to Luxembourg include Ilkka Herlin, heir to the Kone fortune but not involved in the family business, former chairman of Nokia Jorma Ollila, former CEO and President of Sampo Kari Stadigh and the Ehrnroot family.
Although the database also includes Mafia-owned companies and businesses associated with money laundering, there are currently no signs of unsavory deals from the Finns mentioned in the story.
A European tax haven
Luxembourg has long been considered a more “acceptable” tax haven than Panama or the British Virgin Islands. The ability for companies to make favorable deals with the aim of claiming tax breaks, a system that favors profit shifting and the discretion offered by the country have made Luxembourg attractive to many investors.
In the Grand Duchy, which has only 600,000 inhabitants, nearly 90% of businesses are currently owned by non-Luxembourgers.
member of the European Parliament Eero Heinäluoma (SD), who acts as a replacement on the tax matters subcommittee, called the database’s findings “shocking.”
“Luxembourg has been caught engaging in questionable financial activities in the past. The country has promised to change its practices, and to some extent it has,” Heinäluoma told Yle, adding that some of these practices had been replaced by new ways of avoiding taxes, resulting in lost income across the European Union.
“Luxembourg is not doing this in a vacuum, their actions affect the other 26 member states. The loss of tax revenue is in the order of one billion euros,” Heinäluoma explained, adding that he hoped that the members of the European Union will unite to fight for more transparency.
“When some refuse to contribute, others have to make up for the loss. With heightened awareness, the pressure on these countries will increase and their practices will become unsustainable,” he said.