Prince Andrew held his shares through a government-backed shell company that was created to hide real investments from public scrutiny.
The prince was among at least five members of the royal family who used the shell company Bank of England Nominees, which was set up in the 1970s to prevent “Shameful” public disclosure of Queen Elizabeth II’s investments.
The monarch successfully lobbied the government to amend a bill to allow the Windsors to hide the size and value of their shares from the public. The shell company operated for more than 30 years.
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The Guardian has established that the queen was not the only royal to use the facility. Her sister Princess Margaret, her husband Prince Philip, and her sons Charles and Andrew also held shares through Bank of England nominees.
Andrew’s use of the fictitious company, which has not been previously reported, is significant because he was a “special business envoy” for the government at the same time. Through this role he would have had access to commercially sensitive information.
Transparency rules designed to expose potential conflicts of interest require government ministers and members of parliament to publicly disclose any significant stakes they hold.
However, royalty is not subject to similar rules. There is no suggestion that Andrew used business information inappropriately, but the concealment of his investments raises questions about government oversight of potential conflicts of interest.
In 1973, a bill to make corporate actions more transparent would have he allowed public scrutiny of the queen’s finances. The archived documents revealed that the queen’s personal lawyer “frightened off” at the proposal and warned the government that the monarch did not want the public to find out what shares she owned because it would be “embarrassing”.
The palace secretly pressured the government to “find a way out” of the dilemma. The solution involved a clause quietly inserted into the legislation that allowed the government to exempt specific companies from the requirement to declare the identity of certain categories of shareholders, such as heads of state, foreign governments and international organizations.
That, in turn, paved the way for Bank of England Nominees, the shell company created in 1977. For more than three decades, the scheme prevented the public could detect which of the shares owned by the shell company were held specifically in the name of the British monarch or her family, as opposed to other heads of state or foreign government officials.
New documents obtained by The Guardian show the scheme was shut down in 2011 by the government after Whitehall officials described it as “anachronistic” and “difficult to defend”.
The Department for Business, Energy and Industrial Strategy released the documents only after a two-year delay following the threat of legal action by the freedom of information watchdog, the information commissioner.
They show that between 2006 and 2010, Andrew and the queen used the shell company to get their shares.
At the time, Andrew was the government’s trade envoy, tasked with promoting UK business interests abroad.
He resigned in 2011 after a series of revelations about his close ties to unsavory businessmen, including American billionaire Jeffrey Epstein, and foreign dictators.
His suitability for the role came into question after it emerged that he had taken a holiday with a Libyan arms smuggler, criticized a Serious Fraud Office investigation into corruption involving arms giant BAE and had lunch at the Palace of Buckingham with a leading member of the deposed Tunisian. dictatorship.
Rose Whiffen, senior researcher at anti-corruption campaign group Transparency International, said of the Guardian’s revelation that Andrew used the shell company to mask his investments: “Trade envoys are aware of inside knowledge, so transparency is key to reveal possible conflicts of interest so that they are duly addressed”.
A palace spokesman said: “We would not comment on private investments by members of the royal family. They are managed by independent investment managers without the day-to-day involvement of members of the royal family.”
Charles and Prince Philip stopped using the shell company in 2007 and 2008, respectively. The Queen’s sister, Margaret, also used the scheme, as did the financial specialists who managed her estate after her death in 2002.
The documents do not specify which shares each of the royals held, nor their value.
In 2011, Vince Cable, the then business secretary, scrapped the plan. Before doing so, his officials advised him to call the queen’s top adviser.
One official wrote: “We understand that members of the royal family still hold stakes in UK public companies and unless they and everyone with an interest in them are specifically exempted, these stakes should now be made public if the companies in question request. for beneficial ownership details.
“It is not clear if the royal family advisers are aware of the removal of the exemption or if they understand the implications.”
It is not known how the royal family responded to the closure of the shell company in order to continue to keep its shareholdings secret. The spokesman said his private financial arrangements “remain as private as they would be to anyone else.”