In an official letter from HMRC to French authorities regarding suspected money laundering and tax fraud by the UK telecoms giant, the Revenue refused to assist with a raid on Lycamobile’s premises, according to a report by Buzzfeed.
Nine people were charged and 19 arrested on suspicion of money laundering and tax fraud after French police raided the company’s offices in 2016. At the time, Lycamobile was the biggest corporate cash donor to the Conservative Party.
The Tories came under fire for continuing to accept donations of more than £870,000 from Lycamobile while it was under investigation.
In an official response dated 30 March 2017, a HMRC official noted that Lycamobile is “a large multinational company” with “vast assets at their disposal” and would be “extremely unlikely to agree to having their premises searched”, said the report.
The letter from HMRC to the French government added, “It is of note that they are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012”.
A spokesperson for HMRC admitted it was “regrettable” but that, “HMRC always investigates suspected rule breaking professionally and objectively and is never influenced by political considerations”.
The Revenue further defended its decision not to participate in the raid, saying that, “The application contained insufficient detail to satisfy the legal requirements to secure a warrant.
However it added that, “HMRC continued to liaise with the French Authorities” after rejecting the request, in order “to explain the statutory requirements for a UK search warrant”, adding that it even “offered to meet the French Judge face to face” to explain them.
A Conservative Party spokesperson said, “All donations to the Conservative Party are properly and transparently declared to the Electoral Commission, published by them, and comply fully with the law.” But did not confirm whether the Party was aware of the letter at the time.
The raid is another blow to Lycamobile, after its auditors KPMG resigned last year saying it was unable to obtain “all the information and explanations from the company that we consider necessary for the purpose of our audit”.
A row then broke out between the Big Four firm and its former audit client over whether it resigned or was pushed.
KPMG said that its relationship with Lycamobile had been a struggle from the moment it took over the audit from EY in 2014. EY had also resigned but said in its resignation letter that there were no circumstances that needed to be brought to the attention of company members or creditors.