Guest post by Corporate Watch: People behind Cuadrilla win state approval to keep identities secret

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In this guest post, Corporate Watch reveals that the UK fracking company, Cuadrilla, has used legislation designed to increase corporate transparency to hide the identity of the people who control it.

According to documents filed at Companies House, the four individuals that ultimately control Cuadrilla Resources Holdings Ltd, the UK-registered parent company of the Cuadrilla group, are using an exemption in the government’s ‘Persons of Significant Control’ legislation, introduced last year to protect their identities.

Previous disclosures have shown Cuadrilla is majority-owned by the investment fund Riverstone Holdings and the Australian mining group, AJ Lucas. But the attempt to withhold information raises questions about whether others may be involved.

The government introduced the register of Persons of Significant Control (PSC) in April 2016. Its aim, in the words of then Business Minister Baroness Neville Rolfe, was to:

“help tackle abuse of corporate entities. This is part of our commitment to creating an environment of trust and accountability for business.”

People with significant control are often referred to as the “beneficial owners” of a company. Under the new legislation, details of the human individuals (as opposed to companies) who can influence or control companies should be entered into a publicly-accessible register.

However, there are certain exemptions that people can use to protect their identities. Section 790ZG in the Small Business, Enterprise and Employment Act, which brought in the register, allows details to be withheld if the individuals can prove they are at risk of violence, intimidation or “targeting by activists”.

Government guidelines describe the exemptions as particularly suitable for people running companies involved in defence or animal testing, or if the company “has been targeted by activists”.

When asked for this article about the use of the exemption, Cuadrilla said it had been granted after the company provided evidence of “historic” and likely “ongoing threats” that left its controllers at “serious risk of intimidation”. A spokesperson said:

“We can confirm that in the Autumn of 2016 Cuadrilla made an application to Companies House to protect the names and addresses of Persons of Significant Control (PSC) with regard to Cuadrilla on the basis that having this information in the public domain would present a serious risk of intimidation to them.

“We followed the procedure set out by Companies House by submitting a statement and supporting evidence to demonstrate there had been historical threats and a strong likelihood of ongoing threats to those individuals. This was then independently assessed by the registrar and permission was granted to protect the relevant directors’ details. The information supplied remains confidential and not on the public record.”

Cuadrilla is one of a very small number of companies whose controllers have been granted protection in this way. Freedom of Information requests have shown that Companies House had accepted only five of 33 applications made for non-disclosure under exemption 790ZG in the 11 months between the start of the PSC regime in April last year to this February.

Legal protection for companies
In the late 1990s, the then Labour government introduced legal measures intended to protect companies from protesters, particularly if the companies’ activities were deemed significant to the national economy.

The arms and pharmaceuticals industries, in particular, started to use a range of legal processes to discourage protest and criticism. Measures previously used to protect companies from protest included the application of anti-social behaviour orders (ASBOs), the use of bail conditions by the police as a form of extra-judicial punishment, use of blackmail and harassment and extensive use of terrorist legislation (including as an intelligence gathering tool against activists entering or leaving the country), with protesters being identified as ‘domestic extremists’.

Training workshops, delivered to schools under the counter-terrorism strategy, Prevent, has linked anti-fracking campaigners to domestic extremism.

Who does control Cuadrilla?
Existing Companies House records show Cuadrilla is owned by Australian mining services company AJ Lucas (45%), the US investment firm Riverstone (45%) and the management team and employees (10%).

Riverstone is run by its two founders: the ex-Goldman Sachs financiers David Leuschen and Pierre Lapeyre Jr. Research by Greenpeace previously identified Kerogen Holdings as the majority shareholder of AJ Lucas. Kerogen is co-owned and run by Ivor Orchard, who is also a Cuadrilla director.

All of them could be PSCs, as could Cuadrilla chief executive Francis Egan. But these individuals are already publicly-known to be involved with Cuadrilla. If they had wanted to protect their address, they could have applied for another exemption, section 790ZF, that is more readily granted and allows for just that.

This raises the possibility that there are individuals behind Cuadrilla who have not yet been identified.

Companies House records show another two of AJ Lucas’ UK companies – Lucas Holdings (Bowland) Ltd and Lucas Holdings (Bolney) Ltd – have also applied for the exemption, which suggests it is people connected with AJ Lucas rather than Riverstone that want to stay hidden

There have previously been reports that the Chinese state-owned oil firm China National Offshore Oil Corporation (CNOOC) was linked to Cuadrilla through its major investment in Kerogen Capital.

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