'Kleptocracy Tour': Visit London's luxury homes linked to money laundering

The skyline of the City of London and the Canary Wharf financial district on May 6, 2016.
The skyline of the City of London and the Canary Wharf financial district on May 6, 2016. PHOTO: REUTERS

LONDON (AFP) - A black bus winds its way through some of London's most expensive neighbourhoods for a sightseeing tour with a difference - a guided visit around luxury houses bought by shady international tycoons and officials.

The "Kleptocracy Tour" was set up by anti-corruption campaigner Roman Borisovich, who aims to expose dirty money fuelling the high-end London property market and the teams of British "enablers" who make it happen.

"The idea behind the tour is to attract public attention to the fact of massive money laundering through properties in London," Borisovich told AFP on the tour this week, ahead of an international anti-corruption summit being hosted by Prime Minister David Cameron.

With a group of British lawmakers, campaigners and media on board, the bus drove past prime London real estate - from mansions in leafy, gated complexes to hotels to luxury pads in tourist hotspots.

One of the stops is a six-bedroom house with an indoor pool on a private road near Hampstead Heath in north London that used to belong to James Ibori, the ex-governor of Nigeria's oil-rich Delta State.

Ibori pleaded guilty to 10 counts of money laundering and conspiracy to defraud in a British court in 2012 and is serving a 13-year sentence.

"The view of corruption is that it's a problem of developing countries," said Saira O'Mallie from the ONE Campaign set up by U2 frontman Bono, which co-organised the bus tour.

"But actually we realise that the UK and many European countries and the US facilitate that corruption... It's right under our noses."

More than 36,000 properties in London are owned through offshore firms, which own a total £122 billion (S$241 billion) worth of property across England and Wales.

Buying properties through offshore companies can be a way of hiding the true owners and avoiding taxes.

The system - laid bare last month in the leaked so-called Panama Papers, a portion of which was released online Monday - has been used by the world's super-rich to buy tracts of London real estate.

In a speech last year in Singapore, Cameron promised to crack down on the use of London property to launder money, saying: "There is no place for dirty money in Britain."

The government subsequently launched a consultation on proposals to require foreign companies to provide information on their beneficial ownership before buying land or property in England and Wales.

There is speculation that Cameron will announce measures to this effect at Thursday's anti-corruption summit - a move that campaigners and the industry alike would welcome.

"The government's proposals for property ownership transparency could mean that it's no longer possible to secretly own property in the UK," said Eleanor Nichol of campaign group Global Witness.

"If properly implemented, this will be a big problem for anyone wanting to launder money here." However, she warned the measures must be introduced soon - within a year - and apply to all existing properties, as well as future purchases.

More than £180 million worth of property in Britain was investigated as suspected proceeds of corruption between 2004 and 2014, according to Transparency International, which says this figure is just the "tip of the iceberg".

Luke Harding, a journalist with The Guardian newspaper who helped analyse the Panama Papers, said the shock for him was the realisation of the extent of the enabling role played by British intermediaries.

"The UK has become Monaco with fog," he said, after addressing the bus tour.

The leaks "reveal a kind of fundamental truth that was hidden in plain sight - that the global rich stopped paying taxes a long time ago", Harding said.