North Island Sale Imminent
Will stamp duty be forfeited as was the case at D’Arros?
WITH the sale of North Island imminent, Government will have to grapple with the issue of stamp duty payment, especially when an island is owned by a company registered in an offshore.
No stamp duty was paid on the sale in 1998 of D'Arros to French billionaire Lilianne Bettencourt allegedly for 60 million euros, because it was transacted through the transfer of shares in the D'Arros Island Establishment, registered in Lichstentein.
In the case of North Island, previously owned by the Beaufond family, it was sold to German Hans Gunter Papst in 1977 under the company name of North Island Co Ltd.
This means that no sale was recorded in the Government Lands Registry early this century, when it was acquired by the South African travel group “Wilderness Safaris”.
Two huge loans were obtained from Nouvobanq - one in 2004 for $3 million and another in 2007 for $2 million.
Andy Payne, CEO of Wilderness Safaris signed as borrower.
This means that loans were given by local commercial banks to foreign investors at the peak of the foreign exchange crisis - when local businessmen and traders had the greatest difficulty obtaining a few thousand dollars.
Wilderness Safaris had 11 villas and was reputedly the most expensive in Seychelles selling from $1,780 per person per night in the cheapest villa, all inclusive to $2,820 for the presidential villa.
Needless to say, the venture was highly profitable.
On the good side, the company re-injected some of its huge profits into environmental conservation. Rats have been completely eradicated. The endemic flora and fauna as well as endangered species have been preserved and villas blend well with the landscape, compared to some other 6-star monstrosities, which have turned environment upside down. North Island was said to be eco-tourism at its best.
North Island's 500 acres and golden beaches has attracted the attention of some tycoons, who have wanted to have it all for their own. One is Indian tycoon Sivaskaran, better known as Siva, who has purchased dozens of properties here since given Seychelles citizenship, including Therese and Conception islands. But his offer was turned down.
This newspaper has learned that after also turning down a potential Ukrainian buyer, a Russian group was entertained after making a huge offer Wilderness Safaris could not resist. Some of its shareholders had also wanted to cash in. One condition is that Wilderness Safaris will remain as the management company and that the ecological aspects of the island remain.
That will presumably spare North Island suffering the same dire fate as North East Point, where a huge box like building has been implanted near the beach.
In any event, government is said to be considering the sale. It will also have to pronounce itself on stamp duty, especially since North Island Co Ltd is registered in Victoria and not Lichstentein. The government must act to change the law so that whenever any property in Seychelles is changing hands stamp duty is collected in full.
Source: Lenouveauseychellesweekly 8-23-10