Since becoming chancellor following the resignation of Rishi Sunak earlier this month, Zahawi has faced persistent questions about his relationship with a Gibraltar-based company, Balshore Investment, controlled by his parents. “As custodian of the public finances and custodian of the UK tax code, it is obviously important to reassure the public that your tax affairs are fully in order,” McFadden wrote. Balshore Investments was the recipient of shares in YouGov, the hugely successful polling company co-founded by Zahawi – while he received no shares in it. YouGov has described Balshore Investments as “a family trust of Nadhim Zahawi”. The chancellor insisted he “does not have, and never had, an interest in Balshore Investments and is not a beneficiary”. The Observer reported on Sunday that Balshore Investments sold £26m worth of YouGov shares in 2018, with the proceeds going to an undisclosed recipient. In the same year, the chancellor’s family UK property firm Zahawi and Zahawi, then controlled by him and his wife, received unsecured loans of £26 million from an unknown source. Zahawi and Zahawi used the loan to buy a string of properties across the UK. In his letter, McFadden asks Zahawi a series of questions about these transactions and the history of Balshore Investments, including “why did Balshore Investment receive 42.5% of YouGov’s shares at the time of its incorporation?” and, “the original YouGov accounts appear to indicate that you received no shares despite being one of the founders. Why not?” McFadden adds: “There is some link between the unsecured loans provided to Zahawi and Zahawi for her property investments and the £26m Balshore Investment may have made in capital gains as a result of the sale of stakes in YouGov ?” It also asks about reports that Zahawi’s tax affairs are under investigation, either by HMRC or the National Crime Agency – both of which Zahawi has strongly denied. In a statement released last week, Zahawi described the reports as “spots”. “Let me be absolutely clear. I don’t know that. I was not told this was the case. I have always declared my financial interests and paid my taxes in the UK. If there are questions, of course I will answer any questions HMRC have for me,” he said. Zahawi was kicked out of the race to become the next prime minister last week after receiving just 25 votes despite a well-organized campaign. Many of his colleagues were not thrilled with his decision to accept promotion from education secretary to chancellor when Sunak quit, before urging Boris Johnson to quit less than 48 hours later. Zahawi remains in place as part of Johnson’s caretaker cabinet – but ministers have collectively agreed that no major budget decisions will be made until a successor to the prime minister is appointed.
