The millions of pounds in loans helped Zahawi and his wife buy properties across Britain, including commercial and retail properties in London, Birmingham, Brighton and Walton-on-Thames in Surrey. The Observer found that new loans to property firm Zahawi and Zahawi were reported in the same year that an offshore family company linked to the chancellor sold shares in YouGov, the polling firm he founded, transferring £26m to an unknown recipient or recipients. A source close to Zahawi insisted there was no link between the money transferred from the offshore company, Balshore Investments, and unsecured loans to his family property company, Zahawi and Zahawi. A spokesman said: “Nadhim and his wife have never been beneficiaries of offshore trust structures.” The chancellor has been embroiled in a growing controversy after the Observer revealed last week that a “flag” had been raised by officials over his financial affairs. He is fielding calls to locate the lender or lenders who helped finance his real estate company. Zahawi, who was ruled out of the Conservative leadership race on Wednesday, said last week he always paid his taxes and was ready to answer any questions after reports he was under investigation by HMRC. The chancellor said he had not been informed and was not aware of any investigation. Zahawi, 55, built his career as an entrepreneur co-founding polling and market research firm YouGov in 2000. Tax experts, however, are baffled as to why he was not initially allocated shares in the company, despite being one of the driving forces her powers. While YouGov co-founder Stephan Shakespeare received 351,590 shares in the company’s founding year, Zahawi received none. Instead, the shares were given to Balshore Investments, a Gibraltar-based offshore company controlled by his parents. It has been reported that Zahawi relied heavily on the support and guidance of his father, who was an experienced businessman. YouGov’s shares were sold to Gibraltar-based Balshore Investments. Photo: Tim Rooke/Rex/Shutterstock The small company in Gibraltar turned out to be a corporate goldmine as YouGov’s shares rose dramatically in value. In 2002, the company had assets of just £36,280, but this rose to £7m by 2010 and £26.5m by 2017, according to its company accounts. It also received more than £700,000 in dividends between 2012 and 2017. The main assets were YouGov shares, but these were sold in 2017-18 and around £26m was transferred out of the company to an unknown or undisclosed recipient. YouGov has described Balshore Investment 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”. YouGov built its reputation on internet-based research, floating on the London Stock Exchange’s AIM market in 2005. Zahawi was chief executive and director of YouGov until 2010, when he was elected a Conservative MP. Zahawi and Zahawi was founded in 2010 and used unsecured loans on top of bank debt to buy real estate. Its borrowing rose from £185,831 in 2015 to almost £40m in June 2018, including £11.4m in bank loans and £26.6m in unsecured loans. The chancellor stepped down as a director of the company in 2018 and his wife now controls the company. Its investment properties are £58m, with current liabilities of £55.5m. Dan Neidle, founder of the nonprofit Tax Policy Associates, said Zahawi should provide more information about the source and repayment arrangements of the loans that had financed his family’s real estate company. “The chancellor is ultimately responsible for the UK tax code,” Neidle commented last week in an analysis of the Zahawi family’s business interests. “The public has a right to know whether there are specific and unambiguous provisions of this code from which the chancellor personally benefits.” Pat McFadden MP, Labour’s shadow general secretary to the Treasury, said: “It is vital that the Chancellor makes clear exactly what arrangements he has exploited in his financial affairs and where this money has been borrowed from. “The public has a right to know. Labor will abolish non-domicile status to create more fairness and transparency in the tax system.” Zahawi was kicked out of the Conservative party leadership campaign last week after receiving 25 votes in parliamentary elections for the party. He promised during his campaign that he would publish his tax return every year if he became prime minister. A spokesman for Nadhim Zahawi said: “Nadhim and his wife have never been beneficiaries of offshore trust structures and have not held any property through offshore tax structures. Any suggestion that Nadhim has avoided taxes through offshore structures is false.”