Daft.ie backer used global vehicles for scheme

A New York venture capital fund that has a 25 per cent shareholding in the company behind Irish property website Daft.ie, made the investment via Luxembourg as part of its global structures.

An advanced tax agreement between the investor, Tiger Global, and the Luxembourg tax authorities, was negotiated by PwC Luxembourg.

In a letter dated May 21st, 2008, PwC wrote to tax official Marius Kohl about investments of up to $300 million that a Cayman Islands-based fund, Tiger Global Private Investment Partners V, part of the New York group, was planning to make through two new companies to be set up in Luxembourg.

Investment

The letter said it had already invested about €8.75 million in Daft Media, acquiring a quarter share of the Irish company, using the Luxembourg intermediary Tiger Holding Five.

The same company had made investments in businesses in Estonia, Australia, Poland and Israel, the letter said.

The PwC interpretation of how the Tiger Global investments would be taxed was accepted by Mr Kohl.

The Luxembourg accounts of Tiger Holdings Five show that in 2010 it received $1 million in dividends from Daft Media Ltd, and that in 2011 it received dividends of $569,589 and $1 million. Following a restructuring of the Daft media group, which now includes Boards.ie and Adverts.ie, Tiger Holdings Five changed its shareholding into a similarly sized stake in Distilled Media Group, the new holding company of the online publisher.

The Daft media group was started by brothers Brian and Eamonn Fallon, who are the major shareholders in Distilled Media along with Paul Kenny and Tiger Global. The Fallon brothers also own The Journal.ie

A spokesman for Daft said it did not want to comment, and there was no reply last night from Tiger Global in New York.

*In two articles which appeared on our website on November 7th, we stated that a New York venture capital fund which had negotiated Luxembourg tax agreements has a 25 per cent shareholding in the company which operates TheJournal.ie website. This is incorrect. The company which publishes TheJournal.ie informs us that it is not backed by any venture capital fund. The online articles have been amended.