Emmanuel Anassis’ first flight in his plane was to deliver unimix – a nutritional flour mix – to a starving village in Jonglei, South Sudan.
Vultures were waiting for the weakest to die before digging in while grossly malnourished children looked helplessly as some of their parents breathed their last.
Though Mr Anassis describes the situation in Jonglei as one of the “worst human catastrophes in modern-day history” it is what marked the beginning of an aviation empire the Canadian built in just two decades.Unicef, the United Nations arm that responds to emergencies involving children, had just contracted DAC Aviation for a fortune to help deal with the South Sudan emergency.
In a span of just 26 years, Mr Anassis’ global business has grown to operate about 30 planes in its Kenyan subsidiary alone, which is based in Nairobi’s Wilson Airport. It is, however, not Mr Anassis’ business prowess that caught the attention of the International Centre for Investigative Journalists (ICIJ) but the complex manner in which DAC Aviation has structured its business and the potential impact that it has had on the company’s tax obligations in countries of operation.
In Kenya, for instance, the Kenya Revenue Authority (KRA) has opened a tax assessment of DAC Aviation’s operations with a view to determining “suspected profit shifting through creative accounting.”UN agenciesFindings of the ongoing assessment are expected to offer insights into how the company has over the past two decades handled its Kenyan operations estimated to be worth billions of shillings from the numerous multi-million-dollar contracts it has won mainly with the UN agencies.
ICIJ says in a recently published report that DAC Aviation has, through aggressive tax planning, managed to book most of the revenues and profits in countries with lower tax rates, technically referred to as tax-efficient, instead of doing so where the actual business took place.ICIJ documents show that DAC Aviation has mainly used the servicing of loans borrowed to acquire aircraft to lower its tax obligations.
It all starts with DAC Aviation acquiring aircraft it uses to deliver humanitarian aid and to pay leases on the same aircraft to related companies in Mauritius.ICIJ’s Mauritius Leaks, as the latest round of the network’s investigations are known, received a trove of secret documents indicating how major investors in Africa like Anassis have channelled their businesses through the tiny island nation with the aim of avoiding full payment of taxes.
A 2012 discharge letter shows that it all started in 2005 when DAC Aviation got a loan from Eastern and Southern African Trade and Development Bank to acquire two Bombardier Dash aircraft via Trident Enterprises Ltd, a company incorporated in Mauritius.Commonly known as Trade and Development Bank or previously PTA Bank, the lender is owned by 18 countries, including China and the African Development Bank.