From The Times, more about this odious money-grasping scammer.
Pleading from his sun-kissed Caribbean island for a taxpayer bailout for Virgin Atlantic, Richard Branson must rank as the least deserving tycoon in the Treasury’s long list of casualties asking for financial help. Pledging Necker, the shabby headquarters of his tax exile, as collateral for a £500 million government loan adds insult to injury.
Branson wants a loan from the same tax system he has spent his entire career avoiding. His justification for wanting our money is unimpressive, not least because the loss-making airline is nearly half owned by Delta, an American company.
The British love chancers and over the years Branson has both delighted and appalled millions of people as a self-made entrepreneur who has created and manipulated the Virgin brand through a wily media machine. Throughout a career launching dozens of businesses, including music, mobile phones, trains, health, wine, fashion and banking, his finances have been concealed in offshore tax havens — not only the Caribbean but also in Switzerland, which became the headquarters of his fortune-saving operation to license the Virgin brand.
Until now, the mystery has been whether his businesses are worth the £4 billion he claims and whether he deserved the accolade of Britain’s most successful tycoon. The same smokescreen was vital to his obsessive tax avoidance.
Penetrating the true value of Virgin has always been made impossible by his secrecy. Virgin Health, for instance, has consistently reported losses so no taxes are payable in Britain. Others, like Virgin Galactic, his failed bid since 2004 to send a rocket into space, are also huge loss-makers. Many businesses including Virgin Trains relied on securing government licences or monopolies by controversial methods.
Now he has hit the moment of truth. To rank alongside genuine tycoons such as Jeff Bezos and Elon Musk who have built proper rockets, Branson has always exaggerated his wealth. But it’s been mostly a hand-to-mouth illusion. The reality of Virgin Atlantic’s creation and survival has been nasty. Built out of a pernicious battle with BA and the humiliation of its then chairman Lord King, Virgin Atlantic has only survived because of its guaranteed privileges at Heathrow. Without the landing slots, the airline would be worthless.
Asking for a taxpayer bailout of a loss-making airline is offensive. Let it collapse. There are other British airlines such as Easyjet which could take over. As Branson said not so long ago, “Capitalism has lost its way”. He should rank among the casualties.
Existential questions are at the heart of this crisis. But few are more crucial than this: should the UK taxpayer bail out Sir Richard Branson? Or more specifically the airline he controls, Virgin Atlantic: one 49 per cent-owned by Delta Air Lines.
It’s such a hot topic that the Necker Island knight himself has penned a public appeal, masquerading as a blog to Virgin’s 70,000 staff. As he puts it: “I thought it was important for you all to know the actual facts.” For starters, the £4 billion figure bandied around for his “net worth” was “calculated on the value of Virgin businesses . . . before the crisis, not sitting as cash in a bank account”. Then, he says, he’s never taken “significant profits” out of the group, redeploying the cash in creating new businesses and jobs. To boot, he’s even offered to mortgage his Caribbean retreat as part of any rescue deal.
Indeed, as cash-strapped billionaires go, Sir Richard gives it his best shot. But the man who signed the Sex Pistols to Virgin Records can’t be surprised by some of the comments beneath his blog. They’re straight out of the Never Mind the Bollocks school — and with good reason, too.
Whatever way you look at it, Sir Richard is still a fabulously wealthy chap. Yes, as the owner of airlines, hotels, cruise ships, holiday companies and gyms, he’s in the eye of the Covid-19 storm. But he’s hardly skint. His latest stock market venture, the space travel group Virgin Galactic, is valued at $3.33 billion and he owns 51 per cent of it. His brand licensing business, Virgin Enterprises Ltd, pays him an annuity of around £90 million a year. His 13 per cent holding in Virgin Money is worth about £130 million. And he took more than $1 billion out of the Virgin America airline. Then there are his interests in private Virgin businesses, plus a property portfolio. He values Necker at $100 million-plus.
There’s money to be found, even if Virgin Australia collapsed yesterday, wiping out his 10 per cent equity stake. But there’s also another issue: is bailing out Virgin Atlantic a good use of taxpayers’ money? Sir Richard says he only wants a “commercial loan” and that he’s willing to invest $250 million across the Virgin Group, including a chunky sum in the airline. Yet look at its figures and it’s not the most inviting case for a mooted £500 million taxpayer loan.
The latest are for 2018, where the carrier had a pre-tax loss of £60 million on top of 2017’s near-£80 million losses. And the balance sheet hardly reassured: £1.55 billion of debt, gearing of 5.1 times and negative net assets of £20.1 million.
Yes, Virgin says the airline was heading for a return to profit this year. But it hasn’t made a profit since 2016. What hope post-virus? Will it be in any state to fulfil his promise that it would “pay back” a government loan? And why should the taxpayer step in for Delta, valued at $15 billion but finding it tricky to chip in because it’s taken US state support? The government is right to insist on a post-virus business plan and cash from the owners before entertaining any readies for Virgin Atlantic. And it doesn’t help that Sir Richard’s been here so recently with his shameless Flybe begging bowl act.
Another thing rankles, too: that despite his pledge to present “the actual facts”, there is arguably zero transparency over the Branson money trail that ends up in the parent company: Virgin Group Holdings, controlled by his family trusts in the tax-free British Virgin Islands. If he wants a bailout, he can lift the lid on that.
