Red Bull, the Panama connection and Austria

The escape of jet-setting Red Bull heir Vorayuth “Boss” Yoovidhya, who is wanted in a deadly hit-and-run case involving his Ferrari and a Bangkok police officer in 2012, has led to revealing scrutiny into the soft drink conglomerate’s company network that involves several offshore entities which were seemingly used to give some of the Yoovidhya family’s deals more confidentiality – and also doesn’t leave out Red Bull’s Austrian co-owner Dietrich Mateschitz.

The Associated Press (AP), after combing the notorious Panama Papers for Red Bull connections, found that the Yoovidhya family operated a complex network of anonymous offshore companies in tax havens for more than two decades – set up by Panama law firm Mossack Fonseca — with whom they managed to keep the family name and Red Bull brand out of private property purchases and other deals.

For example: Maybe Thai police is unable to send the extradition request for Vorayuth to the right country because they can’t find his name and address in London’s telephone directory?

This is because the townhouse 42 Montpelier Square, Knightsbridge SW7 1JZ in one of London’s most prestigious neighbourhoods (one of at least four properties owned by the Yoovidhyas in the city) isn’t registered under the family’s name, but under a Karnforth Investments Ltd., a company incorporated in the British Virgin Islands, according to the Panama Papers.

The AP noted that even though the Yoovidhyas and Mateschitz own Red Bull, the 75-per cent shareholder of the energy drink’s UK business is another British Virgin Islands company called Jerrard Company Ltd, which, in turn, is held by a third offshore company, which controls a fourth, JK Fly, which again owns Karnforth.  The Yoovidhya family allegedly used this carousel to let money flow through it via reciprocal loans used to buy luxury properties and private jets in the name of the offshore companies, always using custodians and leaving their name and the Red Bull brand out.

While this is not per se illegal and can be referred to as tax optimisation, it is at least unusual that the Yoovidhyas placed such importance on the anonymity of their clan and brand.

The role of the Austrian part of the Red Bull empire is also interesting, to say the least. The Austrian Red Bull GmbH in Salzburg is the second shareholder of Red Bull Limited in the UK, holding 25 per cent, and co-owner Dietrich Mateschitz is one its directors. Thus, it can be assumed that Mateschitz knows about the corporate structure of Red Bull’s UK unit and that it is majority-owned by a British Virgin-registered company. Another senior Austrian Red Bull manager, Karl Sengstbratl, has been finance director of Red Bull Limited in London and also director of Yoovidhya’s London-based (now defunct) Siam Winery Ltd., so the information about offshore connections should have spread to Austria.

However, in an interview with Austrian newspaper Heute, published on April 8, 2017, asked how Red Bull handles tax issues, Mateschitz said (translated from German):

“We do not rank among the companies that use a dozen of entities to save taxes. We do not have a procurement firm in Hong Kong, no brand registration on the Cayman Islands, nothing in Panama or wherever. The global income [of Red Bull] is being taxed in Austria.”

In light of the above revelations, this seems not to be entirely correct, although Mateschitz probably spoke only for the income of his 49-per cent part of the company and not of Yoovidhya’s share of the cake.

Red Bull in the UK, according to latest available figures from 2015, made a post-tax profit of £15,751,735 on a turnover of £236,117,194 in that year.

Disclaimer: There is no indication that any of the mentioned persons or companies violated any tax laws.