Britain's deputy prime minister and Liberal Democrat leader Nick Clegg has been caught in a "cash for honours row” after two Indian-origin multi-millionaires, who are among the biggest donors to his party, have been lined up for honorary titles.
Political parties in Britain nominate candidates for the honorary titles. In Clegg’s case, his party Liberal Democrats (Lib Dems), has received cash donations from the two multi-millionaires to allegedly offer them honorary titles.
The Liberal Democrats, a coalition partners in the Conservative-led government in Britain, have recommended Sudhir Choudhrie for a seat in the House of Lords.
Choudhrie has personally donated £95,000, while his family companies have given the party at least £650,000 since 2004, says a report published in 'The Sunday Times'.
It also claims that until a few years ago the businessman was not domiciled in Britain for tax purposes.
The 65-year-old now lives in London. The newspaper reported that he came onshore two years ago and now pays full UK taxes on his worldwide income.
The Choudhrie family's portfolio includes C&C Alpha Group, which runs care homes for the elderly and people with learning difficulties and mental illness.
However, its ultimate parent company, Harberry Investments, is incorporated in the tax haven of British Virgin Islands.
Another multi-millionaire, Rumi Verjee, who brought the Domino's pizza chain to Britain, is top on the list of seven names compiled by the Liberal Democrats who are expected to be awarded honours within weeks. He has given £7,70,000 to the party since May 2010.
The disclosure may lead to accusations of hypocrisy against the Lib Dems, who have made crackdowns on tax havens and people who avoid tax a key policy priority.
Since 2010, it was made compulsory for British peers to be full-time resident of the UK. Several peers have given up their non-domiciled status to retain their seats.
Choudhrie has been on a shortlist of Liberal Democrat peers for months. His name is expected to be recommended to the House of Lords Appointments Commission in the next few weeks.
"New appointments to the House of Lords will be made in line with the coalition agreement and will be announced in due course. Appointments from all political parties must pass an independent vetting process," Clegg's spokesperson said.