Two Indian-origin donors to Britain's Liberal Democrat party have become embroiled in a cash-for-honours controversy.
Rumi Verjee, a multi-millionaire who brought the Domino's pizza chain to Britain, and Sudhir Choudhrie, who heads a major business empire, have donated thousands to the UK's coalition partner over the years and have now been named on the party's list of those in line to receive honours.
According to a 'Sunday Times' report, Verjee, a Ugandan-born Indian, has given 770,000 pounds to the party since May 2010 and is now top of a list of seven names compiled by the Lib Dems to be awarded a peerage in the House of Lords within weeks.
Choudhrie, whose family has donated 650,000 pounds to the party since 2004, has been placed on an internal party list of future peers. Until three years ago Choudhrie, who has personally given 95,000 pounds of that sum, was not domiciled in Britain for tax purposes.
Lib Dem leader and Deputy Prime Minister Nick Clegg has been campaigning for a crackdown on offshore tax-avoidance schemes and will face embarrassment because businesses operated by both the Verjee and Choudhrie families have links to foreign tax havens.
The Choudhrie family's business portfolio includes C&C Alpha Group, which provides services for the elderly and mentally ill. Its parent company is Harberry Investments, a company incorporated in the British Virgin Islands, a tax haven.
Verjee used a firm called Brompton Capital to donate to the Lib Dems. Until recently, Brompton was owned by Integro Nominees (Jersey) Limited, based in the Channel Islands, also a tax haven. It is now believed to have been brought onshore.
Verjee's name was one of those submitted by the Lib Dems to the House of Lords Appointments Commission earlier this month. The commission, which vets potential peers, is considering around 20 names put forward by the three main party leaders.
Until this month, Choudhrie's name had appeared on a draft honours list prepared by Clegg's office but party sources told the newspaper that "it has dropped off the shortlist and is now on a longlist".
Senior Lib Dems have been highly critical of those who base their companies offshore and business secretary Vince Cable has described tax havens as "sunny places for shady people".
British Prime Minister David Cameron is also pushing for new transparency rules for tax havens at the G8 summit.
A spokesperson for Indian-born Choudhrie said that all donations by the businessman, his family and their companies to the Lib Dems "will have had tax paid on it before" in the UK.
Verjee, believed to be worth around 125 million pounds, declined to comment.
