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Companies owned by Sir Michael Hintze, adviser to federal government, repay millions in deal with British tax office

EXCLUSIVE

Appointed to provide advice to the federal government's financial system inquiry: Sir Michael Hintze.

Appointed to provide advice to the federal government's financial system inquiry: Sir Michael Hintze. Photo: AFR

A London billionaire appointed by Treasurer Joe Hockey to advise on Australia's financial regulations runs companies that have repaid millions of dollars for exploiting tax loopholes.

Hedge fund boss Sir Michael Hintze is connected to the British Conservative Party. Last year he approved the repayment of nearly $43 million in a settlement with the British tax office after companies in his CQS group used ''employee benefit trusts'' that ran foul of authorities.

Sir Michael has a reported personal wealth of $1.8 billion. His financial empire, elements of which have also utilised tax havens such as the Channel Islands and the Cayman Islands, reportedly generated $154 million in 2011, but paid an apparently modest $55,000 in corporation tax.

Sir Michael is one of four international business leaders appointed by Mr Hockey in March to provide additional advice to the federal government's financial system inquiry. He is recognised for his philanthropic activities, but the revelations of his company's tax affairs raise questions as to the appropriateness of engaging advisers who have been involved in tax minimisation behaviour overseas.

A spokesman for Sir Michael, Michael Rummel, rejected any suggestion that Sir Michael may not be suitable, saying his boss's 30 years in financial markets made him ''extremely well qualified''. Mr Rummel said Sir Michael was regularly consulted by international regulators.

The financial system inquiry, headed by former banker David Murray, is the first comprehensive study of the sector in 16 years.

It is scheduled to report by the end of this year, and is tasked with establishing ''a direction for the future of Australia's financial system''. The others on the international panel are:

London-based David Morgan, AO, head of private equity firm JC Flowers in Europe and Asia-Pacific, and a former deputy secretary of the Australian Treasury.

New York-based Jennifer Nason, global chairman of technology, media and telecom investment banking at JPMorgan Chase & Co.

Hong Kong-based Andrew Sheng, described by the government as ''a well-known former central banker and financial regulator in Asia and a leading commentator on global finance''.

A keen supporter of David Cameron's government, Sir Michael is the Conservative Party's principal private donor. As well he is a generous private lender, having floated soft loans said to exceed $4 million.

Sir Michael is also a supporter of the provocatively named Global Warming Policy Foundation, whose mission is to challenge claims of anthropogenic climate change.

The foundation's website refers to the globally constructed scientific body, the International Panel on Climate Change, as ''the climatocracy''.

The Treasurer's office declined to comment.

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