Four Belfast-Based KPMG Partners Arrested On Tax-Evasion Charges, Including Executive Calling For Northern Ireland Corporate Tax Cut

Four senior partners of the global accounting firm KPMG have been put on administrative leave in Northern Ireland after their arrests and questioning over alleged tax fraud. One of the men detained was identified as Eamonn Donaghy, the head of KPMG’s tax practice in Belfast and a vocal proponent of corporate tax cuts.

“We can confirm that representatives of HM [Her Majesty’s] Revenue and Customs have advised us that they are conducting an investigation and visited our Belfast office yesterday,” KPMG said in a statement cited by the Irish Times Thursday. “It is important to emphasize that we do not have any indication that this investigation relates to the business of KPMG or the business of our clients.

Also arrested were Jon D’Arcy, the chairman of KPMG’s Belfast office where he leads the audit and transaction services teams; Paul Hollway, the head of corporate finance at the company in Ireland; and Arthur O’Brien, a partner who provides advisory and audit services to multiple clients, especially in the educational and health-care industries.

The four men are under scrutiny over a private investment firm called JEAP that they operated at least from 2008 to 2010. Authorities are questioning how the men accounted for the firm’s losses on investments in real estate.

Donaghy has played an instrumental role in pushing to allow Belfast to create its own lower corporate-tax policy to compete with the Republic of Ireland’s 12.5 percent rate. Northern Ireland is semiautonomous, but its corporate-tax rate is linked to Britain’s 20 percent rate. Donaghy and others have advocated for a lower rate to better compete with Ireland.