CDC plc

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CDC plc had a letter in the Independent this morning. They said:

Sir: Few will doubt the sincerity of Christian Aid's motives in drawing attention to child poverty in developing countries ("Tax evasion 'costs lives of 5.6m children' ", 12 May) but the charity misrepresents some basic facts about CDC, the UK development finance institution.

It is true that CDC does not pay tax in the UK on its profits, but this has nothing to do with tax havens. It is because the company is exempt from paying corporation tax under UK law. The 400 promising companies the UK has invested in through CDC do pay millions of dollars in taxes to their local governments.

Richard Laing

Chief Executive, CDC Group Plc,

London SW1

This is disingenuous. The Christian Aid report talks in particular about the role of tax havens in harming development. Its criticism of CDC focused on the fact that it uses 78 tax haven subsidiaries to make sure that its investments do not give rise to tax charges.

Please answer that one Richard Laing.

Because I will go further: the list of principal subsidiaries in your 2007 accounts suggests tax planning is at the forefront of your thinking, and that the planning involved does result in less tax being paid in developing countries than might be expected by their governments. This is exactly what Christian Aid is criticising in their report. It is extraordinary that a company owned by DfID engages in this sort of behaviour.

Please justify that as well.

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