With George Osborne vehemently denying that he asked a Russian oligarch for £50,000, just how home-grown is the money flowing into the Conservative Party?

The Times has discovered a series of donations to the Tories of exactly £50,000 or £100,000 paid legally by UK companies where overseas businessmen appear to be in control. Some of the gifts came from businesses that seem to have been extraordinarily generous. One wrote a cheque for a large proportion of its profits, one was making regular losses and one seemed to be doing hardly anything at all.

Overseas businessmen can contribute quite legitimately to British politics under the current law if their UK-registered companies make donations.

This is not just an issue for the Conservatives. The Liberal Democrats faced embarrassment after accepting millions of pounds from the Scotsman Michael Brown, living in Majorca, through his London company.

Indeed, had a contribution been accepted by the Conservatives from Oleg Deripaska’s Leyland Daf, it might well have been within the law, provided that there was no attempt to conceal the source.

The Times has discovered that £100,000 was given by CVS Management, the management consultancy that is a subsidiary of a British Virgin Islands-registered, Swiss-based investment company.

The guiding hand of its parent Corvus Capital is the highly colourful Andrew Regan, a financier who was cleared of stealing £2.4 million from a food company where he was chief executive. Today Mr Regan lives in Switzerland. He is invisible on the published British electoral roll. His office confirmed that he travelled from Geneva to attend one Conservative event. He has been invited to other get-togethers but declined.

Mr Regan, 42, who tried to buy the Coop, is just one of the big beasts overseas whose companies appear to be bankrolling David Cameron’s bid to capture Downing Street.

Markland Holdings (UK) is part of an organisation owned by two Irish property tycoons, Sean Mulyan and Paddy Kelly. But the business is based in Dublin and has no London office. It gave £100,000 to the Conservatives.

Venson Automotive Solutions, which gave £50,000, is a British business owned by Dermot Desmond, the billionaire Irish owner of Celtic FC. Then there is the donation from Star Reefers UK, the British wing of a family shipping business whose parent company is chaired by the Swiss-based Norwegian, Kristian Siem. Companies House records show Star Reefers UK lost £394,000 last year. Yet in February this year it gave £50,000 to the Tories.

Another donation of £50,000 was given in June this year by Sleepwell Hotels UK, which is owned by a trust in the Isle of Man. The latest filed accounts at Companies House for 2006 show that this entity did no trading. The law states that a company must be “carrying on business” for a donation to be eligible.

Denholm Eke, one of the Manx directors, said the corporate donor was part of a business running hotels in Blackpool and the Isle of Man. A restructuring meant that Sleepwell Hotels UK was now clearly trading and this would be reflected in future accounts. He stressed that nobody had been to any Leader’s Group events.

Mr Eke, managing director of the trust, said the gift had been a corporate, rather than an individual, donation. “It’s because we are very interested in Blackpool,” he said. “The Conservative Party would provide the most obvious political impetus for a Blackpool regeneration. It [Blackpool] is very sad and run down.”

Another generous donation came from BSN Capital Partners, a London-based hedge fund advisory business run by two Americans and a Briton. It is ultimately owned in the Cayman Islands by a company which is in turn partly owned by Icap, the Conservative Party treasurer Michael Spencer’s vehicle. Their gift of £100,000 amounted to nearly a quarter of last year’s profits.

Asked why the money had been paid to the Tories this way, an Icap source said: “The board of that organisation are entitled to choose whether they wish to do [so].” Party funding has been pushed back into the political limelight after a letter to The Times from Nat Rothschild on Monday about George Osborne and the oligarch.

Foreign donations were widely thought to have been abolished when Tony Blair introduced the antisleaze Political Parties, Elections and Referendums Act in 2000. Parties became responsible by law for ensuring that they only took money from eligible donors. The Conservative Party’s own account of what happened on the sunny shores of Corfu this summer is telling.

A version of events was released on behalf of Mr Osborne, the Shadow Chancellor, and Andrew Feldman, the party’s chief executive. The pair described drinks at the Rothschild family villa with Nathaniel Rothschild, the mutual friend of Mr Osborne, the Russian aluminium magnate Mr Deripaska and the then yet-to-be ennobled Lord Mandelson.

“Mr Feldman, Mr Osborne, Mr Rothschild and two other house guests gathered on the villa terrace,” the Tories said.

“There was a discussion about British and American politics in the course of which Mr Rothschild suggested to Mr Feldman that his friend, Mr Deripaska, could be interested in making a party donation.”

The Tories recalled their response to this idea. “Mr Feldman made clear that there are very strict rules on donations to political parties in the UK. He explained that there are only two ways of giving a political donation. Firstly, if you appear as an individual on the UK electoral roll . . .”

At this point, Mr Feldman might have been expected to rule out a donation since Mr Deripaska is clearly ineligible to vote in Britain. Instead, he continued. “. . . Secondly, if the donation comes from a legitimate UK trading company. This is an explanation Mr Feldman gives regularly when asked about donations,” the statement added. Mr Rothschild explained that Mr Deripaska was the owner of several British companies, including Leyland Daf. The Conservatives insist they later declined an offer of a payment from Leyland Daf.

Perusing the list of Tory donors published by the Electoral Commission, the figure £50,000 and its multiples pop up with remarkable frequency. There have been 23 corporate donations of exactly £50,000 and five of £100,000 during the Cameron era.

Michael Spencer explained that this figure was first suggested by Sir Hay-den Phillips during his official review of party funding. “When David became leader of the party he suggested we use that as a sort of benchmark that would not be considered controversial by anybody, including the Press,” he told The Times.

Mr Spencer said: “If you are going to have people who support the party, they would expect to meet people in the party including the leader of the party and other Shadow Cabinet members. That’s a perfectly normal and reasonable thing to do. We wish people to feel they are part of the project to get David elected as Prime Minister.

“Clearly we have to finance the Conservative Party. Therefore unless you propose that we get state financing, we want a significant number of individuals or corporations or any legitimate financial supporter to support us. We need to find ways to attract and encourage them.

“This is something that’s not only a good thing to do but it’s an interesting thing to do. It’s a marketing device, you might care to say, but there’s no formal list of members. We are not selling access.”

Cash flow

BSN Capital Partners
Donated £100,000 on March 30, 2007 and £50,000 on May 1, 2008. The London company is owned by BSN Holdings, which is based in the Cayman Islands and part-owned by Icap, the company run by Michael Spencer, the Tory treasurer. Two of the three directors are Americans, although they live in London

Star Reefers UK
The London company donated £50,000 on February 5, 2008. The holding company, Star Reefers Inc, is based in the Caymans and is ultimately controlled by the Norwegian Siem family

Markland Holdings (UK)
The London company donated £100,000 on September 28, 2007. Both directors are Irish and live in Dublin, where the holding company, Markland Holdings Ltd, is based

Sleepwell Hotels UK
The Blackpool company donated £50,000 on June 30, 2008. All three directors are based on the Isle of Man. Sleepwell is ultimately controlled by Burnbrae, a private asset management company on the Isle of Man

Venson Automotive Solutions
The company, which is based in Thames Ditton, Surrey, donated £50,000 on September 20, 2007. Also gave two donations totalling £34,375 to the Labour Party last year. Venson’s ultimate holding company is Bottin International Investment, which is based in Gibraltar and run by the Irish entrepreneur Dermot Desmond

CVS Management
Donated £18,000 on January 1, 2007, £100,000 on April 18, 2007, and £8,500 on November 19, 2007. The company is based in Radlett, Hertfordshire, but owned by Corvus Capital, a Swiss-based investment company registered in the British Virgin Islands. Corvus is run by Andrew Regan, a Briton living in Geneva who last appeared on the electoral roll in 2004

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