EXCLUSIVE




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.