Nadhim Zahawi is under pressure to explain the source of £26m of unsecured loans reported by his family property firm in 2018.
The loans helped the new chancellor, who is already facing questions over his tax affairs, to buy properties across Britain, including commercial and retail premises in London, Birmingham, Brighton and Walton-on-Thames in Surrey.
The new loans to the property firm Zahawi & Zahawi were reported in the same year that an offshore family company linked to the chancellor sold shares in YouGov, the polling firm he founded, transferring £26m to an unknown recipient or recipients.
A source close to Zahawi insisted there was no link between the money transferred out of the offshore firm, Balshore Investments, and the unsecured loans to his family property firm, Zahawi & Zahawi.
A spokesman said: “Nadhim and his wife have never been beneficiaries of any offshore trust structures.”
The chancellor is embroiled in a mounting controversy after it was revealed last week that a “flag” has been raised by officials over his financial affairs. He is facing calls to identify the lender or lenders who helped finance his property firm.
Zahawi & Zahawi was incorporated in 2010 and used unsecured loans on top of bank debt to buy properties. Its borrowings rose from £185,831 in 2015 to nearly £40m in June 2018, including £11.4m in banks loans and £26.6m in unsecured loans. The chancellor stood down as a director of the firm in 2018 and his wife now controls the company. Its investment properties are worth £58m, with current liabilities of £55.5m.
