Tory party chairman vowed to sue The Independent

The Conservative Party chairman Nadhim Zahawi tried to stop The Independent exposing that he was being investigated over his tax affairs by threatening to sue if we published.

- SIMON WALTERS

Mr Zahawi, who was chancellor at the time, repeatedly said he had paid "all due taxes" and would take legal action if we reported that he had been investigated.

The Independent ignored his threats and published two reports, detailing how Mr Zahawi had faced inquiries from the Serious Fraud Office, the National Crime Agency and HMRC.

Mr Zahawi did not sue or complain to this newspaper - and has now reportedly paid a penalty of more than £1m to HMRC in a settlement worth almost £5m in total.

In an extraordinary exchange before The Independent broke the story that he was being investigated last July, Mr Zahawi repeatedly threatened legal action:

• When asked about the NCA inquiry, he responded: "100% I will take legal action."

• When questioned about the HMRC probe, he responded: "I will take legal action."

• When pressed for an answer, he responded: "I have responded to you. I repeat I will take legal action."

The Independent first reported that Inland Revenue experts were investigating Mr Zahawi's tax affairs on 6 July after a secret inquiry by the NCA in 2020.

That inquiry was codenamed "Operation Catalufa" - after a species of ray-finned fish, orange in colour found in deep waters in the Pacific known as Popeye Catalufa. The NCA inquiry was said to involve its International Corruption Unit.

Whitehall officials were told Mr Zahawi had not been informed because investigators were "trawling for information". The NCA inquiry did not lead to action against Mr Zahawi.

On 9 July, The Independent reported officers from the Serious Fraud Office had investigated his financial affairs. The investigation had been passed to HMRC - controlled by the Treasury for which Mr Zahawi, as chancellor, was responsible. A Whitehall source said the tax investigation was "unresolved" at that time.