Grimsby achieves tax haven status for Hanson

Hanson, the conglomerate in the throes of breaking itself up, yesterday sought to play down the significance of one of its demerged businesses being managed from Grimsby - even though the company will be registered and headquartered in the US.

Although most of its plant and 6,700 staff are located across the pond, Millennium Chemicals will have to be controlled from Britain for the next five years for tax purposes.

The company will be forced to hold its board meetings in the UK and to maintain a British executive office - and the only one it has is near Grimsby.

"We're not putting Grimsby on the map," claimed Hanson's Christopher Collins. "It is already on it as far as we are concerned with the large titanium dioxide plant we have at nearby Stallingborough."

He added that Millennium's board meetings would "almost invariably" be held in the UK.

Millenium is incorporated in Delaware, will pay American tax rates and its shares will only be listed in New York. But the Inland Revenue will only allow the British-registered Hanson to spin off Millennium, Imperial Tobacco and its Energy Group without paying tax if management and control remain in Britain for at least five years.

Mr Collins pointed out that not all Millennium's directors would be inconvenienced by the unusual arrangement as three of the board, including former Home Secretary Kenneth Baker, are British. He also acknowledged that it could act as a poison pill for potential bidders.

He might also have added that Hanson's connections with the famous fishing port are far from tenuous. One of its co-founders, the late Lord White, was a life peer of Hull, just across the Humber estuary.

The US executives, led by William Landyut, the chairman and Robert E Lee, Millennium's president, will be amply rewarded for their regular transatlantic trips. Free shares worth around $60m (pounds 38.5m) will be distributed among 30 of the most senior Millenium executives under a remuneration package.

According to the listing particulars, Mr Landyut will be entitled to free shares worth up to $10m under the long-term stock incentive plan. He gets a quarter of the shares automatically, but will only earn the maximum if certain performance targets, set by Millennium's remuneration committee, are met. Last year Mr Landyut's basic pay rose by 15 per cent to $780,000.

Mr Lee will be entitled to free shares worth up to $7m under the incentive plan. He already makes $490,000 a year.