ANAS Sarwar accepted a £40,000 donation linked to a tax haven to fund his campaign for Scottish Labour leader, The Herald can reveal.

The Glasgow MSP, who was dogged by questions over his finances and business ties, took the cash from the Scottish subsidiary of a company based in the British Virgin Islands (BVI).

Labour’s recent General Election manifesto promised a swift crackdown on tax havens.

It said: “Labour will act decisively on tax havens, introducing strict standards of transparency for crown dependencies and overseas territories, including a public register of owners, directors, major shareholders and beneficial owners for all companies and trusts.”

Mr Sarwar, who is currently his party’s health spokesman, lost the contest to his left-wing rival Richard Leonard a fortnight ago.

The SNP said Mr Sarwar had become “increasingly toxic” and a headache for Mr Leonard, who has yet to announce the line-up of his shadow cabinet.

Mr Sarwar’s updated register of interests at the Scottish Parliament shows he accepted £80,000 towards his failed leadership bid.

Half came from Kasim Gulzar, who runs a string of pharmacies with Mr Sarwar’s brother, Asim, manager of the Sarwar family cash and carry business.

This was accepted from one of Mr Gulzar’s companies, Kasim Gulzar Ltd, on October 20.

The other £40,000 came from PG Paper Company Ltd, an international paper business registered in Renfrewshire with its office in Greenock.

PG Paper was set up by the Indian philanthropist and entrepreneur Poonam Gupta OBE, who runs it with her husband Puneet Gupta.

According to company records, PG Paper is a “wholly owned subsidiary of SAPP Holdings Ltd”, which is registered at a post office box in the BVI capital Tortola.

Mr Sarwar accepted the PG Paper Company donation on October 6.

There is no suggestion Mr Sarwar concealed the money or delayed registering it.

PG Paper also said they did not inform Mr Sarwar of the BVI connection.

However the link raises questions about Mr Sarwar’s due diligence and adds to a series of controversies that have infuriated Labour’s left wing.

During the leadership race, he was criticised for having a 23 per cent stake in the family cash and carry firm, United Wholesale (Scotland) Ltd. despite it not paying the real living wage promoted by Labour or having formal trade union recognition.

He and his wife Furheen had received more than £500,000 in dividends from the company.

Accused of lacking credibility on Labour’s core message of “for the many, not the few”, Mr Sarwar later transferred his shareholding to a trust for his children.

The Herald also revealed that in 2010 and 2011 Mr Sarwar had held shares in a software company based in another tax haven - Picsel Group Holdings Ltd in the Channel Islands.

Former Labour MP Ian Davidson, who criticised Mr Sarwar during the campaign for lacking the “clean hands” needed to talk about tax avoidance, said: "Anyone being given £40,000 should make sure that they look very carefully at where it's coming from and why.”

SNP MSP James Dornan added: “People in Labour will be wondering why Anas Sarwar needed so much money to run what was, let’s be honest, a pretty lacklustre campaign.

“These megabucks donations hardly match his desperate attempts to portray himself as a man-of-the-people.

“The question is whether Richard Leonard will be happy to have an increasingly toxic rival on his front bench - or if he’ll risk further splits in the party by exiling him to the backbenches.

“Either way, he’ll be a thorn in the side of the new Labour leader who clearly has his work cut out trying to stitch a deeply divided party back together.”

Explaining the donation, a spokesperson for PG Paper said: “Given how divisive global politics has become, we were excited by the prospect of electing the first ever ethnic minority leader of a political party in UK history and the positive message that would have sent about Scotland.

“The donation was given by PG Paper Company Ltd, which is a Scottish registered and a UK tax resident company. SAPP Holding Ltd is the global holding company for the wider corporate group which has business interests around the world.

“SAPP Holdings Ltd is fully tax resident in the UK. We are fully tax compliant in all jurisdictions in which the group operates.”

A spokesman for Mr Sarwar said: "On receipt of the donation, checks were carried out to establish that it was a UK Registered company and that it paid UK Corporation Tax. As both these tests were met the donation was accepted and registered."

Responding to Mr Dornan’s comments, he added: “This is just a petty attack from a rent-a-quote politician. Anas looks forward to working closely with Richard to expose a failing SNP Government and to deliver a Labour Government delivering for the many, not the few.”

Scottish Labour declined to comment and said Mr Leonard’s donations would be declared in due course.