Tuesday December 05, 2023

Rulers not named directly in Panama Papers stay put

April 25, 2016

LAHORE: In countries where names of rulers have not appeared but the names of their relatives, friends or allies have appeared in the Panama Papers,  there were minor protests in the beginning.

These protests died down soon because the names of rulers were not directly mentioned in disclosures about offshore companies. However, in those countries where rulers names were mentioned in the Panama Papers directly such as Iceland, massive protests were witnessed. Although Pakistani Premier Nawaz Sharif, British Prime Minister David Cameron and Ukraine’s President Petro Poroshenko are among the leaders facing some calls to relinquish charge, they insist their names have not appeared directly in the Panama leaks. so, they are unmoved.

Mauricio Macri, the President of Argentina, has been named directly in the Panama Papers, but he has contended he was never a shareholder in this firm. Russian President Vladimir Putin has not been directly accused of possessing off-shore firms.

Opposition parties and the general public in Iceland had demanded of their Prime Minister Sigmundur Gunnlaugsson, the youngest constitutional chief executive in his country’s history at 38, to quit after the Panama Papers had shed light on reported offshore financial dealings by him and his wife and the way he hid millions of dollars of investments in his country’s banks behind a secretive offshore company “Messrs Wintris” in 2007.

On March 15, 2016, the premier’s wife Palsdottir wrote a Facebook post disclosing the offshore company to the public for the first time.  She said: “The presence of the company has never been a secret.”

The Facebook post came four days after ICIJ partners Reykjavik Media and SVT (Swedish public television) had asked the prime minister about his off-shore concern Messrs Wintris in an interview. 

In that interview, SVT asked Gunnlaugsson if he knew about Wintris, he said, “Well, It’s a company — if I recall correctly — which is associated with one of the companies that I was on the board of and it had an account, which as I’ve mentioned, has been on the tax account. So now I’m starting to feel a bit strange about these questions because it’s like you are accusing me of something when you are asking me about a company that has been on my tax return.”

Shortly thereafter, an infuriated Gunnlaugsson had stood up and walked out of the interview.  His wife Palsdottir later said that the assets in Wintris were hers alone and that a bank’s mistake had led to Gunnlaugsson’s being listed as a co-owner.

It was alleged that he did not declare an interest in the company when entering parliament in 2009 and sold his 50 per cent of Messrs Wintris to his wife Anna Sigurlaug Palsdottir for $1 (70 British pence), just eight months later. Sigmundur David did not disclose his 50 percent share of Wintris when he had entered parliament in 2009.

Dubbing it a massive conflict of interest with his job, Prime Minister Gunnlaugsson’s critics and political adversaries soon took to the streets of Iceland’s capital, Reykjavik. Named directly in the Panama Papers Scam, Premier Gunnlaugsson had resigned on April 5 this year. Before resigning, he had contended that his financial assets had always been reported transparently and had disclosed all requested information to the government and was unsure how the transactions actually worked.

Spain’s acting Industry Minister, Jose Manuel Soria, also had to quit office just days after being named directly in a document leaked by Panamanian law firm Mossack Fonseca. The Wall Street Journal had stated: “Jose Manuel Soria’s resignation from the Spanish Parliament and his ministerial posts came days before he was due to appear in Parliament to explain his claim that he never ran or owned a Bahamian offshore company, although his name appeared on leaked documents identifying him as director of a firm.

Spain’s “El Confidencial” news site, citing a leak from a Panamanian law firm Mossack Fonseca, had published a September 1992 document naming the country’s Acting Industry Minister and another man as one of two directors of a company named U.K. Lines Ltd.

Ukrainian President, Petro Poroshenko, is facing growing calls for his impeachment. Known as Ukraine’s billionaire “Chocolate King,” Poroshenko had swept into office in 2014 vowing reforms that have not yet come. 

He became the sole shareholder of Prime Asset Partners Limited in 2014, as Russian troops had invaded Eastern Ukraine. The following year, Poroshenko vowed to sell most of his assets; news reports said they ultimately ended up in “Prime Asset Capital.”

His spokesman told the ICIJ said: “The creation of the trust and related corporate structures has no relation to political and military events in Ukraine. President’s assets are held by an independently managed fund — Prime Asset Capital.”

President Petro Poroshenko said he had done nothing wrong and Ukrainian prosecution officials said there was no evidence of a crime. The Panama Leaks have made British Premier David Cameron release his tax returns amidst calls for resignation.

He admitted that he had made a mess of responding to questions about his inheritance from his father, who had an investment company offshore. “The New York Times” had written: “Mr. Cameron has moved belatedly to try to defuse a furor over his finances in the wake of the release last week of leaked information about offshore companies in the so-called Panama Papers, which showed that his father, Ian, was a director of an offshore trust that paid no British taxes. Mr. Cameron insisted that neither he nor his father had done anything illegal. He said all taxes due had been paid on proceeds from the fund and on an inheritance of 300,000 pounds, or about $424,000 according to current exchange rates, that he received when his father died in 2010. The tax information Mr. Cameron released also showed that he received £200,000 (about $282,400) from his mother in 2011, on which he will pay no inheritance tax if she lives until 2018, but more questions were raised about whether those funds came from offshore accounts.”

The esteemed American newspaper had maintained: “Mr. Cameron has said that he and his wife, Samantha, sold their interest in his father’s fund four months before he became prime minister in 2010 and that they had paid the full tax on the proceeds. They paid £12,497 (about $17,600) for it in 1997 and sold it for £31,500 (about $44,400), which just escaped capital gains taxes because the profits were split between him and his wife.”

More than £170 billion of United Kingdom’s property is now held overseas and nearly one in 10 of the 31,000 tax haven companies that own British property are linked to Mossack Fonseca, reported The Guardian. 

British property purchases worth more than £180 million were investigated in 2015 as the likely proceeds of corruption— almost all bought through offshore companies.

In Indonesia, the country’s Finance Minister, Bambang Brodjonegoro, had immediately responded to the leaked data of tax evasion by instructing the Directorate General of Taxation to follow up the findings. 

The Indonesian Finance Minister had once said there was potential for the property of the taxpayer around Rupiah 4,000 trillion, which had not been affected by the tax.

Coming to Mauricio Macri, the President of Argentina, the Panama Papers have abruptly ended his political honeymoon.

According to the leaked Panama Papers, the President of Argentina, who as head of state had vowed to fight corruption — is listed, with his Italian tycoon father Francisco and brother Mariano, as a director of “Messrs Fleg Trading Ltd.,” which was incorporated in the Bahamas in 1998 and dissolved in January 2009. 

Macri had not disclosed this financial connection on asset declarations when he was mayor of Buenos Aires. His spokesman said: “He (the President) didn’t list “Fleg Trading Limited” as an asset because he had no capital participation in the company. The company, used to participate in interests in Brazil, was related to the family business group. This is why Maricio Macri was occasionally its director. President Macri was never a shareholder in this firm.”

On April 7, 2016, federal prosecutor of Argentina had started a formal investigation into President Macri’s involvement with his off-shore company named above. A court judge was asked to start the file on the inquiry.

The “BBC News” had asserted: “In Argentina, the office of President Mauricio Macri confirmed that a business group owned by the president’s family had set up an offshore company through Mossack Fonseca. But the president’s office said that Mr Macri himself had no shares in the company and that he had never received any income from it.” 

In France, the financial prosecutors have opened a probe, and President Francois Hollande has declared that tax evaders would be brought to trial and punished. A handful of French politicians mentioned in the leaked documents though.

As far as Israel is concerned, some 600 companies owned by its 850 citizens are listed in the Panama Leaks. Among the Israeli names found in the leaked documents are: top attorney Dov Weissglass, who was the bureau chief of the late prime minister Ariel Sharon.

China has blasted the Panama reports and has censored media coverage.

China’s Foreign Ministry had denounced as “groundless” reports based on documents leaked from a Panama-based law firm that name relatives of current and retired Chinese politicians, including President Xi Jinping, as owning offshore companies.

Spokesman Hong Lei said he would not discuss the reports further and declined to say whether the individuals named would be investigated.

“For these groundless accusations, I have no comment,” Hong told reporters at a regularly scheduled news conference.

According to the Panama Papers, relatives of at least five past or present members of the ruling Communist Party’s all-powerful Politburo Standing Committee are said to have held companies registered in tax shelters in the Cook Islands or British Virgin Islands.

Along with President Xi Jinping, these prominent political figures of China include relatives of former premiers Wen Jiabao and Li Peng, ex-president Hu Jintao and one-time paramount leader Deng Xiaoping who oversaw China’s transition from orthodox Marxism to a hybrid communist-capitalist system.

There was some uproar in Russia too, but responding to the Panama leak, Kremlin said the documents contained “nothing concrete and nothing new.”

Vladimir Putin does not appear in any of the records but the names of many of his associates do.

Yes, names of some of Putin’s close associates like construction billionaires Arkady and Boris Rotenberg, professional musician Sergei Roldugin and another business magnate Alisher Usmanov have appeared in the Panama Leaks.

The papers also list billionaire Gennady Timchenko, the spouse of Putin’s press secretary, his former KGB colleagues, and several oligarchs as owning offshore shell companies. In 2011, Putin had criticised offshore companies as “unpatriotic.”

The Panama Papers had said that professional Russian musician Sergei Roldugin was Putin’s best friend and the godfather of his eldest daughter. He had acquired assets worth at least $100 million, including a 12.5 per cent stake in Video International, Russia’s largest television advertising firm.

Putin spokesperson Dmitry Peskov said that Western mainstream media reporting of the Panama Papers was engaged in “Putinophobia.”

He said the primary target of the leak was Vladimir Putin and the Panama Papers were part of a conspiracy against Russia, orchestrated by the CIA, the US Department of State and others.

President Putin has denied “any element of corruption” over the Panama Papers leaks, saying his opponents are trying to destabilise Russia.

However, a few opposition politicians did question why the media was ignoring the story!

According to BBC, unlike in Iceland, there have been no protests on Arab streets calling on leaders to step down following the leaks of offshore accounts. Several Shaikhs were named in Panama papers

On reactions in Germany, the “BBC News” had gone on to write: “The list of Germans named in the Panama papers makes for colourful; reading. Among the board directors and real estate vendors who appear to have benefited from shell companies established by Mossack Fonseca are members of the German nobility, recipients of the German honours system and a number of brothel owners. The story may have cracked open a network of global corruption. But it is a big story for Germany too, not least because the data was initially obtained by one of the country’s leading newspapers and because Mossack Fonseca was co-founded by German-born Juergen Mossack.”

It added: “Hundreds, possibly thousands, of Germans are named in the Panama papers. So are the country’s banks. And it is possible the revelations will shed light on one of the country’s enduring corruption scandals. Sueddeutsche Zeitung journalists believe several former managers from the manufacturing giant Siemens who were prosecuted for bribery a decade ago may have held on to some of their slush fund cash. The papers reveal that €3m ($3.4m; £2.4m) may have ended up in private accounts in the Bahamas and Switzerland. Siemens has said it will investigate the matter and give a statement if new details come to light. Many are disgusted, if unsurprised, by the revelations. The German government wants a worldwide ban on offshore companies whose owners remain anonymous. But ministers admit they are powerless to outlaw the creation of anonymous offshore companies.” 

In Australia, the Taxation Office had announced that it was investigating 800 individual Australian taxpayers on the Mossack Fonseca list of clients and that some of the cases may be referred to the country’s Serious Financial Crime Task Force.

In Malta, several thousand people had filled a big square in Malta’s capital a few days ago and had demanded the resignation of Prime Minister Joseph Muscat after the leaked Panama Papers said two of his political allies had offshore accounts.

The opposition in Malta wants the removal of Health and Energy Minister, Konrad Mizzi, and the Prime Minister’s Chief of Staff, Keith Schembri.

The Panama Papers have showed how Health and Energy Minister Mizzi had set up a company in Panama and a trust in New Zealand.

However, Mizzi has denied any wrongdoing and said the arrangements were made to facilitate the management of his family assets, including income from a property in London. He has refused calls to resign and said he is subjecting himself to an independent audit.

The opposition is also calling for the resignation of Prime Minister’s Chief of Staff, Keith Schembri, for having similarly set up a company in Panama and a trust in Panama. Schembri has also denied any wrongdoing. He says that he was in business well before he assumed his government role and that he had handed over his business management as soon as the government was elected in 2013.

Alaa Mubarak, son of former Egyptian President Hosni Mubarak was also cited as owning, through holding companies, real estate properties in London.

In India, Premier Narendra Modi had ordered an inquiry, and subsequently the Indian government announced that it constituted a special multi-agency group comprising officers from the investigative unit of the Central Board of Direct Taxes and its Foreign Tax and Tax Research division, the Financial Intelligence Unit and the Reserve Bank of India.

The list contains names of more than 500 prominent Indian actors, politicians and businessmen who have allegedly stashed money in offshore entities in Panama. Some of them include Bollywood celebrities Amitabh Bachchan, his daughter-in-law and top actress Aishwarya Rai, business tycoons KP Singh, Vinod Adani and an underworld don Iqbal Mirchi.

In Brazil, politicians from seven parties were named as clients of a Panama-based firm at the center of a massive data leak over possible tax evasion.

An off-shore company reportedly belongs to Eduardo Cunha, the speaker of the lower house of Brazil’s legislature and the man heading efforts to impeach President Dilma Rousseff.

While Speaker Cunha’s name does not directly appear on the list, the Brazilian members of ICIJ looking at the leaked documents said that one of the companies was directly linked to Cunha.

In a statement, Cunha vehemently denied the allegation, and challenged anyone to show his links to any offshore company.

Separately, prosecutors last year had charged Speaker Cunha with taking millions of dollars in bribes and hiding the money in Switzerland.

Other Brazilians linked to the “Panama Papers” include a former cabinet minister and a former legislator.

Canadian Premier Justin Trudeau has denied any involvement with the leak, saying “I have entirely and completely been transparent about mine and my family’s finances. That is something I learned early on that Canadians expect from their leaders.” 

Names of Juan Carlos (former king of Spain), Azerbaijan’s President Ilam Aliyev, Guinea’s former president Lansana Conte and Bidzina Ivanishvili (former Prime Minister of Georgia) are also included in the list of Panama Papers.