Monday June 17, 2024

After Panama Papers: Paradise Papers shake and shock world

By Umar Cheema
November 06, 2017

ISLAMABAD: A treasure trove of documents has further unmasked the secretive world of tax havens shining light on the connection between money and power, further expanding the offshore club of Pakistanis. Included among them is Shaukat Aziz.

The new leak named Paradise Papers has shaken the world capitals with 13.4 million documents, calling into question the shady business connection of US President Donald Trump’s billionaire commerce secretary with Russian companies, Secretary of State Rex Tillerson, secret investment of Canadian Prime Minister Justin Trudeau’s chief fundraiser, offshore investment of the Queen of England, Queen of Jordan, and 120 other politicians from across the world. They include presidents of Ukraine, Columbia, Liberia, Australian prime minister, a former Austrian chancellor, two sons of Turkish prime minister, finance and agriculture ministers of Brazil, a few parliamentarians of Iraq, Iran and Ukraine, a minister and officials of Kazakhstan oil ministry, foreign minister of Uganda, former presidents of Ghana, Indonesia, cousin of Syrian president Bashar al-Assad, a former prime minister of Japan, Qatar’s finance minister Ali Shareef al-Emadi, former Emir of Qatar Hamad bin Khlifa al-Thani, Prince Hammad bin Jassim bin Jaber al-Thani, two important figures of the UAE, Saudi Arabia’s King Salman bin Abdul Aziz, Muhammad bin Nayef, Prince Saud bin Fahd bin Abdel Aziz al-Saud, the late King Fahd’s wife Al Jawhara bint Ibrahim Al Ibrahim, etc. 

Names of 714 Indians also appear in the leaks. Renowned singers Madonna and Bono are also named. 

The papers have also brought under scrutiny the social media giants like Twitter and Facebook having massive investment from Russian government-owned firms at a time when US Congress is investigating the tech giants' role in amplifying fake news that played a decisive role on American presidential election. The tax avoidance schemes of over 100 multinational companies including Apple, Uber, Nike, Botox-maker Allergan through transferring profit in offshore jurisdictions have come under public attention as well. 

The newly-released documents were obtained by German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists and a network of more than 380 journalists in 67 countries. They have come from two offshore service provider firms, based in Bermuda (Appleby) and Singapore (Asiatic Trust).  The leaked files also include documents from government business registries in some of the world’s most secretive corporate havens, in the Caribbean, the Pacific and Europe, such as Antigua and Barbuda, the Cook Islands and Malta. One-fifth of the world’s busiest secrecy jurisdictions are represented in these databases.

The record of Pakistanis was mostly found in Bermuda, British Virgin Islands, Cayman Islands, Malta and other such jurisdictions. Former chairman of National Insurance Corporation Limited Ayaz Khan Niazi, Sadruddin Hashwani, Mian Mansha, a successful bidder of Direct to Home (DTH) license, Zaheeruddin, owner of Soneri Bank Nooruddin Feerasta, chairman of Dawood Hercules Corporation Hussain Dawood and other prominent Pakistanis were identified in connection with the offshore investment. 

As many as 135 Pakistani individuals with accounts in a Swiss bank were also identified which they either created in their own name or through offshore companies.

Former prime minister Shaukat Aziz was found linked with two trusts. The one set up by the Citibank in Bahamas in which he acted as director was Cititrust Limited. This was formed when he was executive in that bank. 

Another one he himself set up: Antarctic Trust. Rukhsana Aziz, his wife and three children: Abid Aziz, Maha Aziz, Lubana Khan, and Tanya Khan (granddaughter) are its beneficiaries. Shortly before becoming finance minister, he set up this trust in Delaware (America) which was being managed from Bermuda. It was neither declared during his stint as finance minister nor as prime minister. The trust was categorized among the “high risk” clients being dealt by the Appleby law firm. 

Speaking through his attorney in New York, Shaukat Aziz said he didn’t have to declare in Pakistan because he was the settlor of trust. Asked whether his wife or children declared? They didn’t have to declare because they were beneficiaries, not the beneficial owners, he responded. He said no law was violated. 

“Mr. Aziz created the Antarctic Trust shortly before becoming finance minister of Pakistan to insure that if he were to die, his assets would pass efficiently to his family. Since he was the target of more than one assassination attempt while he served in Pakistan, his concern was well founded,” his attorney said.

Ayaz Khan Niazi has been identified in the record in connection with four offshore holdings in British Virgin Islands including one trust: Andalusian Discretionary Trust. Remaining three were set up as companies: Andalusian Establishment Limited, Andalusian Enterprises Limited and Andalusian Holdings Limited. 

The formation of all of them dates back to 2010 when Ayaz was chairman National Insurance Corporation Limited. His two brothers: Hussain Khan Niazi and Muhammad Ali Khan Niazi acted as the beneficial owners of these investments whereas Ayaz together with his father Abdul Razaq Khan and mother Fauzia Razzaq were directors. 

Sadurddin Hashwani, a leading business tycoon in hoteling and oil industry, owns one company in Barbodas and Cayman Islands each. They are: Bowenergy Resources (Pakistan) SRL and Ocean Pakistan Ltd. Documents show the companies were used for securing hefty loans from Standard Chartered situated in yet another offshore jurisdiction, Mauritius, as well as its branch in London. 

The above two companies are in addition to a couple of other offshore holdings discovered through Panama Papers: North Atlantic Services Limited and Rushlake Hotels (USA) Inc., registered in British Virgin Islands. Responding to The News’ questions, Hashwani said he had answered in detail the last year (when companies were identified in Panama Papers) and there is nothing to add in case of the two newly discovered companies. As for as loans from Standard Chartered from its Mauritius branch is concerned, it was a business loan and the charge was registered in the favor of the bank with the SECP hence nothing hidden.     

Mian Muhammad Mansha, Chairman of Nishat Group, has been linked with six offshore companies. Four of them are in British Virgin Islands: Mallen Securities Ltd, Maple Leaf Investments Ltd, Lyle Trading Ltd and Dolin International Limited. Remaining two are in Mauritius: Croft Limited and Best Eagles Holdings Inc. An account in Swiss bank has also been found connected with these companies which dated back to 1994 and the account was in existence till 2007.  

Responding to The News’ questions, Mian Mansha said he had to move to the United States in mid-1990s due to adverse political situation in Pakistan. These bank accounts were meant to meet day to day living in that period. Finally, almost a decade ago these accounts were liquidated and amounts repatriated to Pakistan through official channels and have been duly recorded in tax returns.  

Alauddin J. Feerasta, Chairman of Soneri Bank, is the owner of Rangeworth Limited, a company registered in British Virgin Island, having an account in a Swiss bank. Nooruddin Feerasta, his nephew and chairman of Rupali Polyester Limited, also has a company set up in British Virgins Island with an account in Swiss Bank. Both of them didn’t answer the questions sent by The News. 

Obaid Altaf Khananai who pleaded guilty of money laundering in a US court also used to have an account in Swiss bank that he jointly had with his mother. 

Hussain Dawood has been identified in connection with a company registered in the Isle of Man, Hercules Enterprises Limited along with two accounts in Swiss and French banks. Islamabad-based businessman, 

Zaheeruddin who was among three winners of DTH, owns three companies in British Virgin Islands and two accounts in HSBC (Bermuda) and Bank of Bermuda. None of them was declared in business profile when deposited business details with Pemra for DTH bid. 

A Mauritius-based offshore company, Balyasny SI Limited invested in local English daily newspaper. Balyasny is wholly owned subsidiary of the Shakti Master Fund L.P., a Cayman Islands exempted limited partnership. The Security Exchange Commission of Pakistan in 2011 inquired about the beneficial ownership of the shares held by Balyasny which responded that the shares are beneficially owned by the company (Balyasny). It also had purchased shares of Pace Pakistan that is also owned by Taseer family.  The News approached for comments to Shehryar Taseer who responded that it was a corporate arrangement. 

British national and the spiritual leader of Ismaeli community, Prince Karim Aga Khan, appeared in the record for two reasons. He owns an offshore company in the Isles of Man: Bravo Romeo. The company, according to Appleby record, was used for “yacht vessel ownership.” The company is considered high risk by Appleby as they were not able to carry out due diligence. The Appleby also works for the Aga Khan Fund for Economic Development S.A. which is a subsidiary of Aga Khan Development Network, the world’s biggest private development agency.

Queen Elizabeth II of England, the documents show, has invested in a Cayman Islands fund that in turn invested in a private equity company controlling BrightHouse, a U.K. rent-to-own firm criticized by consumer watchdogs and members of Parliament for selling household goods to cash-strapped Britons at high interest rate of 99.9 percent. Likewise, Queen of Jordan owns two trusts on the Island of Jersey. One of them owns her sprawling British estate.

Wesley Clark, a one-time Democratic presidential hopeful and a retired four-star U.S. Army general who served as NATO’s supreme commander in Europe, was a director of an online gambling company with offshore subsidiaries, the files show.

The Appleby files also showed how Wilbur Ross, Trump’s commerce secretary, has used a chain of Cayman Islands entities to maintain a financial stake in Navigator Holdings, a shipping company whose top clients include the Russian government-linked energy firm Sibur which paid more than $23 million in 2016 to Navigator Holdings. Among the Sibur’s owners are the son-in-law of Russian President Vladimir Putin, Kirill Shamalov, as well as a Russian billionaire the U.S. government sanctioned in 2014 because of his links with Putin. These revelations come against a backdrop of growing concerns about hidden Russian involvement in U.S. political affairs. 

A spokesman for Wilber Ross said that the Commerce Secretary never met Putin’s son-in-law or Sibur’s other owners and that he was not on the board of Navigator when it initiated its relationship with Sibur.

Ross recuses himself from matters that relate to international shipping, his spokesman said, and “has been generally supportive of the administration’s sanctions” of Russian entities.

Russian investment into US-based global giants of the social media has also been established. A government-owned bank of Russia invested $191 million in Twitter Inc in 2011 and California-based Russian investor, Yuri Milner, acted as an intermediary. Likewise, around $1 billion was invested in Facebook through Yuri Milner who had recently also invested $850,000 in the real estate firm co-founded by Trump’s son-in-law.