Photo: Reuters
Photo: Reuters

Tracking the Panama Papers

The list of Indians include Amitabh Bachchan, Aishwarya Rai Bachchan, K.P. Singh and Gautam Adani's elder brother Vinod Adani, among others

New Delhi: Over 500 Indians figure among a list of individuals who have paid Mossack Fonseca, a law firm headquartered in tax haven Panama known for its factory-like production of offshore companies for its worldwide clientele of the well-heeled, to set up offshore entities in tax havens around the world, according an Indian Express report.

Mossack Fonseca won’t discuss specific cases of alleged wrongdoing, citing client confidentiality, reports the Guardian.

They find mention in more than 11 million documents from the secret files of Mossack Fonseca, in an unprecedented leak that is being called the Panama Papers by the media the world over.

From film actors Amitabh Bachchan and Aishwarya Rai Bachchan to businessmen including DLF owner K.P. Singh and nine members of his family, and the promoters of Apollo Tyres and Indiabulls to Gautam Adani’s elder brother Vinod Adani, to politicians Shishir Bajoria from West Bengal and Anurag Kejriwal, the former chief of the Delhi unit of Loksatta Party, the Indian Express has verified 300 addresses. The list includes scores of businessmen with addresses in nondescript neighbourhoods in Panchkula, Dehradun, Vadodara and Mandsaur.

A close scrutiny of The Panama Papers by The Indian Express also reveals details of hitherto unknown deals, in some cases involving the Indian government, too. Read more

The leak shows how the rich and famous can exploit offshore tax shelters and reveals an unprecedented pattern of corruption worldwide for 40 years, including maneuvers by major banks who created the hard-to-trace companies. World leaders or associates who have embraced anti-corruption platforms are featured throughout.

The massive leak of documents exposes the offshore holdings of 12 current and former world leaders and reveals how associates of Russian President Vladimir Putin secretly shuffled as much as $2 billion through banks and shadow companies, according to ICIJ or the International Consortium of Investigative Journalists’ report on Panama Papers.

The leak also provides details of the hidden financial dealings of 128 more politicians and public officials around the world. The cache of 11.5 million records shows how a global industry of law firms and big banks sells financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars. These are among the findings of a yearlong investigation by the International Consortium of Investigative Journalists, German newspaper Süddeutsche Zeitung and more than 100 other news organizations.

The files expose offshore companies controlled by the prime ministers of Iceland and Pakistan, the king of Saudi Arabia and the children of the president of Azerbaijan.

The network of secret offshore deals and vast loans worth $2billion has laid a trail to Putin, reports the Guardian.

Though the Russian president’s name does not appear in any of the records, the data reveals a pattern—his friends have earned millions from deals that seemingly could not have been secured without his patronage. The documents suggest Putin’s family has benefited from this money—his friends’ fortunes appear his to spend, added the Guardian.

The leak of secret documents reveals another side to Putin and classical cellist and conductor Sergey Roldugin’s friendship. The records show Roldugin is a behind-the-scenes player in a clandestine network operated by Putin associates.

The BBC reported that the leak reveals information about 72 current or former heads of state, including Syria’s president Bashar al-Assad, Egypt’s former president Hosni Mubarak, and Libya’s former leader Muammar Gaddafi. It reported Icelandic Prime Minister Sigmundur Gunnlaugsson stored millions of dollars of investments in Iceland’s major banks in an offshore company.

Sueddeutsche Zeitung reported Juan Pedro Damiani, the Uruguayan lawyer who is president of the country’s most popular soccer team and a FIFA ethics expert, managed companies through which FIFA members may have received bribes.

The ICIJ also state that the documents contain “the names of nearly 20 high-profile soccer players, past and present, representing some of the globe’s best-known professional football clubs, including Barcelona, Manchester United and Real Madrid", as well as “current or former owners of at least 20 major soccer clubs, including Internazionale Milano and Boca Juniors".

Outside of football, the ICIJ states that the names of at least five golfers, as well as a number of NHL players, appear in the documents.

The ripple effects of the leak have already started to show, at least in Iceland.

Iceland’s prime minister Sigmundur Davíð Gunnlaugsson is this week expected to face calls in parliament for a snap election after the Panama Papers revealed he and his wife is among several leading politicians around the world with links to secretive companies in offshore tax havens, reported the Guardian.

An anonymous source apparently tipped off Suddeutsche Zeitung, an investigative newspaper in Germany, which then shared the information with ICIJ.

The ICIJ report states that it includes information on “29 billionaires from Forbes list of top 500 Richest" as well as movie star Jackie Chan, and soccer star Lionel Messi, who ranked fourth on Forbes’ 2015 list of highest paid athletes.

The Forbes report lists the billionaires and former billionaires who are mentioned in stories reporting on The Panama Project or have ties to entities mentioned. The list is incomplete.

So, how did the Panama agent offer secrecy? The offshore entity need not appoint natural persons as directors or have individuals as shareholders. The Registered Agent, Mossack Fonseca in this case, offers its own executives to serve as shareholders or directors. Sometimes, an intermediary law firm or a bank acts as a director or a nominee shareholder. So the real beneficiary remains hidden, reported the Indian Express .

Criminal investigations are sure to follow in dozens of countries, and more revelations are sure to emerge as the documents are pored over more thoroughly.

Though the details are shocking, the leaks also offer the most granular look ever at a banal reality that’s long been hiding in plain sight. Even as the world’s wealthiest and most powerful nations have engaged in increasingly complex and intensive efforts at international cooperation to smooth the wheels of global commerce, they have willfully chosen to allow the wealthiest members of Western society to shield their financial assets from taxation (and in many cases divorce or bankruptcy settlement) by taking advantage of shell companies and tax havens.

If you are a wealthy business owner in Germany who has decided to evade tax, an international drugs dealer or the head of a brutal regime, the methods are all pretty similar. There are shell companies, offshore financial centres, bearer shares and bonds, among others.

And though there is nothing unlawful about using offshore companies, the files raise fundamental questions about the ethics of such tax havens—and the revelations are likely to provoke urgent calls for reforms of a system that critics say is arcane and open to abuse.

At one end of this spectrum, the papers simply reveal the vast number of people who use offshore to protect their wealth. There is nothing unlawful about doing this. It is not illegal to be a director, shareholder or beneficial owner—the real owner, even though their name may not appear on the shareholder register—of an offshore company. But the financial advantages these structures provide are not generally available to the ordinary taxpayer.

Unsurprisingly, the public is questioning—perhaps more than ever—whether a system that provides advantages only to the wealthy is immoral. And the political climate that once tolerated this inequality has changed decisively, wrote the Guardian.

At the other end of this spectrum there is, frankly, what could be described as offshore pandemonium.

Mapping the Panama Leaks

Switzerland and Hong Kong have the maximum number of companies, clients and beneficiaries named in the confidential documents, leaked from Panamanian law firm Mossack Fonseca. Mossack Fonseca, which the BBC calls “as one of the world’s most secretive companies", had allegedly helped its clients “launder money, dodge sanctions and evade tax." These documents, eleven million in all, known as the Panama Papers, were first leaked to German newspaper Sueddeutsche Zeitung, which later “shared them with the International Consortium of Investigative Journalists." The data cache worth 2.6 terabyte is reportedly the largest ever leak.

While the likes of Russian president Vladimir Putin, Barcelona and Argentina footballer Lionel Messi, Ukrainian prime minister Petro Poroshenko and other global financial and political elite have made headlines with their names featuring in the Panama Papers, Irish Times digital production editor Brian Kilmartin created a map of the countries implicated in the controversy.

Switzerland, with 38,433 companies leads the chart, while Hong Kong with 37,919 companies comes in a close second. India, in comparison, has only 21 companies with 384 beneficiaries.

How did the Süddeutsche Zeitung (SZ) get the Panama Papers in the first place?

It was over a year ago that the German newspaper, Süddeutsche Zeitung was contacted by an anonymous source, who submitted documents from Mossack Fonseca, “a Panamian law firm that sells anonymous offshore companies around the world." The newspaper revealed, “In the months that followed, the number of documents continued to grow far beyond the original leak." The source, the newspaper said, “wanted neither financial compensation or anything else in return, apart from a few security measures." Bastian Obermayer, investigative reporter with the Süddeutsche Zeitung tweeted as much, “Hello. This is John Doe. Interested in data? I’m happy to share- this is how it started more than a year ago #panamapapers #craziestyearever."

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