Offshore data tsunami exposes Asian dirty money at serene islands

After several exposé, there seems to be no shortage of rich and powerful people in South Asia too holding offshore companies or trusts – as revealed by the Pandora Papers, the largest trove of leaked offshore data in history carried by major international media.

For example, Binod Chaudhary, the lone billionaire in the tiny Himalayan country Nepal whose real time net worth amounts to $1.4 billion, used tax havens such as the British Virgin Islands for money laundering, according to the leaks.

"The Chaudhary family has registered companies Cinnovation Incorporated, CG Hotels and Resorts Limited, Sensei Capital Partners Inc in BVI [British Virgin Islands], and CG Hospitality Holdings Global Pte Ltd in Singapore," states the Pandora Papers report published on Sunday night.

The papers expose the secret offshore deals and assets of more than 100 billionaires, 30 world leaders and 300 public officials. In the South Asian region, the list includes seven Pakistani politicians, six Indian, two Sri Lankan, Indonesian, and Malaysian each and three Filipino politicians who reportedly stashed money in tax havens, keeping the financial affairs shielded from public scrutiny.

In Asia, the papers suggest "key members" of Pakistan Prime Minister Imran Khan's inner circle have investments in offshore tax havens. The leaks found that Imran Khan's cabinet ministers and their families secretly own companies and trusts holding millions of dollars, reports the BBC.

Pakistani Finance Minister Shaukat Tarin and Water Resources Minister Moonis Elahi were named in the papers, according to the International Consortium of Investigative Journalists (ICIJ) that mined the leaks amounting to 2.94 terabytes of data.

The ICIJ gave 600 journalists around the world remote access to the leaked data to facilitate the largest journalistic collaboration in history. They include reporters from the Guardian, the BBC, Le Monde and the Washington Post, according to the Guardian.

Among the Indian businesspersons and celebrities with financial affairs in offshore tax havens, Anil Ambani, John Shaw, Nirav Modi and former cricketer Sachin Tendulkar have been named in the papers who have assets in Anguilla, Belize, Singapore, Switzerland, Panama, Barbados, Cyprus, Dubai, the Bahamas, Seychelles and Vietnam.

Tendulkar, who has also been a former MP, and members of his family owned an offshore firm in the British Virgin Islands, which was wound up in 2016, reported the BBC.

"The investments were legitimate and taxes were paid on the funds," the report quoted the cricketer's spokesperson.

The documents also showed that Indian businessman Anil Ambani and his representatives owned at least 18 offshore companies in Jersey, British Virgin Islands and Cyprus, according to the Indian Express, part of the ICIJ consortium.

Former Sri Lankan minister Nirupama Rajapaksa has been mentioned in the leaks. According to the ICIJ, Nirupama Rajapaksa and her husband Thirukumar Nadesan together controlled a shell company they used to buy luxury apartments in London and Sydney, and to make investments.

According to leaked files, CY Leung, former chief executive, Hong Kong; Tung Chee-hwa, former chief executive, Hong Kong; Sükhbaataryn Batbold, former prime minister, Mongolia; and Qiya Feng, delegate, Henan province, China, have financial deals in those tax havens.

Moving money offshore is not in or of itself illegal, and there are legitimate reasons why some people do it.

The Guardians, however, says the offshore industry has grown exponentially in recent decades, driven by wealthy individuals and corporations in search of sophisticated mechanisms for avoiding tax. While much of this may be legal, some of it is not; these secretive jurisdictions have also proved attractive to fraudsters, money launderers and tax evaders.

Billions hidden beyond reach

Jordan's King Abdullah, a close US ally, was alleged to have used offshore accounts to spend more than $100 million on luxury homes in the United Kingdom and the United States, revealed the leaks.

"It is no secret that His Majesty owns a number of apartments and residences in the United States and the United Kingdom. This is not unusual nor improper," responding to the leaks, the royal palace in a statement told Reuters.

"The cost of these properties and all related expenditures have been personally funded by His Majesty. None of these expenses have been funded by the state budget or treasury."

Former British Prime Minister Tony Blair and his wife Cherie Blair saved £312,000 in stamp duty tax in 2017 when buying a property in London. Instead of buying the property directly – and paying the tax that comes with that – he and his wife Cherie bought an offshore company that owned the building, said the BBC.

The Washington Post, which is part of the consortium, also reported on the case of Svetlana Krivonogikh, a Russian woman who it said became the owner of a Monaco apartment through an offshore company incorporated on the Caribbean island of Tortola in April 2003 just weeks after she gave birth to a girl.

At the time, she was in a secret, years-long relationship with Putin, the newspaper said, citing Russian investigative outlet Proekt. The Post said Krivonogikh and her daughter, who is now 18, did not respond to requests for comment.

The Kremlin said it had seen no evidence. "For now it is just not clear what this information is and what it is about," Kremlin spokesperson Dmitry Peskov said.

Days ahead of the Czech Republic's 8-9 October parliamentary election, the documents allegedly tied the prime minister, Babis, to a secret $22 million estate near Cannes, France. Speaking in a television debate, Babis denied wrongdoing, reported Reuters.

"The money left a Czech bank, was taxed, it was my money, and returned to a Czech bank," Babis said.

Multiple media reports suggest pop stars Shakira, Elton John and Ringo Star, German supermodel Claudia Schiffer, as well as Spanish singer Julio Iglesias are among the celebrities named in the Pandora Papers.

An attorney for Shakira told the ICIJ that the Colombian singer denies all wrongdoings.