Consortium exposes intricate web of offshore trusts . . .
Nearly 12 million leaked financial records, dubbed the ‘Pandora Papers,’ offer new and unparalleled insight into the use of offshore tax havens by global elites. Asia features prominently. The International Consortium of Investigative Journalists (ICIJ), a coalition of 150 media organizations that broke the ‘Panama Papers’ and ‘Paradise Papers,’ released documents on Sunday after two years of investigations. Those implicated range from Russian President Vladimir Putin to former British Prime Minister Tony Blair, while the CBC and the Toronto Star, both ICIJ partners, have identified at least 500 Canadians in the papers. While not illegal, the scale and secrecy of the complicated web of offshoring arrangements raise concerns over tax evasion and corruption. An OECD study in 2020 estimated that at least C$14.3 trillion globally is hidden offshore away from tax authorities.
China’s financial offshoring, former Hong Kong leaders face scrutiny . . .
The Pandora Papers identify Chinese companies' extensive use of offshore financing to acquire and manage overseas assets. The Wire China reports that while it is well-known that Chinese firms set up offshore shell companies to seek foreign investment, China’s global expansion through the Belt and Road Initiative and other campaigns has facilitated the investment of Chinese capital abroad using offshore companies. This practice helps state and private enterprises sidestep Chinese and foreign financial reporting rules, while shrouding investments in anonymity. Meanwhile, two former leaders of Hong Kong – Leung Chun-ying and Tung Chee-hwa – are on the defensive after local ICIJ partner Stand News revealed their use of offshore shell companies to manage assets worth millions. Leung rebuffed the charges, claiming there is no requirement for officials to declare assets held indirectly through trusts.
Singapore under spotlight; politicians, business leaders implicated . . .
Singapore features prominently in the investigation as the location of Asiaciti Trust, from which nearly one-sixth of the papers originate. The firm was fined C$1 million last year for failure to conduct due diligence on “unusually large transactions.” Singaporean authorities have signalled they are investigating. Meanwhile, Malaysia’s main opposition leader called for an emergency debate in Parliament as several current and former politicians – including the sitting finance minister – were named in local ICIJ partner Malaysiakini’s investigation. The papers also list numerous politicians and political donors in Indonesia and the Philippines, and name hundreds of prominent businesspeople in Japan and Korea. Many elites across Asia implicated in the leak have threatened to sue local ICIJ partners for libel and misinformation.
- Associated Press: Pandora Papers leak prompts calls for action in Asia
- The Straits Times: Some of Asia’s elite in the spotlight after leak of Pandora Papers
- The Wire China: China’s shell game