Governments in many countries, including the US and the UK, began official inquiries and looking into possible financial wrongdoing by the rich and powerful after leaked documents surfaced Sunday from a Panamanian firm that specialized in setting up shell companies and tax shelters.
The so-called Panama Papers revealed financial arrangements of politicians and public figures including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain, Iceland and Pakistan, as well as some high and mighty in China and Hong Kong.
While holding money in offshore companies is not illegal, journalists who received the leaked documents said they could provide evidence — in some cases — of wealth hidden for tax evasion, money laundering, sanctions busting, drug deals or other crimes, Reuters reported.
The Panama papers were published on Sunday by several newspapers across the globe, in an initiative overseen by the International Consortium of Investigative Journalists (ICIJ).
The law firm at the center of the leak, Mossack Fonseca, said it was the victim of a data breach.
The company, which says it has set up more than 240,000 offshore companies for clients around the globe, said media reports had “misrepresented the nature of our work.”
We have “operated beyond reproach in our home country and in other jurisdictions where we have operations,” it said in a statement. “Our firm has never been accused or charged in connection with criminal wrongdoing.”
Germany’s Süddeutsche Zeitung said it had received the documents relating to the Panamanian law firm from an unidentified source and shared them with more than 100 other news organizations.
The US Justice Department said Monday that it is reviewing the documents to see if they constitute evidence of corruption that could be prosecuted in the US, the Wall Street Journal reported.
Similar probes were announced in France, the UK and the Netherlands.
Among the most prominent claims in the new documents is one placing Russian President Vladimir Putin’s childhood friend Sergei Roldugin and a high-profile Russian bank at the center of transactions amounting to at least US$2 billion, the Journal noted.
Kremlin spokesman Dmitry Peskov said the reports didn’t implicate Putin himself, and dismissed the allegations as “the usual conjecture, insinuation, speculation, which don’t demand a reaction.”
According to the ICIJ, the documents also identified offshore firms controlled by eight relatives of current or former members of China’s Politburo Standing Committee, the Communist Party’s top decision-making body.
The people involved included Deng Jiagui, a real-estate developer who is the brother-in-law of President Xi Jinping.
Deng is alleged to have become the sole director and shareholder of two British Virgin Islands-based companies in 2009.
It is unclear what those two companies were used for and by the time Xi took power in late 2012, the companies were dormant, the ICIJ said.
The group also named Li Xiaolin, the daughter of former Premier Li Peng, and her husband Liu Zhiyuan as the ultimate owners of a Liechtenstein-based foundation that was sole shareholder of a BVI-incorporated company.
Jasmine Li, the granddaughter of recently retired Politburo Standing Committee member Jia Qinglin, was identified in the documents as the sole shareholder of two BVI companies, the ICIJ said.
The ICIJ didn’t present any evidence of wrongdoing by any of the China-related individuals or companies it identified, the Journal noted.
In Iceland, Prime Minister Sigmundur David Gunnlaugsson came under attack from political opponents after his name surfaced in the documents.
Among well-known Hong Kong figures, movie star Jackie Chan’s name cropped up in the papers.
The documents suggested that Chan had at least six companies managed by Mossack Fonseca, but the ICIJ said that there is no evidence that the celebrity used the companies for illegal purposes.
The documents implicated prominent or well-connected people in other places including Saudi Arabia, United Arab Emirates, Qatar, Pakistan, South Africa and Latin America.
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