Panama Papers reveal offshore accounts of HK tycoons, officials

April 20, 2016 14:20
Mossack Fonseca clients named in the Panama Papers include (clockwise from top left): Lau Wong-fat, Kenneth Lau, Henry Tang, Paul Chan and Lau Wai-ming. Photos: Reuters, HKEJ, CNSA

Hong Kong tycoons and senior government officials are among the thousands of clients of Mossack Fonseca who engaged the Panama-based law firm to set up offshore accounts or companies, investigations by local media show.

Details in the Panama Papers leak have led governments around the world, including the United States, to start investigating possible financial wrongdoing by the world’s rich and powerful.

While the Hong Kong government has kept silent since the leak last month, investigations by Ming Pao Daily, Next Magazine and news website have named some of the city’s movers and shakers as Mossack clients.

Based on some of the 11.5 million documents obtained by the three media outlets from the International Consortium of Investigative Journalists (ICIJ), they report that CK Hutchison Holdings Ltd. (00001.HK) chairman Li Ka-shing, the city’s richest man, and Henderson Land Development Co. (00012.HK) chairman Lee Shau-kee set up offshore companies with the help of Mossack to manage their assets.

There has been no suggestion that any wrongdoing was involved in those cases.

Other prominent businessmen who were clients include lawmaker and former Heung Yee Kuk chairman Lau Wong-fat (劉皇發) and Barry Cheung Chun-yuen (張震遠), a former member of the Executive Council and former chairman of the Hong Kong Mercantile Exchange (HKMEx).

It has been revealed that, between 2006 and 2008, Cheung was a director of seven companies registered in the British Virgin Islands, a popular tax haven, which he failed to report on his declaration of interests form when was chairman of the Urban Renewal Authority in 2007.

Meanwhile, the Panama Papers showed that Lau and his family held three offshore companies.

One of the leaked documents revealed that Lau and his elder son, Kenneth Lau Ip-keung (劉業強), who succeeded his father as chairman of the kuk, a statutory rural advisory body, hold British citizenship.

Kenneth Lau said Wednesday that he and his father have Chinese, not British, nationality.

He said they had not updated the information in the offshore companies' documents.

Under the Basic Law, the chief executive, Exco members, lawmakers and principal government officials shall be Chinese citizens who are permanent residents of Hong Kong with no right of abode in any foreign country.

Property tycoon Joseph Lau Luen-hung's son Lau Ming-wai (劉鳴煒), who chairs the Commission on Youth and is considered a rising political star, was also found to have British citizenship, which he would need to give up should he become a lawmaker or an Exco member in future, Ming Pao said.

The younger Lau said it was his late mother, Teresa Bo Wing-kam, who helped him apply for British citizenship when he was young.

Among government officials named in the documents is Development Secretary Paul Chan Mo-po, who reportedly set up at least two offshore companies.

In a reply to an enquiry from, Chan said he has been declaring his interests according to the rules since he assumed his post in 2012.

Former chief secretary Henry Tang Ying-yen set up an offshore company with Christopher Cheng Wai-chee, chairman of Wing Tai Properties Ltd., two weeks before Hong Kong was handed over to China in 1997, the leaked documents show.

Tang said there was no wrongdoing involved in the matter.

He said in a statement Tuesday he had strictly followed the rules on declaring conflicts of interest when he was an Exco member between 1997 and 2002 and a government official between 2002 and 2011.

Tang said he had transferred all his stake in his family business to a trust company, to which he had no right to issue instructions, before joining the government. 

An analysis done by the ICIJ found Hong Kong was home to 2,212 intermediaries that helped clients to set up offshore companies and other entities to hide their wealth, more than any other place in the world.

Mossack, which is being accused of helping some of its clients to evade tax and launder money, said it has been conducting thorough due diligence on all its clients, most of which are law firms and financial institutions with proven track records.

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