The Panama Papers have set off a tornado that has so far swept many countries across the globe, current and former heads of state, the rich and famous in films, sports, their family and associates besides criminals in its wake.
What are the Panama papers?
On April 3, 2016, the International Consortium of Investigative Journalists (ICIJ) put out an in-depth, investigated and analysed report that blows the lid off tax evasion and secret offshore dealings of the powerful, rich and famous across the globe in 21 offshore jurisdictions such as Nevada, Niue, Samoa, British Anguilla, Hong Kong, Tortola, Seychelles and the British Virgin Islands. The 12 current and former heads of state from Iceland, Ukraine, Pakistan, Saudi Arabia, Russia and Argentina also figure on the list. It also provides data on some 214,000 companies.
The whopping 11.5 million confidential Mossack Fonseca documents were leaked, revealing 2.6 terabytes of data, covering nearly 40 years of records.
“It allows a never-before-seen view inside the offshore world providing a day-to-day, decade-by-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues,” the ICIJ said.
Why is it called the Panama Papers?
The tax evaders stashed funds in Mossack Fonseca, a law firm and corporate service provider based in Panama.
The Republic of Panama is located between North and South America.
Mossack Fonseca, founded in 1977 by German-born Jurgen Mossack and Ramon Fonseca, specializes in commercial law, trust services, investor advisory and international structures. The law firm’s website claims it is one of the largest firms in the corporate services industry and has over 40 offices globally. It also offers intellectual property protection and maritime law services.
The Munich-based daily, Sueddeutsche Zeitung, which got the secret papers and shared it with ICIJ, says in its report that Mossack Fonesca sells anonymous offshore companies around the world. These shell firms enable their owners to cover up their business dealings, no matter how shady.
Mossack Fonesca is the world’s fourth biggest offshore law firm.
Why would anyone invest in a shell company?
It is not illegal to own a shell company. Usually, the world’s famous people who do not want to be seen as the real owners of assets prefer to invest in a shell company anonymously. However, that is not legal. Buying a shell company is a good source of stashing away money that you don’t want anyone to know– bankers, government, the taxman, and also your wife or husband. If the money is ill-gotten wealth, all the more reasons to invest in a shell company. A lawyer is a brilliant cover to buy a shell company, if you don’t want to do it yourself.
Who leaked information?
The story has the pulsating adrenalin rush of a James Bond film. The Munich-based daily Sueddeutsche Zeitun received 11.5 million data spanning a time-frame of 40 years (1997 to 2015) through an encrypted channel. Bastian Obermayer, a reporter of the daily, says the whopping information was given gratis with a request for security in return.
After receiving the records of 214,488 offshore entities through emails, financial spreadsheets, passports and corporate records, the ICWJ put 370 journalists from across 80 countries on the job of tracing the hidden offshore assets of a roster of people in over 200 countries.
What is the India link?
The Panama Papers have a few Indian names from business families, well-known lawyers and family members, Bollywood actors and also criminals.
- Amitabh Bachchan
- Aishwarya Rai-Bachchan
- Kushal Pal Singh, DLF owner and 9 members of his family
- Sameer Gehlaut, Chairman & Founder, Indiabulls Group
- Vinod Adani, industrialist Gautam Adani’s elder brother
- Shishir K Bajoria – promoter of SK Bajoria Group and politician from West Bengal
- Anurag Kejriwal, former chief of the Delhi unit of Loksatta Party
- Onkar Kanwar, chairman of Apollo Group
- Anil Vasudeva Salgaocar , Goa-based mining baron and former MLA
- Mohan Lal Lohia, chairman emeritus, Indo Rama Synthetics, Chairman – Indo Rama Holdings Ltd
- (late) Indira Sivasailam, wife of Anantharamakrishnan Sivasailam, chairman of Amalgamations Group. Her daughter, Mallika Srinivasan – chairman and CEO of Tractors and Farm Equipment Ltd
- Harish Salve, former Solicitor General of India (1999-2002)
- Tabasum and Abdul Rashid Mir, Founder and CEO, Cottage Industries Exposition
- Zavaray Poonawalla, head, managing committee, Royal Western India Turf Club (RWITC) and brother of Dr Cyrus Poonawalla
- Rajendra Patil owns medical and engineering colleges in Davangere. He is the son-in-law of Congressman and Karnataka horticulture minister Shamanur Shivashankarapppa
- Jehangir Soli Sorabjee, honorary consultant physician, at Bombay Hospital. He is the son of former attorney general Soli Sorabjee
- Iqbal Mirchi, underworld don, now dead
Who is the global who’s who?
- Mauricio Macri, President, Argentina
- Vladimir Putin (to be fair, his name does not appear in the records) but his inner circle including his family and best friend and professional musician, Sergei Roldugin
- Sigmundur Davíð Gunnlaugsson, Prime Minister, Iceland
- Salman bin Abdulaziz bin Abdulrahman Al Saud, King of Saudi Arabia
- Sheikh Khalifa bin Zayed bin Sultan Al Nahyan, president of the United Arab Emirates and emir of Abu Dhabi– one of the wealthiest man in the world
- Pavlo Lazarenko, former PM of Ukraine, one of the world's 10 most corrupt politicians by Transparency International,
- Petro Poroshenko, President of Ukraine and billionaire ‘chocolate king
- Lionel Messi and his father who was his agent
- Michel Platini
- Leonardo Ulloa, a top scorer for Leicester City
- Gabriel Iván Heinze from Argentina who played with Manchester United and Real Madrid
Who are the other beneficiaries?
- Li Xiaolin, the second child and only daughter of former Chinese Premier Li Peng
- Ian Cameron, father of British Prime Minister David Cameron. He died on September 8, 2010
- Mariam Safdar, daughter of Pakistan Prime Minister Nawaz Sharif and his sons Hasan and Hussain
- Alaa Mubarak, a wealthy Egyptian businessman, is the eldest son of ousted former Egyptian President Hosni Mubarak
- Mounir Majidi, a businessman and entrepreneur, who was the personal secretary to the King Mohammed VI of Morocco, in 2000.
- Clive Khulubuse Zuma, nephew of South Africa’s president Jacob Zuma.
Where were the intermediaries set up?
Fonseca worked with over 14,000 banks, law firms, company incorporators besides other middlemen to set up companies, foundations and trusts for customers. The top preferred 10 countries are: Hong Kong, United Kingdom, Switzerland, United States, Panama, Guatemala, Luxembourg, Brazil, Ecuador and Uruguay
Reactions from Mossack Fonseca
"This is a crime, a felony," Ramon Fonseca, one of the founders of the Panamanian firm Mossack Fonseca, told AFP, describing the data that was leaked as a 'limited hack'. He was an advisor to Panama's President Juan Carlos Varela until last month. The company washed its hands off the expose and said that the role of the firm was limited to that of an intermediary.