Authorities across the globe have opened investigations into the activities of the world’s rich and powerful after a cache of leaked documents from a Panamanian law firm showed possible wrongdoing using offshore company structures.
The “Panama Papers” have cast light on the financial arrangements of high-profile politicians and public figures and the companies and financial institutions they use for such activities.
Among those named in the documents are friends of Russian President Vladimir Putin and relatives of the leaders of China, Britain, Iceland and Pakistan, and the president of Ukraine.
Leading figures and financial institutions responded to the massive leak of more than 11.5million documents with denials of any wrongdoing as prosecutors and regulators began a review of the reports from the investigation by the US-based International Consortium of Investigative Journalists (ICIJ) and other media organisations.
Following the reports, China has moved to limit local access to coverage of the matter, with state media denouncing Western reporting on the leak as biased against non-Western leaders.
France, Australia, New Zealand, Austria, Sweden and the Netherlands are among nations that have commenced investigations, and some other countries, including the US, said they were looking into the matter.
Mossack Fonseca, the Panamanian law firm at the centre of the leaks, has set up more than 240000 offshore companies for clients around the globe and denies any wrongdoing.
It calls itself the victim of a campaign against privacy and claims media reports misrepresent the nature of its business.
In a printed statement given to reporters by a staff member at Mossack Fonseca’s Hong Kong office yesterday, the firm said it had never been charged with or formally investigated for criminal wrongdoing in its nearly 40 years of operation.
“We do not advise clients on how to operate their businesses.
“We don’t link ourselves in any way to companies we help incorporate,” the firm said.
“Excluding the professional fees we earn, we don’t take possession of clients’ money, or otherwise have anything to do with any of the direct financial aspects related to operating these businesses.”
Mossack Fonseca also said it supports international initiatives requiring greater transparency of newly incorporated firms and trusts, and has implemented such measures as part of its own due diligence.
The staff at the office declined to answer questions.
The Hong Kong government said its Inland Revenue Department had taken note of the recent release of the documents and would take “necessary action” based on any information it gets. It will not comment on individual cases or disclose the course of action because of secrecy provisions in Hong Kong tax law, the government said.
Credit Suisse and HSBC, two of the world’s largest wealth managers, yesterday dismissed suggestions they were actively using offshore structures to help clients cheat on their taxes.
Both were named among the banks that helped set up complex structures that make it hard for tax collectors and investigators to track the flow of money from one place to another, according to ICIJ.
Credit Suisse chief executive Tidjane Thiam, who is aggressively targeting Asia’s wealthiest for growth, said his bank was only after lawful assets.
Speaking at a media briefing in Hong Kong, he acknowledged the bank uses offshore financial structures, but only for very wealthy customers with assets in multiple jurisdictions and did not support their use for tax avoidance or allow them without knowing the identities of all those concerned.
“We do not condone structures for tax avoidance,” he said.
“Whenever there is a structure with a third party beneficiary we insist to know the identity of that beneficiary.”
Separately, HSBC said the documents pre-dated a thorough reform of its business model.
Both banks have in recent years paid large fines to US authorities over their wealth management or banking operations.
Panama papers probes under way
The “Panama Papers” have cast light on the financial arrangements of high-profile politicians and public figures and the companies and financial institutions they use for such activities.
Among those named in the documents are friends of Russian President Vladimir Putin and relatives of the leaders of China, Britain, Iceland and Pakistan, and the president of Ukraine.
Leading figures and financial institutions responded to the massive leak of more than 11.5million documents with denials of any wrongdoing as prosecutors and regulators began a review of the reports from the investigation by the US-based International Consortium of Investigative Journalists (ICIJ) and other media organisations.
Following the reports, China has moved to limit local access to coverage of the matter, with state media denouncing Western reporting on the leak as biased against non-Western leaders.
France, Australia, New Zealand, Austria, Sweden and the Netherlands are among nations that have commenced investigations, and some other countries, including the US, said they were looking into the matter.
Mossack Fonseca, the Panamanian law firm at the centre of the leaks, has set up more than 240000 offshore companies for clients around the globe and denies any wrongdoing.
It calls itself the victim of a campaign against privacy and claims media reports misrepresent the nature of its business.
In a printed statement given to reporters by a staff member at Mossack Fonseca’s Hong Kong office yesterday, the firm said it had never been charged with or formally investigated for criminal wrongdoing in its nearly 40 years of operation.
“We do not advise clients on how to operate their businesses.
“We don’t link ourselves in any way to companies we help incorporate,” the firm said.
“Excluding the professional fees we earn, we don’t take possession of clients’ money, or otherwise have anything to do with any of the direct financial aspects related to operating these businesses.”
Mossack Fonseca also said it supports international initiatives requiring greater transparency of newly incorporated firms and trusts, and has implemented such measures as part of its own due diligence.
The staff at the office declined to answer questions.
The Hong Kong government said its Inland Revenue Department had taken note of the recent release of the documents and would take “necessary action” based on any information it gets. It will not comment on individual cases or disclose the course of action because of secrecy provisions in Hong Kong tax law, the government said.
Credit Suisse and HSBC, two of the world’s largest wealth managers, yesterday dismissed suggestions they were actively using offshore structures to help clients cheat on their taxes.
Both were named among the banks that helped set up complex structures that make it hard for tax collectors and investigators to track the flow of money from one place to another, according to ICIJ.
Credit Suisse chief executive Tidjane Thiam, who is aggressively targeting Asia’s wealthiest for growth, said his bank was only after lawful assets.
Speaking at a media briefing in Hong Kong, he acknowledged the bank uses offshore financial structures, but only for very wealthy customers with assets in multiple jurisdictions and did not support their use for tax avoidance or allow them without knowing the identities of all those concerned.
“We do not condone structures for tax avoidance,” he said.
“Whenever there is a structure with a third party beneficiary we insist to know the identity of that beneficiary.”
Separately, HSBC said the documents pre-dated a thorough reform of its business model.
Both banks have in recent years paid large fines to US authorities over their wealth management or banking operations.
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