adminLONDON AND PANAMA CITY -Governments across the world began investigating possible financial wrongdoing by the rich and powerful on Monday following a leak of four decades of documents from a Panamanian law firm that specialised in setting up offshore companies. The Panama Papers revealed financial arrangements of global politicians and public figures including friends of Russian President Vladimir Putin, relatives of the prime ministers of Britain, Iceland and Pakistan, and the president of Ukraine.
South Africans too were ensnared in the leaks.
President Jacob Zuma’s nephew Khulubuse Zuma was named in the documents held by law firm Mossack Fonseca as being authorised to represent Caprikat Ltd, one of two offshore companies that controversially acquired oil fields in the Democratic Republic of Congo.
Fidentia’s J Arthur Brown and Gary Porritt of the Tigon scandal were other South Africans mentioned.
While holding money in offshore companies is not illegal, journalists who received the leaked documents said they could provide evidence of funds hidden for tax evasion, money laundering, sanctions busting, drug deals or other crimes.
The law firm, which says it has set up more than 240 000 offshore companies for clients around the globe, denied any wrongdoing and called itself the victim of a campaign against privacy.
The Kremlin said the documents contained “nothing concrete and nothing new” while a spokesman for British Prime Minister David Cameron said his late father’s reported links to an offshore company were a “private matter”.
Iceland Prime Minister Sigmundur Gunnlaugsson said: “I have neither considered resignation nor do I intend to”, after his wife was named in connection with a secretive company in an offshore haven, which brought opposition calls for him to step down.
Pakistan denied any wrongdoing by the family of Prime Minister Nawaz Sharif after his daughter and son were linked to offshore companies.
Ukrainian President Petro Poroshenko did not comment on the offshore links reported after the disclosures.
Australia, Austria, France, Sweden and the Netherlands were among countries that said they had begun investigating the allegations, based on more than 11.5-million documents from Mossack Fonseca.
Banks came under the spotlight for allegedly helping clients hide their funds offshore.
The documents were leaked to more than 100 news organisations around the world co-operating with the International Consortium of Investigative Journalists (ICIJ).
“I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents,” ICIJ director Gerard Ryle said.
The British government asked for a copy of the leaked data, which could be embarrassing for Mr Cameron, who has spoken out previously against tax evasion and tax avoidance.
His late father, Ian Cameron, a wealthy stockbroker, is mentioned in the files, alongside some members of his Conservative Party, former Conservative MPs and party donors.
Jennie Granger, head of enforcement and compliance at HM (Her Majesty’s) Revenue and Customs, said the government would examine the information “and act on it swiftly and appropriately”.
The Australian Tax Office said it was investigating more than 800 wealthy Mossack Fonseca clients and had linked more than 120 of them to an associate offshore service provider in Hong Kong, which it did not name.
The disclosures drew angry reactions from some quarters.
German Economy Minister Sigmar Gabriel questioned the morals of the financial world.
The British-based Tax Justice Network said too many offshore lawyers, accountants and bankers saw it as their role to shield their clients from financial regulations designed to prevent money laundering, tax evasion and corruption.
Austria’s financial markets regulator FMA is probing whether lenders Raiffeisen Bank International and Hypo Landesbank Vorarlberg followed the rules on money laundering.
-Reuters, Bloomberg
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