Finally, the wait across the globe is over as the International Consortium of Investigative Journalists (ICIJ) has unveiled “Pandora Papers” — major international research into the financial secrets held by high-profile individuals around the world.
The investigation, involving some 600 journalists from media organisations across the globe is based on the leak of around 11.9 million documents from 14 financial services companies around the world.
Some 35 current and former leaders from across the world are featured in the documents analysed by the International Consortium of Investigative Journalists (ICIJ) — facing allegations ranging from corruption to money laundering and global tax avoidance.
700 Pakistanis named in the leaks
The current Finance Minister Shaukat Tarin, Senator Faisal Vawda, Pakistan Muslim League-Quaid leader and Federal Minister for Water Resources, Chaudhry Moonis Elahi, Ishaq Dar’s son, PPP’s Sharjeel Memon, the family of Minister for Industries and Production Khusro Bakhtiar, PTI leader Abdul Aleem Khan and Axact CEO Shoaib Sheikh, Arif Naqvi of Abraaj group, along with the renowned businessmen, retired army generals and their family members have been named among those with alleged links to offshore companies.
Several world leaders named in Pandora Papers
At least 35 world leaders are among those who own offshore companies, according to Pandora Papers.
Jordan’s King Abdullah II amassed about $100m worth of property in the United States and United Kingdom through secret companies. They were purchased between 2003 and 2017 via firms registered in tax havens and include properties in Malibu, southern California, and Washington and London.
The leaked files also showed that in neighbouring Lebanon, top political and financial figures have embraced offshore havens.
These include Prime Minister Najib Mikati, his predecessor Hassan Diab, Riad Salameh, the governor of Lebanon’s central bank – currently under investigation in France for alleged money laundering – and former minister of state and the chairman of Al Mawarid Bank Marwan Kheireddine.
Tony Blair, the UK prime minister from 1997 to 2007, became the owner of an $8.8m Victorian building in 2017 by buying a British Virgin Islands company that held the property, and the building now hosts the law firm of his wife, Cherie Blair, according to the investigation.
Safe tax heavens
According to the ICIJ, tax havens or offshore financial centres are typically countries or places with low or no corporate taxes that allow outsiders to easily set up businesses there.
The offshore companies have been set up in the safe tax havens from the British Virgin Islands, Seychelles, to Hong Kong and Belize.
“Tax havens also typically limit public disclosure about companies and their owners. Because information can be hard to extract, tax havens are sometimes also called secrecy jurisdictions,” it says.
Offshore bank accounts and other financial dealings in another country can be used to evade regulatory oversight or tax obligations.
Companies or individuals often use shell companies, initially incorporated without significant assets or operations, to disguise ownership or other information about the funds involved.
Is setting up an offshore company illegal?
Under the law, setting up an offshore company is not an offence or crime if the company is not involved in any illegal activity. However, those who have not declared these companies in their returns as assets can face legal action.
In Pakistan, the law requires the owners of such companies to declare them to tax authorities and the Security and Exchange Commission of Pakistan (SECP). Once that is done, there should be no legal implications unless a misrepresentation of facts is spotted in the declaration,.
Companies or trusts can be set up in offshore locations for legitimate uses such as business finance, mergers and acquisitions and estate or tax planning, according to the global money laundering watchdog, the Financial Action Task Force.
Further, wealthy people who live in countries with unstable political situations, high levels of corruption, or high levels of criminal activity such as kidnapping or extortion could use offshore accounts and the secrecy they provide for protection, and not necessarily to avoid taxes.
PM Imran establishes high-level cell to probe Pandora leaks
Prime Minister Imran Khan who welcomed the ICIJ’s Pandora leaks soon after the revelations and on Monday he has constituted a high-level commission to probe Pakistanis named in leaked financial documents, under the name of ‘Pandora Papers.’
The announcement was made by Federal Minister for Information and Broadcasting Fawad Chaudhry from his Twitter handle.
“The high-level cell under the Prime Minister’s Inspection Commission will investigate all individuals mentioned in the Pandora Papers and will present facts before the nation,” the Information and Broadcasting Minister said in a Tweet. Now we have to see the outcome of the probe and will the action be taken against the guilty or it will be a mere probe just like in the past, the country has been witnessing.
