The leak shows how one Panama based company helped clients launder money, dodge sanctions and evade tax

news Panama Papers Monday, April 04, 2016 - 09:12

In a massive leak followed by a large effort in investigative journalism, more than 11 million documents from law firm Mossack Fonseca have been put out in public domain, with high-profile names from Russian President Vladimir Putin's inner circle to the family of Pakistan's prime minister cropping up.

In India, it has been revealed that celebrities like Amithabh Bachchan and businessmen like Indiabulls owner Sameer Gehlaut have held offshore accounts in Panama, possibly in violation of law in a bid evade tax.

According to a report in The Guardian:

Mossack Fonseca is a Panama-based law firm whose services include incorporating companies in offshore jurisdictions. It administers offshore firms for a yearly fee... The leak is one of the biggest ever – larger than the US diplomatic cables released by WikiLeaks in 2010, and the secret intelligence documents given to journalists by Edward Snowden in 2013.

The leak was collaborated by hundreds of journalists as part of The International Consortium of Investigative Journalists (ICIJ).

The BBC reported that the leak showed how Mossack Fonseca had helped clients launder money, dodge sanctions and evade tax and the documents show links to 72 current or former heads of state in the data, including dictators accused of looting their own countries.

According to a report in The Indian Express:

Over 500 Indians figure on the firm’s list of offshore companies, foundations and trusts. There are also 234 Indian passports (handed over by clients as part of the incorporation process).

Some of these names include film stars Amitabh Bachchan and Aishwarya Rai Bachchan, DLF owner K P Singh, Gautam Adani’selder brother Vinod Adani, and the promoters of Apollo Tyres and Indiabulls.

Two politicians and an underworld don Iqbal Mirchi from Mumbai also figured on the list. They are Shishir Bajoria from West Bengal and Anurag Kejriwal, from the Delhi unit of the Loksatta Party. Vijay Mallya's name has also cropped up under the category of a member of parliament

From the south of India, names like Rajendra Patil, son-in-law of Karnataka Horticulture Minister Shamanur Shivashankarappa and Mallika Srinivasan, a businesswoman herself and also the wife of Venu Srinivasan, chairman of TVS Motors, have popped up.

The full list of Indians and their involvement in the issue can be found here.

One of the biggest names in the leak was Vladmir Putin with a $2 Billion offshore trial that starts in Panama, darts through Russia, Switzerland and Cyprus, leads to people in his most inner-circle

As The Guardian puts it, though the president’s name does not appear in any of the records, the data reveals a pattern – his friends have earned millions from deals that seemingly could not have been secured without his patronage.

Pakistan Prime Minister Nawaz Sharif is also in the dock as sons and daughter, Hussain and Hasan Nawaz Sharif, and Mariam Safdar, set up at least four offshore companies in British Virgin Islands (BVI). These companies owned at least six upmarket properties in London, four of which were mortgaged to the Deutsche Bank (Suisse) SA for a loan of GBP 7 million.

The leaks even named people in the field of sports, from Juan Pedro Damiani, a key member of FIFA's ethics committee, to Lionel Messi and his father.

The ICIJ also states that the documents contain "the names of nearly 20 high-profile soccer players, past and present, representing some of the globe’s best-known professional football clubs, including Barcelona, Manchester United and Real Madrid", as well as "current or former owners of at least 20 major soccer clubs, including Internazionale Milano and Boca Juniors".  

The company has since said that it has operated "beyond reproach for 40 years" and has never been charged with criminal wrong-doing.

Vox reported:

Tax avoidance is an inevitable feature of any tax system, but the reason this particular form of avoidance grows and grows without bounds is that powerful politicians in powerful countries have chosen to let it happen. As the global economy has become more and more deeply integrated, powerful countries have created economic "rules of the road" that foreign countries and multinational corporations must follow in order to gain lucrative market access.

For more clarity on the legal status of offshore accounts in India, watch this Indian Express explainer.