The Panama Papers are a huge number of documents released by the International Consortium of Investigative Journalists, revealing a network of secret offshore accounts held by the rich and powerful.
Among the documents leaked from secretive Panama-based law firm Mossack Fonseca are details of shady dealings by famous figures from around the world. While offshore companies are not in themselves illegal, they are used for money laundering and tax evasion.
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
Famous Indians implicated in Panama Papers leak
A huge number of rich and famous Pakistani and Indian figures are involved in the leak. In India the Panama Papers leaks have involved a Bollywood star, a former Miss World and prominent families from real estate, business and legal worlds.
The full list of Indians involved was published by The Indian Express newspaper. Former Miss World and actress Aishwarya Rai, her father-in-law Amitabh Bachchan, businessman KP Singh of the DLF group, Sameer Gehlaut of the Indiabulls group, and Vinod Adani of the Adani group all feature on the list. Other famous names include the Mumbai-based Garware family, Goa-based industrialist Anil Salgaocar and corporate lawyer Harish Salve.
The individuals find themselves in hot water because of the Foreign Exchange Management Act, which banned Indians from making direct overseas investments until 2013. The rules changed in 2013 but many of these companies had been running long before that date.
Further details continue to emerge
The papers reveal that Bollywood superstar Amitabh Bachchan is director of 4 shipping firms based in the British Virgin Islands and the Bahamas. According to the report “the authorized capital of these companies ranged between $5,000 and $50,000, but they traded in ships worth millions of dollars.” Bachchan has received India’s second-highest civilian award but was also implicated in the Bofors graft scandal.
Bachchan’s daughter-in-law Aishwarya Rai once won the Miss World beauty pageant, and regularly features on lists of the world’s most beautiful women. The leaks allege that Rai was a director at British Virgin Islands company Amic Partners Limited along with her father, mother and brother. The company was dissolved in 2008 and a spokesperson has called the accusations in the leak “totally untrue and false.”
K P Singh, the founder of India’s largest real estate developer DLF, has also been implicated in the ownership of three offshore entities that hold a total of nearly $10 million. According to the Panama Papers two other companies were reportedly set up by his son and daughter in 2012.
Huge number of Pakistanis also found to be involved
The secret files reveals shady dealings by the family of Pakistani Prime Minister Nawaz Sharif, as well as relatives of Punjab Chief Minister Shahbaz Sharif. Benazir Bhutto, Javed Pasha, Senator Rehman Malik and the family of Senator Osman Saifullah are also involved.
Zain Sukhera, co-accused with the son of former prime minister Yusuf Raza Gilani in the Hajj scandal, is also on the list. Alongside them are businessmen Sadruddin Hashwani and real estate tycoon Malik Riaz Hussain’s son. Textile moguls from the Abdullah family of Sapphire Textiles as well as Gul Muhammad Tabba of Lucky Textiles and Shahid Nazir of Masood Textiles are also involved.
Key figures in the judiciary also come up, including Justice Farrukh Irfan, a serving judge in the Lahore High Court. retired judge Malik Qayyum also appears in the papers. In total more than 200 Pakistanis are named in the documents.
Most conspicuous names include current and former politicians
Four companies are reportedly owned by family members of current prime minister Nawaz Sharif. The late Benazir Bhutto, involved in the oil-for-food bribery scandal has been confirmed as one of three shareholders in Petroline International Inc.
Relatives of Sharif are connected to at least 8 companies which were used to buy 6 properties in London in 2007-8. Three of these companies took out a 7 million pound loan with Deutsche Bank (Suisse) SA to buy 4 properties.
Journalists attempted to contact people on the list to get their version of the story. Only Sadruddin Hashwani, Ilyas Mehraj, Justice (r) Malik Qayyum and Aqeel Hussain replied, saying that owning and running an offshore company is not actually illegal.
The team behind the Panama Papers leak continues to pore over the data, which includes a huge amount of information. To process it will likely take months and involve the combined efforts of journalists around the world.
This first round of revelations looks likely to be only the tip of the iceberg, and should lead to greater scrutiny of the financial dealings of the world’s rich and famous. While operating an offshore company is not illegal, they are often used to dodge taxes, starving national governments of vital tax revenue. In countries such as India and Pakistan, this money could be used for infrastructure projects that would improve the lives of millions.