FROM ICIJ'S PARTNERS

Paradise Papers Lifts The Veil On The Role Of Offshore Finance In Asia

On May 5, 2017, while a stream of mopeds and roaring cars were jamming the streets of Jakarta, a group of reporters coming from various corners of Asia gathered at the headquarters of Tempo, a historic magazine and ICIJ partner in Indonesia.

Sifting through the nearly 14 million files that later became known as the Paradise Papers, the reporters exchanged notes and story ideas on the names they had found in the data: cronies of late Indonesian dictator Suharto, the scions of an Indian diamond trading company, and a Malaysian businessman involved in what’s been described as Asia’s biggest corruption scandal.

The meeting in the Tempo newsroom – a bright open space decorated with graffiti featuring Indonesian feminist icon Raden Adjeng Kartini – was a starting point for many of the investigations that have been making the headlines after the November 5 launch of the パラダイス文書, 天堂文件, 조세도피처의, the Paradise Papers.

The reports by ICIJ’s media partners in Asia have once again lifted the veil on the use of offshore finance by influential corporations and powerful business executives that drive the region’s economy and geopolitics.

Files from the Malta registry have shed light on the long arm of the North Korean regime. A North Korean woman who runs the Pyongyang Optical Store – a business which was praised by late Kim Jong-Il for “sincerely taking care of” North Korean soldiers – was the director of a Malta-based joint venture with a local construction firm. It is “highly likely” that its purpose was to circumvent sanctions, said experts interviewed by Newstapa, a Seoul-based investigative news organization.

South Korea’s state-owned gas company secretly set up a Bermuda entity to buy shares in Hyundai Corp. and help it finance a gas production project in Yemen, allegedly avoiding double taxation, according to Newstapa. The news site also exposed the offshore deals of the members of the Cho family, who run one of the country’s largest industrial conglomerates, some of whom were recently convicted of tax evasion and fraud.

The leaked documents showed that medical doctors from Japan and six other countries received stock options in a Singapore-based medical company, raising questions of unethical behavior and conflicts of interest, according to Asahi Shimbun. The creator of “Dragon Ball,” Japanese manga artist Akira Toriyama, was also named in the Paradise Papers as an investor in a (now closed) American real estate company that was later found in violation of federal accounting practices.

Billionaires, tycoons…

Malaysian billionaire Taek Jho Low, who is suspected of having contributed to embezzling billions of dollars from the country’s sovereign fund, contacted Appleby – one of the law firms at the center of the Paradise Papers leak – to inquire about extradition issues, Malasyakini reported. It is not clear if Low became a client of Appleby. He remains a fugitive, while international investigations continue.

Chinese billionaire Jack Ma, the founder of e-commerce giant Alibaba, and Che Fung, the son-in-law of China’s former central banker, had financial stakes in a subsidiary of Charoen Pokphand Group, Thailand’s agribusiness conglomerate, according to a HK01 investigation. The Chinese entrepreneur’s investment in CP had not been previously reported, the news site said. The Thai company and its offshore subsidiaries are clients of Bermuda-based law firm Appleby, Isranews reported.

The leaked documents also exposed allegedly secretive transactions between Hong Kong tycoon Huang Youlong – the husband of billionaire actress Zhao Wei – and a subsidiary of Malaysian casino-and-cruise company Genting. According to HK01, the deals included allegedly-undeclared multimillion dollar loans used to finance Huang’s operations in Mongolia. Huang and his wife have been recently banned from China’s securities markets for five years due to apparently unrelated disclosure violations.

And political leaders

Indonesian names in the files included prominent political figures such as the opposition leader and 2014 presidential candidate Subianto Prabowo and two children of former president Suharto, once described by Transparency International as one of the most corrupt leaders of the past century. In the aftermath of the revelations the Indonesian government announced a probe on Prabowo and the Suhartoes.

Pakistan’s former prime minister Shaukat Aziz created a trust for his family before entering politics after a career in banking, the files revealed. His lawyer said Aziz and relatives paid all the taxes they owed in the United States where the trust was registered. Pakistani news outlet The News also reported that Karim Aga Khan – a British national and the spiritual leader of 15 million Shia Imami Ismaili Muslims – owned an offshore company in the Isle of Man used for “yacht vessel ownership.”

More than 700 Indian companies and individuals appeared in the files. Among them are Bollywood stars, politicians and business executives, including Sidharth Shamnath. Shamnath set up offshore entities with Turkish building contractor and engineer Burak Baslilar to invest in India’s energy sector, according to the Indian Express. Appleby records identified Baslilar as having “amassed his wealth in Libya and was said to be close to the late Libyan leader Muammar Gaddafi,” the report said.

In response to the Indian Express, Shamnath denied his business partner’s association with Gaddafi. Two Indian government agencies announced they will probe those included in the Paradise Papers to check for irregularities or violations.

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