Exclusive:
Offshore financial industry leak exposes identities of 1,000s of holders of
anonymous wealth from around the world
The Guardian, David Leigh, Wednesday 3 April 2013
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| The British Virgin Islands, the world's leading offshore haven used by an array of government officials and rich families to hide their wealth. Photograph: Duncan Mcnicol/Getty Images |
Millions of
internal records have leaked from Britain's offshore financial industry,
exposing for the first time the identities of thousands of holders of anonymous
wealth from around the world, from presidents to plutocrats, the daughter of a
notorious dictator and a British millionaire accused of concealing assets from
his ex-wife.
The leak of
2m emails and other documents, mainly from the offshore haven of the British Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to
the booming offshore trade, with a former chief economist at McKinsey
estimating that wealthy individuals may have as much as $32tn (£21tn) stashed
in overseas havens.
In France,
Jean-Jacques Augier, President François Hollande's campaign co-treasurer and
close friend, has been forced to publicly identify his Chinese business
partner. It emerges as Hollande is mired in financial scandal because his
former budget minister concealed a Swiss bank account for 20 years and
repeatedly lied about it.
In
Mongolia, the country's former finance minister and deputy speaker of its
parliament says he may have to resign from politics as a result of this
investigation.
But the two
can now be named for the first time because of their use of companies in
offshore havens, particularly in the British Virgin Islands, where owners'
identities normally remain secret.
The names
have been unearthed in a novel project by the Washington-based International Consortium of Investigative Journalists [ICIJ], in collaboration with the
Guardian and other international media, who are jointly publishing their
research results this week.
The naming
project may be extremely damaging for confidence among the world's wealthiest
people, no longer certain that the size of their fortunes remains hidden from
governments and from their neighbours.
BVI's
clients include Scot Young, a millionaire associate of deceased oligarch Boris
Berezovsky. Dundee-born Young is in jail for contempt of court for concealing
assets from his ex-wife.
Young's
lawyer, to whom he signed over power of attorney, appears to control interests
in a BVI company that owns a potentially lucrative Moscow development with a
value estimated at $100m.
Another is
jailed fraudster Achilleas Kallakis. He used fake BVI companies to obtain a
record-breaking £750m in property loans from reckless British and Irish banks.
As well as
Britons hiding wealth offshore, an extraordinary array of government officials
and rich families across the world are identified, from Canada, the US, India,
Pakistan, Indonesia, Iran, China, Thailand and former communist states.
The data
seen by the Guardian shows that their secret companies are based mainly in the
British Virgin Islands.
Sample
offshore owners named in the leaked files include:
•
Jean-Jacques Augier, François Hollande's 2012 election campaign co-treasurer,
launched a Caymans-based distributor in China with a 25% partner in a BVI
company. Augier says his partner was Xi Shu, a Chinese businessman.
•
Mongolia's former finance minister. Bayartsogt Sangajav set up "Legend
Plus Capital Ltd" with a Swiss bank account, while he served as finance
minister of the impoverished state from 2008 to 2012. He says it was "a
mistake" not to declare it, and says "I probably should consider resigning
from my position".
• The
president of Azerbaijan and his family. A local construction magnate, Hassan
Gozal, controls entities set up in the names of President Ilham Aliyev's two
daughters.
• The wife
of Russia's deputy prime minister. Olga Shuvalova's husband, businessman and
politician Igor Shuvalov, has denied allegations of wrongdoing about her
offshore interests.
•A
senator's husband in Canada. Lawyer Tony Merchant deposited more than
US$800,000 into an offshore trust.
He paid
fees in cash and ordered written communication to be "kept to a
minimum".
• A
dictator's child in the Philippines: Maria Imelda Marcos Manotoc, a provincial
governor, is the eldest daughter of former President Ferdinand Marcos,
notorious for corruption.
• Spain's
wealthiest art collector, Baroness Carmen Thyssen-Bornemisza, a former beauty
queen and widow of a Thyssen steel billionaire, who uses offshore entities to
buy pictures.
• US:
Offshore clients include Denise Rich, ex-wife of notorious oil trader Marc
Rich, who was controversially pardoned by President Clinton on tax evasion
charges. She put $144m into the Dry Trust, set up in the Cook Islands.
It is
estimated that more than $20tn acquired by wealthy individuals could lie in
offshore accounts. The UK-controlled BVI has been the most successful among the
mushrooming secrecy havens that cater for them.
The
Caribbean micro-state has incorporated more than a million such offshore entities since it began marketing itself worldwide in the 1980s. Owners' true
identities are never revealed.
Even the
island's official financial regulators normally have no idea who is behind
them.
The British
Foreign Office depends on the BVI's company licensing revenue to subsidise this
residual outpost of empire, while lawyers and accountants in the City of London
benefit from a lucrative trade as intermediaries.
They claim
the tax-free offshore companies provide legitimate privacy. Neil Smith, the
financial secretary of the autonomous local administration in the BVI's capital
Tortola, told the Guardian it was very inaccurate to claim the island
"harbours the ethically challenged".
He said:
"Our legislation provides a more hostile environment for illegality than
most jurisdictions".
Smith added
that in "rare instances …where the BVI was implicated in illegal activity
by association or otherwise, we responded swiftly and decisively".
The
Guardian and ICIJ's Offshore Secrets series last year exposed how UK property
empires have been built up by, among others, Russian oligarchs, fraudsters and
tax avoiders, using BVI companies behind a screen of sham directors.
Such
so-called "nominees", Britons giving far-flung addresses on Nevis in
the Caribbean, Dubai or the Seychelles, are simply renting out their names for
the real owners to hide behind.
The
whistleblowing group WikiLeaks caused a storm of controversy in 2010 when it
was able to download almost two gigabytes of leaked US military and diplomatic
files.
The new BVI
data, by contrast, contains more than 200 gigabytes, covering more than a
decade of financial information about the global transactions of BVI private
incorporation agencies. It also includes data on their offshoots in Singapore,
Hong Kong and the Cook Islands in the Pacific.
Related Articles:
The nation at the heart of the offshore scandal: Britain
More than 175,000 UK companies have offshore directors
Profiles of leading secret account holders
The extraordinary range of people using offshore hideaways
Offshore secrets: unravelling a complex package of data
Offshore secrets: how many UK companies are run from overseas havens?
Related Articles:
The nation at the heart of the offshore scandal: Britain
More than 175,000 UK companies have offshore directors
Profiles of leading secret account holders
The extraordinary range of people using offshore hideaways
Offshore secrets: unravelling a complex package of data
Offshore secrets: how many UK companies are run from overseas havens?
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| Offshore Secrets |
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