With nearly 600 journalists from 150 media sites in 117 countries, the Pandora Papers investigation is the world’s largest-ever journalistic collaboration. The investigation is based on the release of confidential documents from 14 offshore service providers who help affluent individuals and organizations construct shell companies, trusts, foundations, and other entities in low- or no-tax jurisdictions.
More than 330 lawmakers from more than 90 countries and territories are exposed due to the hack. They bought real estate, held money in trust, and owned other businesses and assets through anonymous entities domiciled in secrecy jurisdictions.
They also include details about the shareholders, directors, and officers. In addition to the rich, famous, and renowned, those who do not represent the public interest and who do not feature in our reporting, such as small company owners, physicians, and other, typically affluent, folks away from the public limelight, are among those revealed by the leak.
While some of the data go back to the 1970s, most of the files examined by ICIJ were created between 1996 and 2020. They cover a wide range of topics, including the formation of shell companies, foundations, and trusts; the use of such entities to buy real estate, yachts, jets, and life insurance; the use of such entities to make investments and move money between bank accounts; estate planning and other inheritance issues; and tax avoidance through complex financial schemes. Some documents have been linked to money laundering and other financial crimes.
What’s in the Pandora Papers?
The breach exposes more than 330 lawmakers from more than 90 nations and territories. They acquired real estate, kept money in trust, and owned other businesses and assets through anonymous entities headquartered in secrecy jurisdictions.
The Pandora Papers expose how banks and legal firms collaborate with offshore service providers to create complicated business structures. Despite their legal requirement to avoid doing business with those who engage in questionable operations, the files demonstrate that providers don’t always know their customers.
The study also looks into how US trust companies have used secrecy laws in some states to assist affluent foreign clients in hiding their assets and avoiding paying taxes in their home countries.
Who Leaked the Pandora Papers?
The records were generally unorganized and numbered in the millions. The documents included passports, bank statements, tax declarations, corporate incorporation documentation, real estate contracts, and due diligence questionnaires.
According to the International Consortium of Investigative Journalists, the data leak includes over 4.1 million photos and emails ( ICICJ). The International Consortium of Investigative Journalists (ICIJ) has conducted the largest-ever investigation into the offshore world, revealing the financial secrets of politicians and millionaires.
Why is it called the Pandora Papers?
The revelations have been termed the “Pandora Papers” because they reveal previously concealed dealings of the elite and corrupt, including how they have utilized offshore accounts to hide assets worth trillions of dollars. According to the study, many of the funds were set up to cheat taxes and hide assets for other nefarious purposes.
Jordan’s King Abdullah II, former British Prime Minister Tony Blair, Czech Prime Minister Andrej Babis, Kenyan President Uhuru Kenyatta, Ecuador’s President Guillermo Lasso, and allies of both Pakistani Prime Minister Imran Khan are among the beneficiaries of the hidden accounts.
The Pandora Papers investigation offers a unique perspective on how money and power operate in the twenty-first century (a period marked by increasing authoritarianism and inequality).
It also shows how the rule of law has been bent and broken worldwide by a system of financial secrecy facilitated by the United States and other wealthy nations.
The findings of the International Consortium of Investigative Journalists (ICIJ) and its media partners reveal how deeply secretive finance has infiltrated global politics — and provide insight into why governments and international organizations have made little progress in ending offshore financial abuses.
What format did the information come in the Pandora Papers?
The records were mainly disorganized and numbered in the millions. Over half of the files (6.4 million) were text documents, with over 4 million PDFs, some of which were over 10,000 pages long. The documents included passports, bank records, tax declarations, company incorporation documentation, real estate contracts, and due diligence questionnaires. Over 4.1 million photos and emails were also exposed in the data leak.
Spreadsheets accounted for 4% of the documents, or over 467,000. Slide shows, as well as audio and video files, were included in the records.
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Which Are the Biggest Public Figures Appeared In the Pandora Papers?
More than 330 politicians and public officials (90 of whom are European), 15 current and former heads of state from Latin America, 46 Russian oligarchs, and 133 multi-millionaires from Forbes magazine’s rich list are among those whose secret assets, covert deals, and hidden fortunes are revealed in the investigation.
On the international stage, notable figures include Chilean President Sebastián Piera, who concealed stakes in the mining business, and Dominique Strauss-Kahn, the former managing director of the International Monetary Fund, who evaded taxes while working as a consultant.
The king of Jordan, Abdullah II, is also there, along with his 30 companies, three Malibu mansions, and the Czech prime minister, Andrej Babis. They purchased a chateau with a cinema and two swimming pools through an offshore network.
Tony Blair, the former British Prime Minister, and his wife Cherie also make an appearance. They paid $8.8 million (€7.6 million) for a Victorian building in London. There are also criminals like Raffaele Amato, the Italian Camorra mafia lord who inspired the film Gomorra and was apprehended in Málaga, Spain, in 2009.
Claudia Schiffer, Julio Iglesias, and Shakira are among the fashion and entertainment industry’s biggest names. Carlo Ancelotti, who Spanish tax officials are already probing, and former Barcelona FC manager Pep Guardiola for an account he kept in the principality of Andorra, are among the well-known personalities from the sporting world. More important people will be revealed in the coming weeks.
The Pandora Papers feature a global cast of characters, including a Bitcoin czar imprisoned for money laundering in conjunction with the world’s largest cyberheist. A king’s lover, feuding princesses, Bollywood celebs, soccer players, dishonest sports officials, supermodels, celebrated designers, and world-famous singers have all been tied to offshore assets.
Biggest Reveals by The Pandora Papers
Jordan king’s real estate empire
According to the ICIJ, Jordan’s monarch, King Abdullah II, used an English accountant in Switzerland and lawyers in the British Virgin Islands to buy 14 luxury homes worth $106 million in secret, including a $23 million property overlooking a beach California. Jordan relies on foreign aid to support its people and house millions of refugees. According to the ICIJ, Jordanian law does not require the king to pay taxes. He has never misappropriated public funds. He has security and privacy grounds to keep property through offshore businesses.
French Riviera Estate
According to the ICIJ, Czech Prime Minister Andrej Babis moved $22 million through offshore firms to acquire a magnificent home on the French Riviera in 2009 while keeping his ownership hidden. According to the organization, the five-bedroom Chateau Bigaud, owned by a subsidiary of one of Babis’ Czech enterprises, sits on 9.4 acres (3.8 hectares) in a hilltop village where Pablo Picasso spent his final years.
List of Indian Celebrities in the Pandora Papers
The following is a list of Indians mentioned in the Pandora papers:
The identities of affluent persons linked to the Pandora Papers, an inquiry into financial secrets maintained by high-profile individuals worldwide, including Sachin Tendulkar, Anil Ambani, and Kiran Mazumdar Shaw.
The chairman of Reliance ADA Group and his representatives own at least 18 offshore corporations in Jersey, the British Virgin Islands (BVI), and Cyprus, according to the ICIJ’s Pandora Papers investigation. In February 2020, Ambani filed for bankruptcy in a UK court, declaring his net worth zero, following a dispute with three Chinese state-controlled banks.
According to the ICIJ’s recent investigation, the famous cricketer and Master Blaster Sachin Tendulkar are celebrities implicated in the ‘Pandora Papers’ leak. According to the article, Tendulkar and his family members were registered as Beneficial Owners of an offshore business in the British Virgin Islands (BVI) that was liquidated in 2016.
Nirav Modi’s Sister
Before Nirav Modi departed from India in January 2018, his sister Purvi Modi is said to have set up a firm in the British Virgin Islands to act as a corporate protector for a trust set up through the Trident Trust Company Singapore. Brookton Management Ltd was formed in December 2017 to serve as The Deposit Trust’s corporate protector, according to the inquiry findings.
A trust was formed with keys to a person barred by Sebi for insider trading by John McCallum Marshall Shaw, a British citizen and the spouse of Biocon promoter Kiran Mazumder Shaw. In July 2021, SEBI banned Kunal Ashok Kashyap for a year involving alleged insider trading in Biocon shares. John McCallum Marshall Shaw controls 99 per cent of Glentec, which holds shares in Biocon Ltd, according to the Indian Express.
The Pandora papers also showed that Jackie Shroff, a well-known Bollywood actor, was the primary beneficiary of a trust set up by his mother-in-law in New Zealand. According to documents, he also sent “substantial payments” to this trust, the owner of an offshore business established in the British Virgin Islands and had a Swiss bank account.
While serving as Minister of Petroleum and Natural Gas in 1995, Satish Sharma, a Gandhi family friend and prominent Congress politician, formed a trust. He also started another faith when he was a Rajyasabha member in 2015. Sharma was the guardian of Sharma’s wife, a beneficiary of both the Jan Zegers and JZ II trusts. According to Sharma’s wife, Sterre Sharma, the convictions were set up to “manage his assets and pass on his inheritance” to the specified beneficiaries.
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What is a tax haven?
A tax haven is where forming trade firms is one of the primary economic activities, if not the only one.
They provide significant fiscal benefits to citizens of other countries seeking to reduce their tax burdens (taxes associated with these entities’ activities are either zero or a symbolic rate). Still, they also protect their anonymity, with legal frameworks that make it challenging to identify the actual beneficiaries of a particular company.
The lack of willingness to exchange information with authorities from other nations has been significant in identifying areas that might be deemed tax havens in recent years.
Despite this, there is no global or official list of such jurisdictions, and each government must select for itself with whom it will negotiate tax treaties or share information.
The Organisation for Economic Co-operation and Development (OECD) has been able to remove 30 or so countries from its list of countries that do not cooperate on tax concerns due to these agreements.
Who is eligible to form a corporation in a tax haven?
A whole business has developed to manage the steps required for anyone from anywhere in the world to form a company secretly. The client can remain anonymous in official documents such as incorporation papers and shareholder lists, thanks to the employment of these firms. Some of the world’s largest offshore service providers, such as Alemán, Cordero, Galindo y Lee, Trident Trust, and Asiaciti, are among the companies whose documents are included in the Pandora Papers.
Someone who has never travelled outside of Spain may use their services to create a company in Hong Kong or the Cayman Islands without leaving their sofa. To manage a more complicated corporation or construct a more complex structure, one must always consult with a law firm or a tax adviser in one’s own country.
What are an Offshore Company and its uses?
Offshore corporations are established in a country other than the one where their beneficiaries live. They provide a specific function in the global economy.
They are necessary a lot of the time for the significant flow of capital, says Francisco Bonatti, an attorney and money laundering consultant. That component of the offshore economy is not only legal, but they are also genuinely needed in an economy like the current one, which is delocalized and globalized.
The issue with these corporations arises when they are formed in opaque jurisdictions, searching for little or no taxation and anonymity. These businesses do not conduct legitimate business in the countries where they are registered; they do not require a physical location or personnel.
They are used to disguise and avoid any fiscal or legal duties for the valid owner of assets, including financial support and real estate, art pieces, and automobiles, among other things. According to a report published in 2017, offshore enterprises account for 10% of global GDP.
Is it legal to have a company in a tax haven?
Having a business in a tax haven is allowed as long as the assets and revenue generated by the firm are reported to the authorities in the country where the beneficiary typically resides.
It is common for major global corporations to organize their international presence by establishing subsidiaries in several countries to reduce their tax obligations.
To summarise, a habitually resident in Spain can establish a corporation in an offshore jurisdiction as long as the Spanish Tax Agency is informed of their existence and gets the necessary taxes.
If it’s legal, then why are the pandora papers relevant?
The issues arise when these firms and their income are purposefully hidden in these jurisdictions without their existence being notified to the authorities in the jurisdiction where the genuine owner is a tax resident. Many of the cases in the Pandora Papers fit this description. Flows of illicit monies are buried beneath that layer of opacity, opening the possibility to bribery, money laundering, tax evasion, and terrorism financing.
What are the Panama papers?
A new document leak from Panamanian law firm Mossack Fonseca shows new offshore ties of an assortment of global elites, two years after the Panama Papers blew the roof off how the affluent and influential park and transfer their money in and out of hidden tax-havens.
What did the Panama Papers reveal?
Individuals who have used a Panama legal firm to set up offshore entities. Some Indians floated offshore entities when laws prohibited them; others have taken the technically convenient position that companies acquired are not the same as companies incorporated. Still, others have bundled their annual remittance quotas to subscribe to shares in an offshore entity acquired at a previous date.
Others have obtained foreign-earned money and put it in the entity to avoid paying taxes. Some have created a bank account to store payoffs from government contracts, while others have set up trusts or foundations to hold “proceeds of crime” or property purchased with money obtained illegally.
For example, the Spanish list is dated from 1991. It started with 48 states and has only had removals since then: there are currently 33. The list of non-cooperative jurisdictions will be rewritten and updated annually under a new law against tax fraud passed by the Spanish government this year.
The European Commission produced its list of 30 nations it considered tax havens in 2015. As a result of some of these countries’ “commitments” to collaborate with other jurisdictions, the list of non-cooperating countries was reduced to 12: Anguilla, Dominica, Fiji, Guam, Palau, Panama, Samoa, and Trinidad and Tobago
Difference Between Panama and Pandora Papers
The International Consortium of Investigative Journalists was in charge of the Pandora Papers and the Panama Papers (ICIJ). Even though the latter was published five years ago, they share numerous similarities.
Both leaks have papers related to them that come from offshore suppliers. The Panama Papers, in reality, came from the law firm Mossack Fonseca, which was based in that Central American country.
The Pandora Papers contain about 400,000 additional files and 2.94 terabytes of data, somewhat more than its predecessor’s 2.6 terabytes.
The level of detail revealed by the recent leak about the ties between those seeking financial gain through the formation of corporations in tax havens and the vast variety of specialists who assist them is unparalleled.
It is a total of 14 firms, not just one. And the more firms there are, the more clients there are: the Pandora Papers contain information on almost 29,000 business owners, which is more than double what was available five years ago.
The Pandora papers reveal the secrets of more than 120,000 offshore companies and trusts created by Mossack Fonseca, a Panamanian law firm specializing in selling financial secrecy. For almost 40 years, the firm has created shell companies that can conceal ownership of assets. These shell firms are often used to commit fraud, avoid taxes or launder money.
We will update and publish the second part of this article with new updates soon.
Disclaimer: All information in the article is gathered from public platforms and reputed news portals