The ‘biggest ever’ leak of offshore data has exposed the secret finances of some of the global elite, including numerous world leaders.
The UK Government is facing fresh calls to tighten Britain’s defences against ‘dirty money’ after the cache of almost 12 million files exposed secret property deals in the country.
Dubbed the ‘Pandora papers’, the leak is said to cover the activities of some 35 current or former world leaders, more than 300 public officials and 100 billionaires, according to BBC Panorama, which conducted a joint investigation with the Guardian.
Among them are former prime minister Tony Blair and his wife, Cherie, who angrily denied any wrongdoing after the Guardian and Panorama said they were able to save more than £300,000 in stamp duty when they acquired a £6.45 million London property, by buying the offshore company which owned it.
And a major donor to the Conservative Party who helped fund Boris Johnson’s leadership campaign is alleged to have advised on a deal which was later found to be a £162 million bribe to the leader of Uzbekistan’s daughter.
Mohamed Amersi’s lawyers denied any suggestion that he ‘knowingly’ facilitated corrupt payments and said the underlying arrangements for the deal had been put in place two years before.
Among the other disclosures in the papers are details of how the rich and powerful have been legally setting up companies to secretly buy property in the UK.
The leak also links Russian President Vladimir Putin to secret assets in Monaco, and suggests the Czech Prime Minister Andrej Babis failed to declare an offshore investment company used to purchase two French villas for £12 million.
Key members of Imran Khan’s administration in Pakistan are also named in the files, as are the Ecuadorian President Guillermo Lasso, who replaced a Panamanian foundation that made monthly payments to his close family members with a trust based in South Dakota in the US.
The King of Jordan amassed £70 million of US and UK property while foreign aid poured into his country.
Lawyers for King Abdullah have said that he used his personal wealth to buy the properties and there was nothing improper about him using offshore firms to do so.
Further revelations are also expected from the papers.
Following day one of the release, the Crown Estate said that it was looking into the £67 million purchase of a London property from a company which, the Guardian said, acted as a ‘front’ for family of Azerbaijan’s President Ilham Aliyev whose record has long been criticised by anti-corruption campaigners.
A Crown Estate spokesman said: ‘Before our purchase of 56-60 Conduit Street, we conducted checks including those required by UK law.
‘At the time we did not establish any reason why the transaction should not proceed. Given the potential concerns raised, we are looking into the matter.’
The disclosures are reportedly based on files from 14 financial services companies in countries including the British Virgin Islands, Panama, Belize, Cyprus, the United Arab Emirates, Singapore and Switzerland.
Those papers were passed to the International Consortium of Investigative Journalists in Washington, which then shared access to the data with a number of media organisations including the Guardian and Panorama.
The reports stress that many of the transactions involve no legal wrongdoing.
But the Guardian said they highlighted the central, co-ordinating role London plays in the activities, with the city home to wealth managers, law firms, company formation agents and accountants serving their ‘ultra-rich’ clients
Similar leaks have been revealed before – notably the Paradise and Panama Papers – but experts are suggesting the Pandora Papers could be a more influential leak.
Duncan Hames, policy director at the campaign group Transparency International UK, said the disclosures should act as a ‘wake up call’ for the Government to deliver on long-overdue measures to strengthen Britain’s defences against ‘dirty money’.
‘These leaks show that there is one system for corrupt elites who can buy access to prime property and enjoy luxury lifestyles and another for honest hard-working people,’ he said.
‘The UK must redouble its efforts in tackling illicit finance, bringing in long overdue transparency reforms to reveal who really owns property here as well as resourcing regulators and law enforcement to clamp down on rogue professionals and corrupt cash held in the UK.’
Regarding the Blairs’ London property deal, a spokeswoman for the couple said they had bought the property in ‘a normal way through reputable agents’ and should not have been ‘dragged into a story about “hidden” secrets of prime ministers etc’.
She said: ‘The vendor sold the company not the property – again a decision the Blairs had nothing to with.
‘Since the purchase was of a company no buyer would have had to pay UK stamp duty on that transaction.
However, because the Blairs then repatriated the company and brought it onshore, they are liable for capital gains and other taxes on the resale of the property which will significantly exceed any stamp duty.
‘For the record, the Blairs pay full tax on all their earnings. And have never used offshore schemes either to hide transactions or avoid tax.’
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