Pandora Papers – Radio Free Asia
Former Hong Kong rulers Tung Chee-hwa and Leung Chun-ying have been named among hundreds of officials from 91 jurisdictions around the world known to conceal assets in a global network of elite-led covert financial transactions global.
According to the Pandora Papers leak by the International Consortium of Investigative Journalists (ICIJ), Leung did not report his income from the sale of shares in a Japanese company while he was still managing director of the administrative region. Hong Kong Special of the People’s Republic of China. from 2012-2017.
Billionaire shipping tycoon Tung Chee-hwa, who held the post from 1997 to 2005, was found to have established offshore companies after he stepped down, according to newspapers.
The two are still part of the political system of the ruling Communist Party of China (CCP) to rule Hong Kong, which has seen a rapid and growing erosion of its promised freedoms amid a city-wide crackdown on dissent. and political opposition under a draconian security law imposed by Beijing.
The Pandora Papers investigation saw 600 journalists from 150 news agencies in 117 countries comb through nearly 12 million files from more than a dozen financial institutions.
They found written records linking global political and business leaders to billions of dollars in offshore wealth.
“The leaked documents reveal that many powerful players who could help end the offshore system are profiting instead – by hiding assets in secret societies and trusts while their governments do little to slow a flow. global illicit money that enriches criminals and impoverishes nations, ”the ICIJ said in an Oct. 4 report on the results.
While offshore accounts and companies are not illegal and may have legitimate purposes, they have often been linked to both legal tax evasion and illegal tax evasion, as well as money laundering and avoidance of international economic sanctions.
Leung did not report the 2015 sale of approximately HK $ 2.3 million (US $ 295,000) of shares of DTZ Japan Ltd, the ICIJ found in a joint investigation with News from the stand.
Leung owned 30 percent of the company’s shares through two offshore companies, News from the stand said, and continued to serve as director of three offshore companies for weeks after taking office, without declaring them as interest.
Leung hit back at the news site via social media for “misleading” information, saying, “Ownership and transactions of shares in subsidiaries do not need to be reported.”
“I activated all the resignation procedures before taking up my role as managing director,” Leung said.
In 2014, Leung faced allegations in the Sydney Morning Herald that he had received a multi-million dollar payment in connection with an offer for real estate company DTZ which he did not disclose.
The Hong Kong Department of Justice said there was insufficient evidence to support this claim in 2018, and investigations into this and two other conflict of interest and tax evasion allegations were dropped. .
Leung and Tung were also clients of Trident Trust, an international company that manages trusts and funds, according to News from the stand, who said they created offshore accounts and shell companies around the world to act as a tax haven for themselves and their families.
He said Tung and his family members have also opened around 70 offshore company accounts.
Hong Kong chief executive Carrie Lam declined to comment on individual cases when asked about the reports on Tuesday.
“The government has a very stable declaration of interest system,” Lam told reporters. But she said the government trusts its officials and never performs spot checks on public office holders.
Chung Kim-wah, deputy director general of the Hong Kong Public Opinion Research Institute (PORI), said the Hong Kong government’s lack of response to the Pandora Papers suggests that it will not pursue any of the ICIJ’s findings, but suggests also that he doesn’t throw his support behind Leung either.
“I think the lack of a response is in itself some kind of response,” Chung told RFA. “I don’t think there are a lot of people in the [Hong Kong] establishment that would like Leung to become general manager again. “
“I don’t think there is much of a chance that this will be the case given the current situation.”
Creation of offshore companies
The Pandora Papers also revealed that Joseph Tsai, executive vice chairman of the board of directors of Alibaba, had created more than 10 offshore companies for the disposal of assets before the company listing in the United States.
Tsai, a native of Taiwan but a Canadian citizen, helped Alibaba set up a complex offshore trading network using companies registered in the British Virgin Islands, Cayman Islands and Bahamas, according to the newspapers.
While the use of multiple offshore companies has often been associated with tax evasion and covert wealth management, there are legitimate uses for offshore companies and trusts as well.
“We do not intend to suggest or imply that any persons, companies or other entities included in the ICIJ’s offshore leakage database have broken the law or acted inappropriately,” he said. the ICIJ said in a disclaimer on the Pandora Papers website.
Meanwhile, Hong Kong media reported that family members of current and former CCP leaders hold approximately US $ 77 million in real estate in Hong Kong.
Information from the Hong Kong Land Registry has revealed that the owner of a detached and heavily secured mansion in the resort area of Repulse Bay is registered as Zhang Yannan, who holds a permanent Hong Kong ID card. The name matches that of the niece of CPC General Secretary Xi Jinping.
According to the Companies Register, a Zhang Yannan is also registered as the owner of a company called Jinyi, which is headquartered at Convention Plaza Apartments in downtown Hong Kong.
A source close to a wealthy Chinese businessman said many members of China’s financial and political elite prefer to own property and other assets in Hong Kong for fear of political upheaval in mainland China.
“The paradise of corruption”
Beijing-based political commentator Zha Jianguo said Hong Kong has become a “haven” for corrupt CCP officials to launder money and hide their wealth.
“First of all, the financial sector is very developed, with a lot of private ownership, and companies are run differently from mainland China,” Zha told RFA. “Second, there are still many ties to mainland China, so it’s always easy to find someone to help with money laundering or the purchase of property.”
A visiting scholar named Zhang, who studies Chinese economic activity in Hong Kong, said Chinese money continued to flow into Hong Kong, sometimes on its way to another location.
“More and more Chinese have bought real estate and transferred funds abroad in recent years … even some red capitalists and state-backed business groups,” Zhang said. “One of the reasons is the transfer of assets.”
Zhang said assets transferred overseas are often the result of illicit gain in China, but also a growing sense of insecurity among the Chinese elite.
“Everyone, the red capitalists, the princes of revolutionary families and ordinary people, transfer assets abroad,” he said.
“There is no certainty, neither on the political situation nor on the basic ability to earn a living, and this applies to both ordinary citizens and senior officials.”
Translated and edited by Luisetta Mudie.