Wednesday Post

Friends , there is lot of news  items in the media regarding Pandora Papers in the recent times. As per media reports names of many Indians are appearing in the papers.

What is the Pandora Papers?

The Pandora Papers investigation is the world’s largest-ever journalistic collaboration, involving more than 600 journalists from 150 media outlets in 117 countries.

The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low- or no-tax jurisdictions. The entities enable owners to conceal their identities from the public and sometimes from regulators. Often, the providers help them open bank accounts in countries with light financial regulation.

The 2.94 terabytes of data,  leaked to International Consortium of Investigative Journalists (ICIJ) and shared with media partners around the world, arrived in various formats: as documents, images, emails, spreadsheets, and more.

The records include an unprecedented amount of information on so-called beneficial owners of entities registered in the British Virgin Islands, Seychelles, Hong Kong, Belize, Panama, South Dakota and other secrecy jurisdictions. They also contain information on the shareholders, directors and officers. In addition to the rich, the famous and the infamous, those exposed by the leak include people who don’t represent a public interest and who don’t appear in our reporting, such as small business owners, doctors and other, usually affluent, individuals  away from the public spotlight.

While some of the files date to the 1970s, most of those reviewed by ICIJ were created between 1996 and 2020. They cover a wide range of matters: the creation of shell companies, foundations and trusts; the use of such entities to purchase real estate, yachts, jets and life insurance; their use to make investments and to move money between bank accounts; estate planning and other inheritance issues; and the avoidance of  taxes through complex financial schemes. Some documents are tied to financial crimes, including money laundering.

What is in the Pandora Papers?

The more than 330 politicians exposed by the leak were from more than 90 countries and territories. They used entities in secrecy jurisdictions to buy real estate, hold money in trust, own other companies and other assets, sometimes anonymously.

The Pandora Papers investigation also reveals how banks and law firms work closely with offshore service providers to design complex corporate structures. The files show that providers don’t always know their customers, despite their legal obligation to take care not to do business with people who engage in questionable dealings.

The investigation also reports on how U.S. trust providers have taken advantage of some states’ laws that promote secrecy and help wealthy overseas clients hide wealth to avoid taxes in their home countries.

To identify potential story subjects in the data, ICIJ matched information in the leak against other data sets: sanctions lists, previous leaks, public corporate records, media lists of billionaires and public lists of political leaders.

ICIJ’s partner in Sweden, SVT, generated spreadsheets containing data extracted from passports found in the Pandora Papers.

ICIJ shared records with media partners using Datashare, a secure research and analytical tool developed by ICIJ’s technical team.  Datashare’s batch-search function helped reporters match some public figures with the data.

The leak contains routine documents that service providers gather for due diligence – news articles, Wikipedia entries, information from financial data provider World-Check – that don’t necessarily confirm whether a person is hiding wealth in a secrecy jurisdiction. ICIJ used machine learning to tag such files in Datashare, enabling reporters to exclude them from their searches.

Our 150 media partners shared tips, leads and other information of interest using ICIJ’s global I-Hub, a secure social media and messaging platform. Throughout the project, ICIJ held extensive training sessions for partners on the use of ICIJ technology to explore, mine and better understand the files.

The Indian govt has promised an investigation into the revelations in the Pandora Papers and assured appropriate action in such cases as per law will be taken. Stating that only ‘a few Indians’ have been named in the papers so far, in cases of Pandora Paper leaks appearing in the media,will be monitored through a multi- agency group. Anil Ambani, Vinod Adani, Jackie Shroff, Kiran Mazumdar- Shaw, Niira Radia, Sachin Tendulkar, Satish Sharma.

“The govt will also proactively engage with foreign jurisdictions for obtaining information in respect of relevant taxpayers and entities,” the Ministry said, adding that India is part of an Inter-Governmental Group that ensures ‘collaboration and experience sharing to effectively address tax risks associated with such leaks’

The multi- agency group headed by Central Board of Direct Taxes (CBDT) chairman, with representatives from the Enforcement Directorate, the Financial Intelligence Unit and the Reserve Bank of India, will keep a tab of phased disclosures from the Pandora Papers indicated by ICIJ website.

Many of the people whose names figure on the list have rejected financial misdoings. Biocon Chief Ms Mazumbar-Shaw has already given the statement that her husband’s offshore trust was bonafide and legitimate.

So only time will tell whether there is any truth in the allegations of Pandora Papers. Let us wait and watch for the further development.

Waiting, for your views on this blog.

Anil Malik

Mumbai, India

6^th October 2021