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 The "Panama Papers" have cast light on the financial arrangements of
high profile politicians and public figures and the companies and
financial institutions they use for such activities. Among those
named in the documents are friends of Russian President Vladimir
Putin and relatives of the leaders of China, Britain, Iceland and
Pakistan, and the president of Ukraine.
Leading figures and financial institutions responded to the massive
leak of more than 11.5 million documents with denials of any
wrongdoing as prosecutors and regulators began a review of the
reports from the investigation by the U.S.-based International
Consortium of Investigative Journalists (ICIJ) and other media
organizations.
Following the reports, China has moved to limit local access to
coverage of the matter with state media denouncing Western reporting
on the leak as biased against non-Western leaders.
France, Australia, New Zealand, Austria, Sweden and the Netherlands
are among nations that have commenced investigations, and some other
countries, including the United States, said they were looking into
the matter.
Mossack Fonseca, the Panamanian law firm at the center of the leaks,
has set up more than 240,000 offshore companies for clients around
the globe and denies any wrongdoing. It calls itself the victim of a
campaign against privacy and claims media reports misrepresent the
nature of its business.
In a printed statement given to Reuters by a staff member at Mossack
Fonseca's Hong Kong office on Tuesday, the firm said it has never
been charged with or formally investigated for criminal wrongdoing
in its nearly 40 years of operation.
"We do not advise clients on how to operate their businesses. We
don't link ourselves in any way to companies we help incorporate,"
the firm said in the statement.
"Excluding the professional fees we earn, we don't take possession
of clients' money, or otherwise have anything to do with any of the
direct financial aspects related to operating these businesses."
Mossack Fonseca also said it supports international initiatives
requiring greater transparency of newly incorporated companies and
trusts and has implemented such measures as part of its own due
diligence.
The staff at the office declined to answer questions.
The Hong Kong government said in a statement that its Inland Revenue
Department has taken note of the recent release of the documents and
will take "necessary actions" based on any information it gets. It
will not comment on individual cases or disclose the course of
action because of secrecy provisions in Hong Kong tax law, the
government said.
DENIALS AND BACKLASH
Credit Suisse and HSBC, two of the world's largest wealth managers,
on Tuesday dismissed suggestions they were actively using offshore
structures to help clients cheat on their taxes.
Both were named among the banks that helped set up complex
structures that make it hard for tax collectors and investigators to
track the flow of money from one place to another, according to
ICIJ.
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Credit Suisse CEO Tidjane Thiam, who is aggressively targeting
Asia's wealthiest for growth, said his bank was only after lawful
assets.
Speaking at a media briefing in Hong Kong, he acknowledged the bank
uses offshore financial structures, but only for very wealthy
customers with assets in multiple jurisdictions and did not support
their use for tax avoidance or allow them without knowing the
identities of all those concerned.
"We do not condone structures for tax avoidance," he said. "Whenever
there is a structure with a third party beneficiary we insist to
know the identity of that beneficiary."
Separately, HSBC said the documents pre-dated a thorough reform of
its business model.
Both banks have in recent years paid large fines to U.S. authorities
over their wealth management or banking operations.
Credit Suisse agreed in 2014 to pay a $2.5 billion fine for helping
rich Americans evade taxes. HSBC agreed in 2012 to pay $1.92 billion
in fines, mainly for allowing itself to be used to launder Mexican
drug money.
The reports on leaks also pointed to the offshore companies linked
to the families of Chinese President Xi Jinping and other powerful
current and former Chinese leaders.
Chinese Foreign Ministry spokesman Hong Lei, when asked if the
government would investigate tax affairs of those mentioned in the
Panama Papers, told reporters at a daily news briefing the ministry
would not comment on "these groundless accusations".
Searches for the word "Panama" on Chinese search engines bring up
stories in Chinese media on the topic, but many of the links have
been disabled or only open onto stories about allegations directed
at sports stars.
China's Internet regulator did not immediately respond to a request
for comment.
The Global Times, an influential tabloid published by the ruling
Communist Party's official People's Daily, suggested in an editorial
on Tuesday that Western media backed by Washington used such leaks
to attack political targets in non-Western countries while
minimizing coverage of Western leaders.
(Additional reporting by Denny Thomas, Saeed Azhar and Clare
Baldwin; Writing by Sam Holmes; Editing by Martin Howell)
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