The Panama Papers: Invested, but not Koppied

You needn’t be there yourself, but should your money? Those places are beginning to look like those parties you simply have to get an invitation to, if you want to matter: the “havens” where (many of) the rich and beautiful put their money. The Virgin Islands, for example. Or Panama. Or Luxemburg? Not sure. Ask a bank.

Reportedly, some members of Vladimir Putin‘s tight-knit inner circle do it. Reportedly, Hong Kong movie star Jackie Chan (成龍) does it. So do Thais. Lots of Indians, too. And maybe many Americans, but elsewhere.

Others, also reportedly, did so in the past. One of them even says that he lost money in the game.

But not so fast. Media tend to scandalize everything, don’t they?

According to ICIJ, the documents make public the offshore accounts of 140 politicians and public officials. The documents don’t necessarily detail anything illegal, but they do shine a light on the shadowy world of offshore finances,

National Public Radio (NPR) informs its listeners.

So, let’s not jump to conclusions. The problem, either way, is that the investors’ countries’ governments can’t get a picture of what is there. And once an investor is found on a list like the “Panama Papers”, with investments or activities formerly unknown to his country’s fiscal authorities (and/or the public), he’s got something to explain.

Like Argentine president Mauricio Macri, for example.

So, it’s beautiful to have some money there.

Unless the public begins to continuously ask questions about it.

Timely Exits from Paradise

If British prime minister David Cameron is right, the money he and his wife earned from an offshore trust were taxed. His problem, then, would be the general suspicon of the business.

The Cameron couple reportedly sold their shares in question in 2010, the year he became prime minister.

“Best Effect” and “Wealth Ming” reportedly ceased operations in 2012 and/or 2013. That was when CCP secretary general and state chairman Xi Jinping took his top positions. The two companies had been run in the Virgin Islands, and Deng Jiagui (邓家贵), husband to Xi’s older sister, had been the owner, Singaporean paper Zaobao reported on Tuesday.

And then, there’s Tsai Ying-yang (蔡瀛陽), one of the 16,785 Taiwanese Mossack Fonseca customers, the law firm the “Panama Papers” were leaked from. According to his lawyer, Lien Yuen-lung (連元龍), Tsay Ying-yang terminated his Koppie Limited company as soon as in 2009, the year following its establishment, so as to cut the losses – 30 percent of the investment, according to a phone interview Lien gave Reuters, as quoted by the Straits Times.

Tsai Ing-wen hasn’t commented herself, and maybe, she won’t any time soon. It doesn’t seem that too much pressure has mounted so far. But questions are asked all the same. On Wednesday, KMT legislators William Tseng (曾銘宗), Johnny Chiang (江啟臣), and Lee Yan-hsiu (李彥秀) told a press conference that in the “many cases” where the Tsai family had encountered controversy, Tsai Ying-yangs name had emerged, and this “gave cause for doubts” (會起人疑竇).

An Emerging KMT Opposition Pattern

William Tseng may become a regular questioner, concerning the financial affairs of Tsai’s family people. One of the “controversies” he had quoted had been the issue of a press conference on March 24. There, with different KMT colleagues,  but the same kind of artwork on the wall behind the panel, showing the suspect of the day, Tseng dealt with the issue of Academica Sinica president Wong Chi-huey‘s daughter’s role as a shareholder of OBI Pharma Inc..

KMT legislators press conference artwork

KMT representations:
Mind the guys in the background

One of his fellow legislators, Alicia Wang (王育敏), raised the issue of the company’s shareholder structure (and neatly placed Tsai’s brother there, too, maybe just to make his name available for quote by Tseng on other occasions:

“President-elect Tsai Ing-wen’s (蔡英文) brother and sister-in-law are also shareholders, and so is Wong’s daughter, Wong Yu-shioh (翁郁秀). Are others involved?”

Diplomatic Relations, but no Tax Treaty

The “Panama Papers”, as far as they concern Taiwanese customers, contain not only individuals, but companies, too: Taiwan Semiconductor Manufacturing (founding chairman Morris Chang, who served Taiwan as APEC representative in 2006), TransAsia Airways (more recently in the news for the tragic Flight 235 crash), Yang Ming Marine Transport Corporation, Wei Chuan Food Corporation (in the news since 2013), and the Executive Yuan’s National Development Fund.

The Development Fund was not a taxable organization, Taiwan’s foreign broadcaster Radio Taiwan International (RTI) quotes finance minister Chang Sheng-ford. He used the example to make the point that to suggest that some 16,000 keyword search results for Taiwan in the “Panama Papers” did not signify 16,000 cases of tax evasion. That’s just not the way to look at it.

Chang reportedly also said that while, “if necessary”, Taiwan would establish a Panama Papers working group and start investigating the most high risk people and agencies for tax evasion, the country had no tax treaty with Panama. Also, a Taiwanese anti-tax evasion law had not yet been passed.

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Related

The Panama Papers
Achselzucken schadet, Der Freitag, Apr 7, 2016
The Panama Papers, FoarP, Apr 6, 2016

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3 Comments to “The Panama Papers: Invested, but not Koppied”

  1. Great links including the Foarp thread. My reading is that Beijing would find it impossible to sequester all the cash departed for the sunny Caribbean.

    But Xi is being kept awake by below.

    Hong Kong accounted for 29% of MV’s (sic) total business……around 1 trillion rmb in a recent financial year.

    This is a vote of confidence by Mainland elites in the future of their economy, which is supposed to be re balancing to domestic consumption.

    Not surprising, after the recent ham-fisted attempt to manipulate their stock market, and that exercise burned away 1.3 trillion rmb of their foreign reserves in about four weeks.

    Capital flight (and not Gordon Chang) is a very real threat to the continued ascendancy of the Party its crony networks.

    And here is where we introduce JRs nationalism card.

    Like

  2. Hey KT, welcome back. You probably refer to this Bloomberg story?

    Gordon Chang is going to tell you why he’s still right. Have a great weekend!

    Update: This might be of interest, too: China Stanches Flow of Money Out of the Country, Data Suggests — NYT, April 7

    Like

  3. Thanks JR. Those rmb figures came from BBC as I no longer get any quality me-time on the internet.

    There are about another 700 Panamanian-type firms squirreling money away for elites and celebrities from where ever.

    Its obvious that, despite the $50,000 rule and all the efforts of the Bank of China (other big banks, plus regulators), Mainlanders will continue to park their money overseas,

    What amazes me is the pure quantity of cash fleeing the country.

    If this doesn’t reduce Xi and Co’s control over the economic policy future(horse trading with Chinese characteristics),
    I don’t know what does.

    I should be reading Pettis, Chovanevec etc.

    (BTW. Gordon Chang doesn’t really exist. He is simply a metaphor for cataclysmic social disorder, combined with a lot of wishful thinking.)

    It really is the economy.

    Like

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