Pandora Papers: Banking leak opens Pandora’s box of offshore accounts of more than 400 Australians

More than 400 Australians have been named in a massive leak of offshore company and banking details which has revealed secret investments, real estate deals and artworks of celebrities, politicians and business figures who control more than $1 trillion in assets.

Pandora Papers: Banking leak opens Pandora’s box of offshore accounts of more than 400 Australians

More than 400 Australians have been named in a massive leak of offshore company and banking details which has revealed secret investments, real estate deals and artworks of celebrities, politicians and business figures who control more than $1 trillion in assets.

The documents – the largest leak of offshore files in history – identify at least 14 current heads of state and 21 former heads of state among a total of 330 politicians who control offshore trusts and companies, including Czech Prime Minister Andrej Babis, former British PM Tony Blair and Jordan’s King Adbullah.

 

The Australian Taxation Office said in a statement it would be analysing the information to identify any possible Australian links.

Close associates of Russian President Vladimir Putin are among 130 billionaires from 45 countries who appear in the files, which cover 14 of the largest offshore firms that administer nominee companies for wealthy clients in low-tax jurisdictions.

Their clients range from celebrities including Indian cricketer Sachin Tendulkar, singer Shakira, supermodel Claudia Schiffer, actress Monica Belucci and Spanish tenor Julio Iglesias, to major crime figures.

In 2019 and 2020, 11.9 million documents, known as the Pandora Papers, were leaked to the International Consortium of Investigative Journalists and shared with 600 journalists and 150 media organisations around the world, including The Australian Financial Review.

“We’re not talking about millions of dollars here, we’re talking about trillions of dollars,” ICIJ director Gerard Ryle said.

“We are aware that the ICIJ is today reporting they have released data referred to as the Pandora Papers,” says ATO’s Will Day. Photo: Alex Ellinghausen

Deputy Tax Commissioner Will Day, who heads the Serious Financial Crime Taskforce, told the Financial Review: “We are aware that the ICIJ is today reporting they have released data referred to as the Pandora Papers.

“We will certainly look at this data set and compare it with the data we already have to identify any potential connections.”

Tax Commissioner Chris Jordan led the global response to the ICIJ’s Panama Papers leak in 2016, flying to Paris days after the release to chair a meeting of tax officials from more than 30 countries, through the Joint International Taskforce on Shared Intelligence and Collaboration.

“JITSIC member countries will continue to work together to pool resources and share intelligence to rapidly develop a more accurate picture of what the data is telling us,” Mr Day said.

The size of the leak – with 2.94 terabytes of data from 14 offshore firms –makes it larger than both the Panama Papers, which held documents from Panama firm Mossack Fonseca, or the ICIJ’s Paradise Papers (from British Virgin Islands law firm Appleby) in 2018.

Czech Republic Prime Minister Andrej Babis moved $US22 million through offshore companies to buy a chateau in the Riviera.  AP

Among the 330 politicians and public officials identified in the Pandora Papers, documents show Czech PM Andrej Babis moved $US22 million ($30 million) through offshore companies to buy the lavish five-bedroom Chateau Bigau in Mougins, the hilltop village on the Riviera where Picasso spent the last 12 years of his life.

Mr Babis, who is campaigning for the Czech election on October 8 on his stand against tax avoidance, elites and the establishment, has never included the chateau in asset disclosures obtained by ICIJ partners, which he was required to make under Czech law. He has vigorously denied breaching reporting rules.

In Jordan last year, following street protests, the government promised to crack down on wealth hidden in tax havens. Pandora documents show that during the years of unrest of the Arab Spring, Jordan’s King Abdullah was using shell companies to buy property in the US and UK – including a $US33.5 million mansion at Malibu in 2014.

It is part of $US106 million he spent between 2003 and 2017 on real estate, including in central London and Ascot in the UK and Washington DC. A spokesman said the king’s public profile made it necessary to make investments through nominee companies.

Kenyan President Uhuru Kenyatta, who made a political comeback campaigning against corruption, this year vowed to make transparency, accountability and good governance central to government policy. The documents show he has $US30 million in assets held in tax havens including Panama.

“There are a range of legitimate reasons that someone may have for an offshore bank account or structure,” Mr Day said. “We know most Australians do the right thing.”

However, the leak underlines the reputational risk that Australian business figures can face in their legitimate use of conventional offshore structures in jurisdictions like the British Virgin Islands, only to discover that their service provider’s client list includes figures accused of serious crime or corruption.

Many of the Australians named in the Pandora Papers are clients of Asiaciti, which runs trust operations in Singapore, Samoa, the Cook Islands and New Zealand.

The firm has been sharply criticised in a series of Australian court judgments for its role in running a network of trusts and companies for disgraced Sydney accountant Vanda Gould, whose companies and clients have faced tax assessments of more than $380 million.

Asiaciti has been criticised for its role in running a network of trusts and companies for disgraced Sydney accountant Vanda Gould. 

In November 2018 an Asiaciti compliance officer described the companies that Asiaciti administered for Gould and his clients as explosive.

“​​We ought to defuse the ticking time bomb by working towards exiting the relationship,” he wrote in an email. But ending the relationship was not that simple.

“As you are aware we need VG’s assistance if we are to wind up the Superannuation Funds,” he said.

Asiaciti’s founder, accountant Graeme Briggs, who has decorated his Melbourne mansion with expensive artwork, has a client list that includes fugitive Moldovan politician Vladimir Plahotniuc, and Abubakar Atiku Bagudu, a Nigerian politician who laundered billions of dollars in public funds. There is no suggestion that Mr Briggs was involved in or knew about the money laundering.

Other clients included Myanmar’s former agriculture minister, Major-General Nyunt Tin, who was forced to resign for corruption, and senior FIFA figures involved in the world soccer body’s corruption scandal.

​​In 2020, Singapore’s financial agency fined Asiaciti $US793,000 for failing to implement “adequate” anti-money-laundering policies between 2007 and 2018.

The documents are also full of mundane and entirely legitimate offshore holdings.

Property developer Harry Triguboff incorporated Conolly Import Corp in the Bahamas in January 2009, with shares held by a British Virgin Islands nominee company and a board of directors in Limassol, Cyprus.

Samoa super fund

Former foreign minister Andrew Peacock had an entirely innocuous entry as a director of BVI company Trafalgar International Group, a fund manager whose board he joined.

Westpac director Steven Harker, formerly head of Morgan Stanley Australia and on the Future Fund’s board of guardians, said Barclays Bank set him up with a Samoa super fund with Asiaciti.

Former Goldman Sachs executive Andrew Stuart set up a British Virgin Islands company, Fulton Trade & Invest Limited, in October 2007 after he left the investment bank, but the company lapsed the following year.

Israeli-born Point Piper resident Alon Mahpud runs NG1 Family Office, which services investor clients in Monaco, Luxembourg, Geneva and London.

Mr Mahpud and his wife have been directors of several UK property companies that also featured former Conde Nast executive Grant Pearce, who joined News Corp’s NewsLifeMedia last year as commercial director for GQ Australia.

In June 2017, Mr Mahpud incorporated a BVI company, Eperstein Group, also to invest in UK property. Mr Pearce, who was then editorial director of GQ Asia Pacific in Hong Kong, also joined the Eperstein board.

Of the roughly 40,000 names identified to date in the Pandora Papers, two of the youngest are Australian twins who the Financial Review has chosen not to name, who were seven years old in 2017 when they were named beneficiaries of two Panama foundations six days after the Federal Court made a $40 million judgment against their grandfather.

Former broker Andrew Kroger is no stranger to the offshore world. Three decades ago he was organising several back-to-back loans for his listed company, Strand Holdings, from European Pacific banking group in the Cook Islands, where Guy Jalland (now with James Packer’s Consolidated Press) and James MacKenzie (now chairman of Slater & Gordon) worked.

The deals were part of the so-called Wine Box documents tabled in the New Zealand Parliament in 1993 (there was no suggestion the back-to-back loans were illegal).

The Pandora Papers show that Mr Kroger, now based in the UK, set up Sixty Six Cadogan Ltd in Nevis in 2006, one of several Australians who set up there at the peak of the island’s popularity when St Kitts and Nevis was offering a golden passport scheme.

In 2017 Mr Kroger reincorporated the company in the BVI and renamed it Sixty Six Ltd.

On May 17, 2018, a new racing writer at The Times in London, Mark Souster, collaborated with Kate McClymont of The Sydney Morning Herald to reveal that one of the two key shareholders in online gaming company Colossus Bets, which was about to launch a new pool betting venture with 55 UK racecourses, was Zaljko Ranogajec, aka John Wilson.

Mr Ranogajec, a Tasmanian maths genius, is a long-time partner of David Walsh, the billionaire founder of Tasmania’s MONA art gallery. The two ran a billion-dollar gambling operation known as the Punters Club.

Within three days of the Times and SMH stories, the racecourses pulled out of the deal with Colossus Bets. But Pandora Papers files show the unkindest cut came four weeks later.

The Tax Office had reached a settlement with the Punters Club principals several years earlier. But on June 19, 2018, the BVI International Tax Authority wrote to BVI company Zisage Ltd with a notice to produce any material relating to Mr Walsh, Mr Ranogajec and a string of other names.

It was a request from the ATO, which had reopened its Punters Club file. There is no indication the matter went further.

Other Australia-related names in the files include associates of the failed Trio Capital –Jack Flader, James Sutherland, Frank Bell and Carl Meerveld, who each had offshore holdings.

One of the former clients of colourful lawyer John Voitin is in the files writing to Asiaciti over a $3 million dispute which involves an offshore company where he was shut out after he made his now estranged wife the beneficial owner.

More than a decade ago, 2003 former world champion racing driver Allan Jones and flamboyant Gold Coast promoter Andrew Haberfield were setting up a string of BVI companies in a short-lived promotional plan.

Today Haberfield is focused on more domestic concerns. In 2019 he was sentenced to 12 months probation on nine charges of possession of dangerous drugs and drug utensils after initially telling police that 330g of cannabis oil they found in his home was to treat his dog, which suffered from “arthritis and some illness”.

In 2013 Asiaciti wrote to the head of Samoa’s Money Laundering Prevention Authority with details that showed former Ernst & Young principal Anthony Dickson was the beneficial owner of Dampier Finance Asia Pacific Ltd of Samoa, which Dickson and Gold Coast accountant Michael Issakidis had claimed was an independent Asian-based merchant bank in what became a $135 million tax fraud.

The MLPA was responding to an Australian Taxation Office request for assistance.

Dickson was sentenced to 14 years’ jail in 2015, while Issakidis received a 10-year sentence in 2018. In court judgments Issakidis was said to operate an account for another Samoan company, Karkalla International Holdings. Asiaciti denied that Issakidis was linked to Karkalla, which was incorporated with a bearer certificate, but in an embarrassing mistake, the bearer certificate couldn’t be found.

Further articles in the Pandora series will reveal the technology and design entrepreneurs and mining executives who feature in the files.