Nearly one-third of the business of the law firm at the center of the “Panama Papers” scandal came from its offices in Hong Kong and China, reports said yesterday, with the Asian giant assailed by corruption and capital flight.
More than 16,300 of Panamanian law firm Mossack Fonseca’s active shell companies were incorporated through its Hong Kong and China offices, 29 percent of the worldwide total, according to the International Consortium of Investigative Journalists (ICIJ), which coordinated a year-long investigation into a trove of 11.5 million documents.
The investigation found that relatives of at least eight current or former members of the Central Politburo of the Chinese Communist Party (CCP), the party’s most powerful body, have been implicated in the use of offshore companies.
Such vehicles are not illegal in themselves and can be used for legitimate business needs. However, they commonly feature in corruption cases, when they can be used to secretly move ill-gotten gains abroad.
Graft is rife in China, which Transparency International rates in 83rd place out of 168 in its most recent Corruption Perceptions Index. At the same time, growth in the world’s second-largest economy is slowing, and its wealthy have increasingly sought to move funds abroad, but have to contend with Beijing’s strict exchange-control regime.
Under Chinese President Xi Jinping (習近平), Beijing has launched a much-publicized anti-graft drive, but has not instituted systemic reforms, such as public declarations of assets.
Xi’s brother-in-law and family members of two current members of the Central Politburo Standing Committee (CPSC) of the CCP, Zhang Gaoli (張高麗) and Liu Yunshan (劉雲山), have offshore holdings, the ICIJ reported.
Deng Jiagui (鄧家貴), Xi’s brother-in-law, was previously a shareholder in three companies: Supreme Victory Enterprises, Wealth Ming International and Best Effect Enterprises, reports said.
The companies were closed before Xi took power in 2012.
Relatives of former CPSC members Jia Qinglin (賈慶林), once the fourth-ranked leader in China, Li Peng (李鵬), who led the Tiananmen Square crackdown, Hu Yaobang (胡耀邦), former Chinese vice president Zeng Qinghong (曾慶紅) and Tian Jiyun (田紀雲) were named by the Guardian, which took part in the investigation.
The documents also named movie star Jackie Chan (成龍), billionaire heiress Kelly Zong Fuli and shopping-mall magnate Shen Guojun (沈國軍).
Chinese media have avoided reporting on the leaks’ revelations, and social media has been scrubbed of references to them.
The Global Times, a newspaper with close links to the CCP, yesterday sought to cast doubt on the documents’ provenance.
In Western countries, it said in an editorial, “the politics-business relationship has been largely legalized,” and “politics and the media are both under the control of capital.”
“Whether the journalists investigating the Panama Papers include those serving the US intelligence agencies as fake reporters is a question,” it said.
Japan has deployed long-range missiles in a southwestern region near China, the Japanese defense minister said yesterday, at a time when ties with Beijing are at their lowest in recent years. The missiles were installed in Kumamoto in the southern region of Kyushu, as Japan is attempting to shore up its military capacity as China steps up naval activity in the East China Sea. “Standoff defense capabilities enable us to counter the threat of enemy forces attempting to invade our country ... while ensuring the safety of our personnel,” Japanese Minister of Defense Shinjiro Koizumi said. “This is an extremely important initiative for
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