Hong Kong’s rich face exposure in tax-haven leak

Hong Kong’s rich face exposure in tax-haven leak

HONG KONG – A leak of more than two million documents detailing the offshore bank accounts and shell companies of wealthy individuals and tax-averse companies is making some of the richest and most powerful people in Hong Kong, on the mainland and elsewhere in the world very nervous, the South China Morning Post (SCMP) newspaper reported.

BY –

2 HOURS 59 MIN AGO

HONG KONG – A leak of more than two million documents detailing the offshore bank accounts and shell companies of wealthy individuals and tax-averse companies is making some of the richest and most powerful people in Hong Kong, on the mainland and elsewhere in the world very nervous, the South China Morning Post (SCMP) newspaper reported.

Described as the biggest information leak in recent history, the documents were leaked from the British Virgin Islands to the US-based International Consortium of Investigative Journalists (ICIJ). The group is working with dozens of journalists around the world to process the data and publish the secret financial information that surrounds what the Tax Justice Network estimates are assets worth at least US$21 trillion held in offshore havens, the New York Times (NYT) reported.

The investigation, titled “Secrecy for Sale”, details what it calls “complex offshore structures” used by wealthy people from all over the world, including government officials and their families. They disclose proprietary information about more than 120,000 offshore companies and trusts and nearly 130,000 individuals and agents, including the wealthiest people in more than 170 countries. Not all of those named necessarily have secret bank accounts, and in some cases only conducted business through companies they control that are registered offshore, the New York Times reported.

The ICIJ said its data analysis showed most people setting up offshore entities lived on the Chinese mainland and in Hong Kong and Taiwan, the SCMP said. “This explains why the second-largest source of capital investment flowing into China is the offshore tax haven of BVI,” it said. Read more of this post

India Jobs Program Scam Pays Wages to Dead Workers; “It’s an insult to a man who lived a life of dignity”

India Jobs Program Scam Pays Wages to Dead Workers

The corpse of Indian farmer Bengali Singh burned to ash atop a blazing funeral pyre on the banks of the river Ganges in 2006.

Five years later, the dead man was recorded as being paid by India’s $33 billion rural jobs program to dig an irrigation canal in Jharkhand state. Officials in his village and the surrounding region used at least 500 identities, including those of Singh, a disabled child of eight and a blind 94-year-old man, to fake work logs and steal wages, according to police reports.

“It’s an insult to a man who lived a life of dignity,” Rajendar Singh said, sitting next to the parched canal his father supposedly excavated in their village, Bishanpur, about six hours’ drive northwest of Kolkata. “He’s been wronged.”

District administrators and village heads have used tactics such as ghost workers, fake projects and over-billing to embezzle about $10 billion from the world’s largest workfare initiative, an investigation by Bloomberg News shows. The fraud in the seven-year-old program underscores the challenge of reducing poverty in India as graft permeates everything from food aid for children to the distribution of public grain stockpiles and debt relief for struggling farmers.

Embezzlement remains an intractable issue in the rural employment push, according to D.H. Pai Panandiker, president of the RPG Foundation, a New Delhi-based economic research group. Read more of this post

Will Singapore’s MAS match HKMA’s risk weighting move in property loans? HKMA order banks to set the risk weighting for new home loans at a minimum of 15% to help cushion against any drop in residential property values Vs Spore’s 10%, lowest in the world

Will MAS match HKMA’s risk weighting move?

Bloomberg News reported late last month Deutsche Bank analysts predicting that home prices in Hong Kong could fall by up to 20 per cent in the next two years.

BY COLIN TAN –

4 HOURS 6 MIN AGO

Bloomberg News reported late last month Deutsche Bank analysts predicting that home prices in Hong Kong could fall by up to 20 per cent in the next two years. The forecast came after major banks in the city, including HSBC and Standard Chartered, raised their home loan rates by 25 basis points in response to tighter risk rules imposed by the central bank in February. According to some property analysts, the rise in home loan rates may finally cause the housing market to cool where other measures, in particular, higher additional stamp duties, have failed to do so. On Feb 22, Hong Kong Chief Executive Leung Chun-ying doubled the stamp duty on all property transactions higher than HK$2 million (S$319,000).

However, what was not as well-publicised as the stamp duties was the Hong Kong Monetary Authority’s (HKMA) order to banks to set the risk weighting for new home loans at a minimum of 15 per cent to help cushion against any drop in residential property values. Usually, banks decide on the riskiness of their own assets, which in turn affects the capital they set aside. Depending on the banks’ own internal risk weightings before the minimum percentage imposed by the HKMA, significantly more capital may be needed to be set aside. The impact of the higher risk weightings has now worked itself into the market, leading to higher housing loan rates. One key factor driving home purchases — not just in Hong Kong but elsewhere in Asia — has been the sustained low mortgage costs. “Banks were mispricing their retail mortgage loans. Now, with the new measures from the HKMA, they will be forced to correct it,” the Bloomberg report quoted DBS Hong Kong Chief Executive Sebastian Paredes as saying.

Read more of this post

Is It Beginning? Biggest JGB Price Collapse In Over 10 Years Triggers TSE Circuit Breakers

Is It Beginning? Biggest JGB Price Collapse In Over 10 Years Triggers TSE Circuit Breakers

Tyler Durden on 04/05/2013 00:48 -0400

Just over 4 hours ago we discussed the stunning collapse in 10Y Japanese bond yields. Since then – things have taken a very dramatic turn for the worse for bonds. 10Y JGB yields have exploded higher. The move from 32bps to 65bps triggered circuit breakers on the Tokyo Stock Exchange in JGB Futures trading as JGB prices plunged by their largest amount since September 2002. We can only imagine there is liquidations galore occurring given the massive outsize moves we are seeing in Japanese bonds, stocks, FX, swaps, and CDS. Did the BoJ just lose control? Now that is a reversal!!

People Not In Labor Force Soar By 663,000 To 90 Million, Labor Force Participation Rate At 1979 Levels

People Not In Labor Force Soar By 663,000 To 90 Million, Labor Force Participation Rate At 1979 Levels

Tyler Durden on 04/05/2013 08:58 -0400

Things just keep getting worse for the American worker, and by implication US economy, where as we have shown many times before, it pays just as well to sit back and collect disability and various welfare and entitlement checks, than to work .The best manifestation of this: the number of people not in the labor force which in March soared by a massive 663,000 to a record 90 million Americans who are no longer even looking for work. This was the biggest monthly increase in people dropping out of the labor force since January 2012, when the BLS did its census recast of the labor numbers. And even worse, the labor force participation rate plunged from an already abysmal 63.5% to 63.3% –the lowest since 1979! But at least it helped with the now painfully grotesque propaganda that the US unemployment rate is “improving.”