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.Britain’s The Guardian newspaper, which is working with the ICIJ, said the leak could cause “a seismic shock worldwide to the booming offshore trade”. The leak, in terms of quantity, was 160 times bigger than the WikiLeaks’ political data haul three years ago. The Guardian said the leak also included data on “offshoots in Singapore, Hong Kong and the Cook Islands in the Pacific”.

A few details already released raise questions about French President Francois Hollande’s personal friend and campaign treasurer Jean-Jacques Augier; Maria Imelda Marcos Manotoc, governor of a Philippine province and daughter of late Philippine dictator Ferdinand Marcos; as well as Mongolian politicians and Spanish art tycoons.

Many more names will start to appear as the ICIJ updates its findings through its website and Twitter messages, the SCMP said.

More Hong Kong and mainland firms will be revealed, the ICIJ said. Many of the world’s top banks, including Deutsche Bank and UBS, had been found to have helped clients transfer money to BVI and others havens, such as the Cayman Islands, it said.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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