The Panama Papers: All about the biggest leak, people and what they did

  • HT Correspondent, Hindustan Times
  • Updated: Apr 05, 2016 15:05 IST
The ICIJ allegedly exposed a range of personalities from political leaders to filmstars whom a Panama-based company helped to use tax havens to hide their wealth. ( screengrab))

A major exposè on Monday sent shockwaves through the top offices of the nations named in The Panama Papers, triggering a series of probes across the globe.

The leak was the result of an effort of over 100 media groups who published an extensive report of probe into dubious offshore financial deals of prominent people across the globe who used tax havens to hide their wealth.

The documents were leaked from Mossack Fonseca – a Panamanian law firm – by an anonymous source to German daily Sueddeutsche Zeitung, who then shared it with media worldwide by the International Consortium of Investigative Journalists (ICIJ).

The people it allegedly exposed ranged from political leaders like Russian President Vladmir Putin and Pakistan Prime Minister Nawaz Sharif, President of Argentina, Iceland’s Prime Minister and the King of Saudi Arabia as well as 500 Indians including Bollywood actors Amitabh Bachchan and Aishwarya Rai Bachchan.

Here’s everything you want to know about the expose that has threatens to shake the political and economic landscape of the world.

What is the expose all about?

The documents, from around 214,000 offshore entities covering almost 40 years show how the company helped its clients launder money, dodge sanctions and evade tax.

The confidential documents leaked from Mossack Fonesca show that in many cases some of the world’s most powerful people used offshore havens to conceal their fortunes and dodge taxes worth millions of dollars. It was done through shell companies, initially incorporated without significant assets or operations, to disguise ownership or other information about the funds involved.

A company list showing the Mossack Fonseca law firm is pictured on a sign at the Arango Orillac Building in Panama City. (REUTERS)

What is Mossack Fonesca and how is it involved?

Mossack Fonseca is the world’s fourth biggest provider of offshore services and its services include incorporating companies in offshore jurisdictions such as the British Virgin Islands. It administers offshore firms for a yearly fee. Other services include wealth management. It has acted for more than 300,000 companies.

The firm is Panamanian but, according to its website, has a global network with 600 people working in 42 countries. It has franchises around the world, where separately owned affiliates sign up new customers and have exclusive rights to use its brand.

Mossack Fonseca operates in tax havens including Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man.

More than half of the companies are registered in British-administered tax havens, as well as in the UK itself.

How it all started?

A source from inside the Mossack Fonseca contacted the German newspaper Süddeutsche Zeitung and offered to turn over the documents, with no compensation in return but an assurance of safety and secrecy of identity.

And why? The secret source had a simple reason: “I want to make these crimes public.”


Realising the extent of the investigation required, the German daily then shared the data with media worldwide by the International Consortium of Investigative Journalists (ICIJ). The investigation began by June 2015 and went on for nine months.

How much data has been leaked?

“More than what you’ve ever seen before” is what the source said.

There are as many as 11.5 million documents and 2.6 terabytes of information drawn from Mossack Fonseca’s internal database. This, in simple terms, is huge enough to dwarf the US diplomatic cables released by WikiLeaks in 2010 as well as confidential intelligence documents provided to journalists by whistleblower Edward Snowden in 2013. Also, as prominent people have been named, it is likely to cause as huge repercussions across the world.

How can shell companies facilitate financial crimes?

Shell companies offer a high degree of anonymity that allows a person’s business activities to remain untraced by the authorities as well as rivals in business and personal life. A business concern shrouded in such secrecy cannot be traced either by an estranged wife who wants to sue your pants off or creditors who may want to seize your property for defaulting on payments. The government can’t tax you for financial assets it doesn’t know about either.

Who are some of the prominent people exposed?

The documents exposed the holdings of 12 current and former world leaders, and details of hidden financial dealings of 128 more politicians and public officials worldwide. Besides Sharif and Putin, the other international leaders mentioned in the documents were former Egyptian president Hosni Mubarak, late Libyan leader Muammar Gaddafi and Syrian President Bashar al-Assad.


Argentinean footballer Lionel Messi’s name also cropped up, setting sporting circles abuzz.

The most prominent among the Indians named, as per an Indian Express report, were real estate tycoon KP Singh, late gangster Iqbal Mirchi and actors Amitabh Bachchan and Aishwarya Rai Bachchan.

Why does the Panama papers revelation even matter?

The leak shows how offshore tax shelters can be exploited by the rich and the famous despite all the safeguards put in place by their respective countries. It also reveals how prominent people across the world connived with major banks to create hard-to-trace companies. Ironically, among the accused were many people who rose to prominence on the anti-corruption platform.

What was Mossack Fonseca’s defence?

The law firm termed the Panama papers revelation as a “crime” and “an attack” on the nation.

“This is an attack on Panama because certain countries don’t like it that we are so competitive in attracting companies,” AFP quoted Ramon Fonseca, one of the founders of the firm, as saying.

“Privacy is a fundamental human right that is being eroded more and more in the modern world. Each person has a right to privacy, whether they are a king or a beggar,” Fonseca said.

What next?

The major data leak triggered a series of probes by various state authorities across the globe.

After vowing to “vigorously cooperate” with any legal probe, the Panama prosecutors on Monday said, “The facts described in national and international communication media publications under the term ‘Panama Papers’ will be the subject of criminal investigation.”

The people of Iceland protested to oust their Prime Minister Sigmundur Gunnlaugsson, while China censored the access to sites and media coverage on the Panama Papers after President Xi Jinping was also implicated in the matter.

India too reacted sharply to the exposè and set up a multi-agency probe group comprising of the Reserve Bank of India and the Central Bureau of Direct Taxes (CBDT) to probe the list of 500 Indians including celebrities and industrialists.

(With agency inputs)

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