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Panama Papers

Hong Kong was busiest office of Panama Papers law firm

The Hong Kong branch of Mossack Fonseca is the busiest for the Panamanian law firm that specialises in setting up offshore bank accounts

PUBLISHED : Thursday, 07 April, 2016, 11:37pm
UPDATED : Friday, 08 April, 2016, 4:09pm

Nearly a third of the business of Mossack Fonseca, the law firm at the centre of the Panama Papers scandal, came from its offices in Hong Kong and mainland China, reports say – making the Asian giant its biggest market.

Shell companies incorporated through the Hong Kong and the mainland offices of the Panamanian law firm accounted for 29 per cent of its active companies worldwide, said the International Consortium of Investigative Journalists (ICIJ), which co-ordinated a year-long investigation of the 11.5 million leaked documents.

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The latest release of the investigation of the law firm’s leaked documents, which has already implicated 140 leading politicians, businessmen and institutions around the world in recent days, have so far found relatives of at least eight current or former members of China’s Politburo Standing Committee, the ruling Communist Party’s most senior decision-making body, have used offshore companies.

The newly revealed include a daughter-in-law of the Communist Party’s current chief of ideology, Liu Yunshan ( 劉雲山 ), and a son-in-law of first-ranking Vice-Premier Zhang Gaoli (張高麗).

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As the ICIJ states at its website, owning an offshore account is not illegal. But the leaked documents showed that offshore banks and law firms often failed to ensure clients abided by the law, it said.

They have been growing calls in recent years for officials to make public their personal wealth as a way to stem corruption. But progress has been limited, although authorities have stepped up enforcement for officials to declare their assets internally.

Liu’s daughter-in-law Jia Liqing was a director and shareholder of Ultra Time Investments Ltd, incorporated in the British Virgin Islands in 2009, leaked documents show.

Zhang’s son-in-law Lee Shing Put was a shareholder of three companies incorporated in the British Virgin Islands: Zennon Capital Management, Sino Reliance Networks Corporation and Glory Top Investments Ltd.

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Zhang’s daughter Zhang Xiaoyan is married to Lee, the South China Morning Post reported in 2012. Lee worked a Hong Kong-listed glass manufacturer founded by his father. Hong Kong corporate records show Lee was also a director of 17 Hong Kong companies, the Post reported.

Both Liu and the elder Zhang are expected to retire from the Politburo Standing Committee next year.

Reports yesterday also showed that Zeng Qinghuai, brother of former vice-president Zeng Qinghong (曾慶紅), was a director of China Cultural Exchange Association Ltd, a company that was first incorporated in the Pacific island nation and offshore company haven of Niue, before it was re-domiciled in nearby Samoa in 2006.

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Meanwhile, the Hong Kong Economic Times reported yesterday that Jasmine Li, or Li Zidan, a granddaughter of former leader Jia Qinglin (賈慶林) who has already been named in earlier Panama Papers’ reports, bought a luxury home in Hong Kong for HK$387 million in November. Jia was also a Poliburo Standing Committee member and headed the National People’s Political Consultative Conference , China’s top political advisory body, before retiring in 2013.

ICIJ said Mossack Fonseca’s Hong Kong office was the firm’s busiest branch globally.

Yu Zhengsheng (俞正聲), Jia’s successor now ranked fourth top leader of the party, told reporters in 2012 he was ready to make public his assets if the party required it.

The leaks have also revealed the financial dealings of President Xi Jinping’s ( 習近平 ) family members and other senior Chinese officials, which the Post reported in detail in 2014.