China is the ‘largest market’ for Panama Papers law firm
Nearly a 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 Thursday, 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% of the worldwide total, according to the International Consortium of Investigative Journalists (ICIJ), which co-ordinated 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 China’s Politburo Standing Committee, the ruling 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. But 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 President Xi Jinping, 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 Politburo Standing Committee (PSC), Zhang Gaoli and Liu Yunshan, have offshore holdings, the ICIJ reported. Read More