What did the Panama Papers reveal about China?
On Sunday, several global news organizations published articles about a treasure trove of leaked documents. They originated from a Panama-based law firm named Mossack Fonseca. Dubbed the Panama papers, their weighty pages revealed how the law firm provided offshore services that allowed some of the world’s most powerful people to conceal their wealth, dodge taxes and engage in other illegal activities that were tangled in a web of unseemly financial transactions. The documents contained the names of politicians of more than fifty countries. Among them, the presidents of Russia, Argentina and the Ukraine.
The news shocked the world. Based on the information disclosed, the politicians named encompassed current and former top Chinese officials, including president Xi Jinping. However, in contrast to the huge reactions of many global media organizations, Chinese news agencies remained silent.
On Monday, only a few online news agencies had translated what the papers had to say regarding illegal financial transactions of powerful types in nations such as Russia and Iceland. State censorship also blocked any news reporting that had something to do with the Panama Papers.
We have gathered and edited some of the published information on individuals from China:
Li Xiaolin, daughter of former Premier, Li Peng
From 1987 to 1998, when Li Peng served as the Prime Minister of China, his second child and only daughter Li Xiaolin, and husband Li Zhiyuan, were the owners of a foundation based in Liechtenstein. According to the Panama Papers, the foundation owned a company in the British Virgin Islands named Cofic Investments. In order to make it harder for herself to be connected to Li Peng during background checks, Ms. Li’s name on her Hong Kong passport was given as “Xiaolin LIU-LI.” In addition to being the Vice president of China Power Investment Corporation, Ms. Li also works for a top consulting firm in China. The scanned copy of her Hong Kong passport was exposed by the International Consortium of Investigative Journalists (ICIJ) which reviewed the papers. One of the directors of Cofic Investments, lawyer Charles-Andre Junod in Geneva, refused to take questions from ICIJ, claiming that the firm was lawful.
Li Zidan, granddaughter of Jia Qinglin, a former member of the Politburo Standing Committee
According to the Panama Papers, Jasmine Li Zidan studied at a boarding school in the US. After graduating from Stanford University, she worked as an assistant to Cai Guoqiang, a Chinese artist based in New York. She later worked at Artsy, an online art retailer. Mossack Fonseca’s report indicates that Li Zidan became the owner of a company called Harvest Sun Trading Ltd. in 2010, when she was under the age of 18. This company was registered in 2009 in the British Virgin Islands. She took ownership of the company for $1 from a person named Zhang Yu in 2010. Zhang is the founder of Hengdeli, a luxury watch retailer in China. Li Zidan also is the sole founder of another company. Li’s name did not appear in the registration documents, though she is the owner of the two companies. Her grandfather, Jia Qinglin, served from 2002 to 2012 as the No.4 member of the Politburo Standing Committee.
Boku Kailai, former Politburo member and secretary of Chongqing, Bo Xilai’s wife
The French architect, Patrick Henri Devillers, was the former commercial partner of Boku Kailai, the wife of Bo Xilai. Bo Xilai was the Politburo member and secretary of the city of Chongqing from 2007 to 2012. He was sentenced to life imprisonment (by the Chinese government) for corruption. The documents show that Devillers and Boku Kailai are co-presidents of a company named Adad. The company is registered in Britain. Devillers holds funds on behalf of Boku Kailai in the company. Court documents indicate that this company tapped corrupt money to secretly purchase a luxurious French villa worth 3.2 million dollars. Devillers’s testimony was accepted by a Chinese Court in 2013.
Deng Jiagui, the brother-in-law of Chinese leader Xi Jinping
In September 2009, Deng Jiagui, the brother-in-law of Chinese leader Xi Jinping, became the sole president of two companies registered in the British Virgin Islands. According to the Panama Papers, up until November 2012 when Xi became the General Secretary of the Communist Party of China, both of these companies were inactive.
Sun Hung Kai Properties in Hong Kong
In 2012, Sun Hung Kai Properties (SHKP) asked Mossack Fonseca to close a company named Yorkshire Limited owned by Thomas Chan Kui-yuen. The law firm’s staff found that Chan was involved in a corruption scheme involving Xu Shiren, former Hong Kong Chief Secretary for Administration, and had been arrested a few weeks earlier. Mossack Fonseca staff were wary whether Chan was the legal owner of the company. They asked SHKP to provide more documentation. SHKP rejected the requests based on the company’s inactivity. Mossack Fonseca staff in Hong Kong were concerned that further pressure for obtain records would encourage SHKP to change law firms.
However, Mossack Fonseca’s president asserted that the company couldn’t be closed without proper documentation. The deadlock continued for three months until SHKP provided the requested papers.
In 2014, Mossack Fonseca found that Chan was the director and beneficial owner of another company in the British Virgin Islands named Moricrown. Moricrown is a subsidiary of Cheung Kong Holdings, the company of Li Ka-shing, Hong Kong’s richest man. One of the founders of Moricrown, Thomas Kwok Ping-kwong, a billionaire co-owner of SHKP, had been charged in the bribery scandal alongside Chan.
Mossack Fonseca documents disclosed that the identity of Moricrown’s owners needed to be legally be updated. Otherwise, there was a risk of being fined more than 10,000 dollars. Six months later, Chan Kuiyan and Thomas Kwok were sentenced to six and five years of imprisonment respectively. Thomas Kwok’s family also owned a company named King Yip Group, which used a company in British Virgin Islands to make billions through commercial cooperation with the Australian government.
Actor Jackie Chan’s name also surfaced in the Panama Papers. According to information revealed by the International Consortium of Investigative Journalists (ICIJ) which probed the Panama Papers, Mossack Fonseca provided services for at least five to six of Chan’s offshore companies. But there’s no indication these financial transactions were illegal. Merely having an offshore company doesn’t necessary entail illegality.
This article was originally published on Apr. 5, 2016 by The Initium Media, a Hong Kong-based digital media company. Asia Times has translated it with permission with editing for brevity and clarity.
Translated by Tenei Nakahara for Asia Times