OPENING THE PANDORA BOX - Aakash Batra

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 In early October the world woke up to another leak from the safe havens of the world. The leak has been termed Pandora Papers. The ICIJ (International Consortium of Investigative Journalists) claims that they have received 11.9 million documents from 14 offshore services from around the world. More than 600 journalists from 117 countries have looked at the hidden fortunes of some of the most powerful people on the planet. The companies are involved in setting up shell companies and other offshore nooks for the ultra-wealthy and thus aiding them in evading tax authorities by hiding their assets.

I would like to help you understand how this world of shell companies works by giving you an anecdote from a book that I read a while ago which was based on the Panama Papers leak. Let's say there is a billionaire who has amassed a lot of wealth from dubious means, it may be by taking bribes for doing a favor. Now, he wants to park this money somewhere you can never trace it back to him/her. What better way to do this than have a company under a person's name unknown to you but is helping you to hide all your wealth and is legally obligated to you if the need arises to give it all back to you? This is what a shell company does. It hires a person under whose name a company is opened. Your name doesn't appear anywhere as it's legally allowed to not reveal the name of the real account holder in the tax havens like Panama, Luxembourg, and many alike. This is what must have been done by companies that helped set up shell companies in Pandora's leak.

The ICIJ claims that it has found the dirt on many current and previous world leaders. In all 35 world leaders' names have been featured in the list. To name a few, sitting Kenyan President, Jordan's King Abdullah II bin Al-Hussein & some close associates of Vladimir Putin. Some sitting parliamentarians of India & Pakistan also appear on the list. Celebrities like Shakira and sports legend Sachin Tendulkar's name have also been featured. The ICIJ analysis of the secret documents identified 956 companies in offshore havens tied to 336 high-level politicians and public officials, including country leaders, cabinet ministers, ambassadors, and others. Everyone prominent personality whose name has come up is following the mantra of "Ignorance is Bliss" right now and is denying all the allegations.

Now it will be interesting to see how this plays out. We have seen in the case of the Panama Papers leak that no significant action was taken against most of the people whose names had cropped up in the leak. A brave decision was taken back then when Iceland’s PM Gunnlaugsson, stepped down due to the allegations from the leak. It remains to be seen the after effect of Pandora Papers and what action individual country takes against its citizen whose names have come up in Pandora Papers.

I would like to end this by posing a couple questions to you:

Is it okay for people to use legal loopholes to save their money or paying taxes is paramount?
Whose fault is it that in today’s world tax havens exist?

Please let us know your thoughts in the comments.

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