Rahimullah Yusufzai reports on the latest leaked documents that are troubling Pakistan’s political and business elite

The political uproar caused by the Panama Papers leaks in Pakistan eighteen months ago has yet to end, but now the Paradise Papers revelations have started grabbing headlines too.

According to media reports, the Paradise Papers have identified 135 Pakistanis with accounts in a Swiss bank, which they created in their own names or through offshore companies. However, the International Consortium of Investigative Journalists (ICIJ), which released these latest leaks, disclosed the names of only six people, mostly businessmen.

The most prominent among them is former Prime Minister Shaukat Aziz, a politician who served under military ruler President General Pervez Musharraf from 2004 to 2007, having been handpicked from the world of business while serving as a senior executive at Citibank in the US and brought to Pakistan to enter politics as Musharraf’s finance minister.

Interestingly, Aziz set up the offshore firm, Antarctic Trust, in the name of his wife, three children and granddaughter weeks before he came to Pakistan as, according to his lawyer, he wanted ‘to ensure that if he were to die, his assets would pass efficiently to his family’. These assets weren’t declared to any Pakistani institution in financial documents that Aziz submitted from 2003 to 2006, when he held important public offices in Pakistan, but his lawyer argued that Aziz wasn’t required to declare his trust in Pakistan as he was a ‘settler’ there, while his wife and children didn’t have to make it public as they were the trust’s beneficiaries, not the beneficial owners.

The trust’s protector was the Bermuda office of Appleby, the law firm whose data on offshore companies registered in tax havens such as Bermuda, The Bahamas and the British Virgin Islands was leaked to the German newspaper Süddeutsche Zeitung (SZ). In a 2012 internal memo, the firm’s compliance officer noted that Aziz had been accused by the opposition of false declaration of assets, corruption and misappropriation of funds.

Mansha argued that the companies were liquidated almost a decade ago

Aziz settled abroad when his term as prime minister ended in 2007. The Antarctic Trust was closed in Sept 2015.

Other Pakistanis listed in the Paradise Papers leaks include Ayaz Khan Niazi, the former chairman of the National Insurance Corporation Limited (NICL). Niazi was named with links to three offshore holdings in the British Virgin Islands set up in 2010 when he was serving as head of the NICL. However, in the record Niazi’s two brothers, Hussain Khan Niazi and Muhammad Ali Khan Niazi, were shown as beneficial owners of the offshore firms. Niazi and his father and mother were listed as directors of the company. It was during Niazi’s tenure that a scandal rocked the NICL pertaining to financial embezzlement in the purchase of official land. The case against Niazi, the then commerce minister Makhdoom Amin Fahim, who has died, and several bureaucrats is awaitinga court decision.

Leading businessman magnate Sadruddin Hashwani, who owns two chains of hotels and an oil exploration company in Pakistan, has also been mentioned in the Paradise Papers as owner of one offshore company each in Barbados and the Cayman Islands. The documents show these companies were used to secure hefty loans from banks. Earlier, the Panama Papers also revealed that Hashwani owned two offshore firms registered in the British Virgin Islands.

Hashwani told the media that he had explained his position last year when he was identified as the owner of offshore companies in the Panama Papers leaks. There was nothing to add as he had legally and openly secured a business loan from the bank.

ASSETS: Pakistan's former PM Shaukat Aziz set up Antarctic Trust in the names of members of his family
ASSETS: Pakistan’s former PM Shaukat Aziz set up Antarctic Trust in the names of members of his family

Mian Muhammad Mansha, chairman of the Nishat Group that owns textile mills, a bank, hotel, department store and other properties, and one of the richest men in Pakistan, was stated to be linked to six offshore companies, including four registered in the British Virgin Islands and two in Mauritius. The Paradise Papers also revealed that a Swiss bank account was found to be connected with these companies from 1994 until 2007. In his defence, Mansha said he opened these bank accounts for managing his day-to-day living in the 1990s when he had to move to the US due to the adverse political situation in Pakistan. He argued that the companies were liquidated almost a decade ago and the money repatriated to Pakistan through official banking channels and duly recorded in tax returns.

A banker, Alauddin J Feerasta, who is currently chairman of Soneri Bank in Pakistan, was named in the Paradise Papers as the owner of an offshore company in the British Virgin Islands. His nephew, Nooruddin Feerasta, who is also a businessman, was listed as the owner of an offshore firm in the British Virgin Islands. Both have accounts in a Swiss bank. Unlike the other Pakistanis mentioned in the Paradise Papers, Feerasta and his nephew haven’t yet responded to media queries.

Though the latest leaks have caused a stir in Pakistan’s political, business and media circles, there is widespread feeling that an investigation into the Paradise Papers issue will take time and still not lead to arrests and convictions. This despondency is due to the slow pace of investigations against the 436 Pakistanis mentioned in the Panama Papers leaks as owners of offshore companies.  In fact, only Prime Minister Nawaz Sharif, his two sons, Hassan and Hussain, and daughter, Matyam Safdar, were investigated (along with Finance Minister Ishaq Dar, also Sharif’s relative) and put on trial. This prompted the deposed prime minister to complain that the investigations into the Panama Papers leaks were Nawaz Sharif-specific and politically motivated. Though he didn’t name the powerful military establishment as being behind his disqualification and trial, he gave enough hints to make it obvious who was the target of his ire.

Nawaz Sharif eventually lost his job as he was disqualified by the Supreme Court of Pakistan for dishonesty. Ishaq Dar also resigned as finance minister and moved to the United Kingdom to seek medical treatment.

There is widespread feeling that an investigation into the Paradise Papers will take time and still not lead to convictions

However, the situation is now changing. The country’s tax body, the Federal Board of Revenue (FBR), has said it is ready to issue notices to all Pakistani citizens whose investments in offshore companies were revealed in the Paradise Papers. The FBR explained that it would adopt the same method it used when investigating the Pakistanis named in the Panama Papers leaks and let its intelligence and investigation wing issue notices to all those identified, giving them 15 days to answer questions about their ownership of offshore companies.

The FBR’s experience in getting details of the assets of individuals named in the Panama Papers from the authorities in nine tax havens worldwide hasn’t been encouraging. No reply was received from the governments in these countries when the FBR sought details of the assets of the Pakistani citizens listed. One hurdle in getting this kind of information is the lack of a treaty between Pakistan and the tax havens on preventing tax evasion. The FBR is also seeking help from the Organization for Economic Cooperation and Development (OECD), a multilateral mechanism regarding the exchange of information on asset details. Besides, the FBR would have to first ascertain whether these offshore companies were constituted legally or were intended for the purpose of tax evasion, the incidence of which is fairly high in Pakistan. According to officials, only 39 percent of such cases were pursued in recent years.

The action against Nawaz Sharif and his family has raised expectations that other influential people will be investigated and punished for stashing away their wealth abroad, hiding assets and evading tax. However, it remains to be seen if the ongoing accountability campaign will be taken to its logical conclusion. People are attaching great hopes to the superior judiciary and the Supreme Court on the basis of a writ petition that has already sought a report on the 436 Pakistani citizens named in the Panama Papers.

A similar legal challenge is expected to be launched in the court against those listed in the Paradise Papers. A list of 100 Pakistanis who own property in Dubaihas also been presented in the National Assembly.

Rahimullah Yusufzai is a Pakistani journalist and Afghanistan expert. He was the first and last reporter to interview Taliban leader Mulla Mohammad Omar, and twice interviewed Osama bin Laden in Afghanistan in 1998. His achievements have been acknowledged by several prestigious awards, including Tamgha-e- Imtiazand Sitara-e-Imtiaz

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