THE Pandora Papers exposé earlier this month has stirred debate about the ethics of Malaysian elites, including ministers and elected representatives, holding offshore accounts in tax havens.

The report by the International Consortium of Investigative Journalism delves into where the wealthy and powerful around the world stash their money.

The data dump, the largest ever, comprises more than 12 million documents, in which are named 35 current and former world leaders, more than 330 politicians and public officials in 91 countries and territories.

This is the fourth such investigation conducted by CIJ with the assistance of 600 journalists from 117 countries.

The information leak comes from 14 sources who leaked 2.94 terabytes of confidential files.

In 2013, the CIJ reported on the Offshore Leaks, which had 2.5 million files of data, followed by the 2016 Panama Papers, which had 11.5 million files, and the 2017 Paradise Papers of 13.4 million files.

It is estimated that about US$5.6 trillion (RM21.58 trillion) to US$32 trillion of the world’s wealth are stashed in offshore accounts.

What are offshore accounts?

An offshore account is one that is held in a country that the person does not reside in, typically tax havens such as the British Virgin Islands, the Cayman Islands and closer to home, Singapore.

According to HSBC, an offshore account is an effective way to manage one’s finances across multiple countries and regions.

The banks list tax savings, security and the simplicity of an offshore account as one of the main draws of setting up such an account.

Setting up an offshore account alone is not in itself illegal, but of late it has been called into question as unscrupulous parties use loopholes in the system to move money though a secret network of companies to hide proceeds from criminal activity.

Who is named in the Pandora Papers?

The Pandora Papers name several high-profile Malaysia individuals including Finance Minister Tengku Zafrul Tengku Abdul Aziz, Umno chief Ahmad Zahid Hamidi, former finance minister Daim Zainuddin, Deputy Finance Minister II Yamani Hafez Musa and Selayang MP William Leong.

* Tengku Zafrul Abdul Aziz

The finance minister is named a director of Capital Investment Bank (Labuan) Limited, a boutique bank incorporated in Labuan, in documents from Panama law firm Alemán, Cordero, Galindo & Lee (Algocal).

Capital Investment was Kenanga Holdings Bhd’s offshore investment banking unit. The group sold its entire stake to Amanie Corp Advisors Sdn Bhd in 2014 for more than RM6 million.

The former banker said he was the group director and a member of the executive management committee of Kenanga Holdings Bhd from January 2009 to June 2010.

He had, however, relinquished all executive and directorship roles at Kenanga Group in 2010.

* Ahmad Zahid Hamidi

The Umno president was named a director of a firm called Breedon Limited in the British Virgin Islands.

The firm was incorporated in September 1996 with Zahid and Fon Kin Voon as directors before the company’s name was changed to Rising Resources (BVI) Limited in November that year.

In 1999, the company had a share capital of US$50,000, but the nature of the business was not revealed.

Documents from Algocal showed that the company was struck off for being dormant several years after incorporation.

* Daim Zainuddin

The former finance minister, his children and wife are said to hold at least RM141 million in offshore accounts.

His sons, Muhammed Amir Zainuddin Daim and Muhammed Amin Zainuddin Daim, were named owners of a British Virgin Islands firm Newton Invest & Finance Limited in 2007 when they were nine and 12, respectively.

In 2017, they were named owners of Splendid International Ltd (BVI) which held London properties worth £12 million (about RM65 million at 2017 exchange rates).

Daim has said that his dealings are legitimate and part of “estate planning” as he has retired from business. He also said he had paid all taxes due in jurisdictions where he owned properties and investments.

* William Leong

The former PKR treasurer and Selayang MP and his wife are listed as co-owners of Collister Holdings Ltd, a company incorporated in Jersey in 2009.

The company has 50,000 shares at US$1 per share, but there is no indication of what the firm does..

Leong was also named in the Offshore Leaks where his law firm William Leong & Co Advocates & Solicitors were revealed as intermediaries of a BVI firm Maxcorp (Asia) Overseas Ltd.

Leong said his role in Collister was linked to his position as executive vice president and chief operating officer of the Manila-based Philippine National Steel Mill from 1994 to 1997.

By the time he returned to Malaysia and became a serving MP, he said Collister was no longer being used, so it was not part of his declaration of assets.

* Yamani Hafez Musa

The Sipitang MP is reported to be a director of Great Ocean Consultants from 2013 to 2015.

In 2015, the role is said to have been taken over by his father, former Sabah chief minister Musa Aman.

Iin 2016, the company was sold to Mau Kam Wan, who was formerly the executive director of investment holdings company Eastland Equity.

Documents from Singapore-based corporate services provider Trident Trusts state that in March 2016, right before Musa transferred ownership Mau, the company held US$310,000 in a Deutsche Bank account.

* Mahmud Abu Bekir Abdul Taib

The son of Sarawak Governor and former chief minister Abdul Taib Mahmud, Bekir was named a director of Rodinmass Incorporated in the British Virgin Isles.

Bekir took over from his mother Laila Taib after her death in April 2009.

The company was set up to hold commercial properties in Seattle, Washington, United States, worth US$35 million, which was purchased with a loan.

* Jho Low’s parents

The fugitive businessman’s parents, Larry Low and Goh Gaik Ewe, were named the sole shareholders of Coswell Corporation and Strategic Equities Limited incorporated in the British Virgin Isles.

Coswell was set up for property investment in London with an asset value of US$2 million while Strategic Equities was to hold shares in Frencken Group Ltd valued at US$5 million.

Frencken Group is an industrial and precision machine manufacturer incorporated in Singapore.

Low and his wife left Malaysia in 2018, and their whereabouts are unknown.

What is the government’s reponse?

On Monday, law minister Wan Junaidi Tuanku Jaafar told Parliament that relevant enforcement agencies including the Malaysian Anti-Corruption Commission will be investigating the revelations in the Pandora Papers.

He also gave his assurance that he will have a talk with Prime Minister Ismail Sabri Yaakob to allow those named in the Pandora Papers to explain themselves in Parliament.

Wan Junaidi clarified it was not an offence to hold an offshore accounts unless there is evidence of criminal activity.

Opposition Leader Anwar Ibrahim, who has demanded investigations, has been called in by the MACC to assist in the probes.

The MACC said it was working with Bank Negara Malaysia and other agencies in its investigations. – October 28, 2021.