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Pandora Papers exposé: On the trail of trust networks linked to Nadesan
The offshore financial world is a byzantine maze that allows clients to shield wealth from domestic tax regimes that govern the rest of us. But continuous data leaks by whistleblowers are slowly stripping away the layers to reveal just how much cash is stashed away overseas.
This is a complex organ of trusts, holding companies, other entities and bank accounts. While there are legitimate uses for all of these–and there is often no documentary evidence to say the wealth is ill-gotten–the use of multiple instruments across several tax havens via proxies point to a strong desire for secrecy.
The latest leak is the Pandora Papers, 11.9 million confidential files obtained and analysed by the International Consortium of Investigative Journalists (ICIJ) in collaboration with hundreds of journalists worldwide. Sri Lanka featured among the top stories because businessman Thirukumar Nadesan and his wife, retired Parliamentarian Nirupama Rajapaksa, figured with some precision in the documents.
While Mr Nadesan is not a politician, unlike his spouse, he is identified in the documents as a ‘PEP’ or ‘politically exposed person’.
Among the most fascinating details in the leaked data dump is a sprawling collection of paintings owned by the offshore company Pacific Commodities Ltd (PCL) which was incorporated in Samoa. Its purpose is “investment holding” and its beneficial owner is Thirukumar Nadesan.
PCL is connected to the Pacific Trust which was originally established in February 1990. Its directors are Raffles Directors Ltd and shareholder is Raffles Nominees Ltd as a representative of Mr Nadesan. PCL controls the paintings.
The masterpieces–documents show that each them have market values of tens of thousands of dollars–include at least 11 works by Sri Lankan cubist master, George Keyt . Among them are ‘The Reigning Powers of Europe’, ‘The Royalties’, ‘Lovers Untitled (1982), ‘Sasajataka 3’, ‘Mother And Daughter (1989), ‘Seated Woman Dressing’, ‘Woman with Mirror’ and ‘Woman with Parasol’. There’s also an Andrew Nicholl water colour titled ‘Ceylon’.
A pro-forma invoice dated January 2018 showed artwork being shifted from a London-based fine art warehouse and transporter, to Geneva Free Port, a sprawling art storage complex in Switzerland. The shipper was Asiaciti Trust Singapore Pte Ltd, a financial services provider through which Mr Nadesan did all his business.
Asiaciti oversaw the setting up of the businessman’s many offshore entities (according to email communications, key events are carried out on “lucky dates”) including the Sri Nithi Trust of which he is Investment Director. It was registered in New Zealand but transferred to Cook Islands in May 2017. Till then, it was administered by AsiaTrust New Zealand Ltd (incorporated in New Zealand) with Mr Nadesan as settlor and the children as beneficiaries. It was set up for the purpose of “succession planning”.
Sri Nithi has three underlying companies: Pallene Investments (incorporated in the British Virgin Islands in 2012) which was created to own two flats at Holland Park and St. James’s Garden in London and a bank account; Concord Assets Inc, which was incorporated in 2012 in Samoa, for “investment holding” but is dormant; and Chalan Oil Exploration Ltd (incorporated in Jersey in 1993) which owns a property at Haymarket in Sydney, Australia.
Pallene Investments directors are Westco Director’s Ltd and its beneficiary is Mr Nadesan. The couple is also connected to Rosetti Ltd, registered on the Channel Island of Jersey in 1991. It is the holding company for Chalan Oil Exploration and its revenue is “by way of contracts entered by Rosetti Ltd with various foreign entities and fees received for services rendered by Rosetti Ltd”. It had, however, not made any income for an extended period of time, the papers show. It was liquidated in January 2013 after transferring its cash and investment securities to Pallene.
Meanwhile, Rosetti’s financial statement ending December 31, 2010, says that the single Hong Kong dollar share of Red Ruth Investments Limited– an entity incorporated in Hong Kong for the purpose of investment holding and wholly owned by the Rosetti– was transferred during the year to Mr Nadesan.
The papers contain details of subsequent transactions between Red Ruth and Sri Nithi and several other entities cited in this article. They also state that Red Ruth exists outside of the Sri Nithi Trust structure (with all its companies) and is owned by the UBO [ultimate beneficial owner].
This whole network pertains to just one financial services provider, Asiaciti, which was part of the Pandora Papers. The entities were used to make investments, sell or buy properties, lend to each other and other financial matters.
The papers end with transactions related to 2019 but there is activity going back to 2011 and before. The documents also show that another entity called the Nadesan Trust was first established around 1991 as a Guernsey Law trust. It was then shifted to Monaco and the Channel Islands. Its assets were said to comprise 90 percent real estate and investment portfolio.