The sordid secrets of the shady rich and the extreme measures taken to stash their loot through a complex financial maze in offshore accounts were revealed last Sunday when the explosive findings of a six hundred strong battalion of investigative journalists went public. It took over 600 journalists of the International Consortium of Investigative Journalists [...]


Shady secrets of filthy rich fly out from Pandora’s Box

ICIJ Pandora Papers names ‘Sri Lanka power couple’

PANDORA SHOCKER: Former SLFP Minister Nirupama Rajapaksa and husband, businessman Thiru Nadesan caught in the centre of the storm

The sordid secrets of the shady rich and the extreme measures taken to stash their loot through a complex financial maze in offshore accounts were revealed last Sunday when the explosive findings of a six hundred strong battalion of investigative journalists went public.

It took over 600 journalists of the International Consortium of Investigative Journalists (ICIJ) over a year to wade through the murky labyrinth and unearth from 12 million documents and 3 terabytes of stored data, damning details of the concealed wealth of some of the richest and powerful on earth.

This trove of information had been obtained from 14 offshore service providers in various countries including the British Virgin Islands, Seychelles, Panama, Belize, Cyprus, the United Arab Emirates, Hong Kong, Singapore and Switzerland.

Blowing the lid off Pandora’s Box, as the ICIJ project is called, the Pandora Papers give a fascinating in-depth insight into the flow of money and property plus assets concealed in the shrouded offshore financial system; and demonstrate how its integral secrecy shields the wealthy and powerful from government investigations and places their parked wealth beyond the reach of their respective government’s jurisdiction.

The ICIJ’s trawl has netted Heads of States, monarchs, billionaires, businessmen, organizations and many others in what has so far been the largest haul since it released the Panama Papers in 2016.

Among the elite rich named were Jordan’s King Hussein, Russian President Vladimir Putin, Czech Prime Minister Andrej Babis, former British PM Tony Blair and Azerbaijani President Ilham Aliyev and his family who have secretly been involved in property deals in the UK worth more than £400m and stand accused of looting their own country.

THE GODDESS LAKSHMI: Classic oil painting on canvas by Raja Ravi Varma dated 1896 at Maharaja Fateh Singh Museum in Gujarat. A similar painting by Varma is alleged to have been part of Nadesan’s $4 million art collection

Nearer home, in the Indian subcontinent Pakistani Prime Minister Imran Khan was the first regional leader to announce on Monday an immediate investigation when his Government’s Water Resources Minister Moonis Elahi and Finance Minister Shaukat Tarin figured prominently in the Pandora Papers. The leaks also revealed how donors to his party, and family members of the country’s powerful military generals had moved millions of dollars of wealth through offshore companies.

Khan assured on Monday that his Government will investigate all its citizens mentioned in the Pandora Papers, and that if any wrongdoing is established, appropriate action will be taken, and, in a tweet, called on the international community to treat this grave injustice as similar to the climate change crisis. He welcomed the Pandora Papers exposing the ill-gotten wealth of elites, accumulated through tax evasion and corruption and laundered in financial havens.

India, too, declared the same day, the launch of investigations into those of its citizens named in the Pandora Papers. The Finance Ministry announced that investigation will be monitored by a multi-agency group comprising the Central Board of Direct Taxes,  Enforcement Directorate, Reserve Bank of India and Financial Intelligence Unit.

Some of the famous Indians on the list are businessmen Anil Ambani, Vinod Adani, film star Jackie Shroff, billionaire entrepreneur Kiran Mazumdar-Shaw, controversial lobbyist Nira Radia and international cricketing legend Sachin Tendulkar.

Though Lanka could not boast such a dazzling array of stars to take their curtain call from Pandora’s Box of secrets, the names of a well-known couple sufficed to ignite a political tempest. Unlike in the earlier ICIJ’s Panama Papers of 2016 which had named 60-odd Lankans using offshore tax havens to illegally conceal their questionable loot, the Pandora Papers had named a Lankan politician for the first time. Worse, the politician named had been a deputy minister in the previous Rajapaksa regime. Even worse, the person is a kinswoman of the ruling Rajapaksa clan.

Former Deputy Minister of Water Nirupama Rajapaksa is the granddaughter of Don Matthew  Rajapaksa, known as the Lion of Ruhuna, whose sudden death at the age of 49 in 1945, compelled his brother Don Alvin Rajapaksa to reluctantly step into his shoes and be elected uncontested to Don Matthew’s vacant seat in the State Council. The year 1945 also saw the birth of D. A. Rajapaksa’s second son Mahinda, and the rest is history.

Nirupama is the daughter of D. M. Rajapaksa’s youngest son George Rajapaksa who, like his father, died suddenly at the age of 49 in 1976. The SLFP member for Mulkirigala, he had been a former Minister of Health and was the Minister of Fisheries at his untimely death. Nirupama, 59, entered parliament in 2005 as MP for the Hambantota District and served as Deputy Minister of Water Supply and Drainage from 2010 to 2015 during her uncle Mahinda Rajapaksa’s second term in office.

After a spell of six years away from the public glare, she returned this week to command the headlines when the Pandora Papers described her and her husband, the well-known businessman and politically savvy Thirukumar Nadesan as the ‘Sri Lankan power couple who piled up luxury homes, artworks and cash offshore as ruling family rose high and higher.’

The ICIJ Pandora report claimed that Nirupama Rajapaksa and husband together controlled a shell company which they used to buy luxury apartments in London and Sydney and to make investments.

The report further claimed: ‘As of 2017, Rajapaksa and Nadesan’s offshore holdings, which haven’t previously been made public, had a value of about $18 million, according to an ICIJ analysis of a Nadesan trust’s financial statements. In emails to Asiaciti, a longtime adviser of Nadesan’s, put his overall wealth in 2011 at more than $160 million. The report, however, stated that ICIJ couldn’t independently verify the figure.

The ICIJ Report goes on to further claim that in May 1991, Nirupama Rajapaksa and Thiru Nadesan set up Rosetti Ltd., another shell company, on the Channel Island of Jersey to also  provide consulting services “mainly in relation to inward investment into Sri Lanka,” according to confidential documents.

The Report alleges that the couple used Rosetti to buy a luxury apartment in Sydney, near Darling Harbour and used the same shell company to buy three apartments in London, one by the Thames River which they resold a few years later for $850,000, and two, worth more than $4 million, were rented out “on a commercial basis.”

‘Later,’ the Pandora Report alleges, ‘Nadesan’s consulting company had become the owner of an art collection.” By 2014, the collection would grow to include 51 pieces with an estimated total value of more than $4 million. Some of the art, it is claimed, were stashed in a London warehouse; other works were stored in the 133 year old Geneva Freeport, which the BBC has described as ‘storehouse of the world’s greatest unseen art collection.’

According to the Pandora Papers’ leaks, one of the couple’s offshore companies, Pacific Commodities, transferred, in 2018, 31 paintings and other South Asian art pieces to the Geneva Freeport. Prior to its arrival in Geneva, Nadesan is alleged to have requested in late 2017, that six works by 19th-century Indian master Raja Ravi Varma be set aside for his personal use, according to emails between Asiaciti officers and the art-storage managers. One of them was “Goddess Lakshmi.’

These are some of the charges levelled against Nirupama Rajapaksa and husband Thirukumar Nadesan. They both declined to answer ICIJ’s questions about their trusts and companies but merely stated that their “private matters are dealt with by the couple properly with their advisers,’’ the ICIJ has said in its report.

Faced with these startling claims striking so near the family hearth, Sri Lanka, following India and Pakistan, moved in to diffuse the building heat. On Wednesday, 3 days after the Pandora Box had exploded on the Government’s doorstep, President Gotabaya Rajapaksa ordered the Bribery Commission to immediately investigate Sri Lankans involved in the Pandora Papers and required the Commission to submit its report within a month.

The Presidential order came the same day Thiru Nadesan sent a letter dated 6 October to President Gotabaya in which he declared his innocence, stating: ‘I assure Your Excellency, my wife and I are totally innocent and are guilty of no wrongdoing. In the circumstances, I humbly request Your Excellency to appoint an independent investigator, (preferably a retired appellate court Judge) to without delay investigate this matter so that my name and that of my wife would be cleared.’

The following day, the Bribery Commission summoned Thiru Nadesan to appear before it on Friday to record a statement. Mr. Nadesan duly appeared before the Commission and, after his statement had been recorded, the matter was postponed to 15 October.

The question, however, arises, whether it is within the ambit of the Bribery Commission to thoroughly probe the complex web of the international offshore financial system, whether it has the wherewithal to pierce through the entangled network’s integral secrecy and do justice to Thiru Nadesan’s assertion of innocence?

Offshore tax havens with its attendant secrecy have been specifically set up by the financial system to ensure that no government or investigative agency can lift the many veils of secrecy that shroud its operation: that is its raison d’être.

For instance, as the ICIJ Report observed, buying property through a Channel Islands company virtually ensures that the true owner remains anonymous.  The jurisdiction allows companies incorporated there to shield their true owners from public view while paying relatively little if any taxes. That is why tax havens, heavily fortified by its own set of non-intrusion laws and protected by the host country, exist: To grant complete protection from prying eyes beyond the jurisdictions of governments.

If it was anything else, the elite rich might as well park their wealth for free in any high street commercial bank and have the flimsy hope their stashed loot will be protected and remain undisclosed under normal banking secrecy laws.

The ICIJ’s Pandora Box leaks are, apart from the titillation it provides for the masses by providing them a sneak peek into the secret life and wealth of the elite filthy rich, comprise nothing more than a pack of ‘leaks’, which will hardly stand in a court of law unless supported with solid corroborative evidence.

Lanka’s Money Laundering Act, passed in 2006, is one of the rare instances in criminal law where the burden of proof is cast on the accused who is denied the presumption of innocence and is deemed guilty unless he proves otherwise.

Section 4 of the Act, for instance, states: ‘For the purposes of any proceedings under this Act, it shall be deemed until the contrary is proved, that any movable or immovable property acquired by a person has been derived or realized directly or indirectly from any unlawful activity, or are the proceeds of any unlawful activity, if such property’ cannot be accounted for by that person with reference to his known income or expenditure.

Thus, unless he can prove that his known income had enabled him to acquire the said money or property, he shall be held guilty. But the prosecution will have to first prove that the said money or property belongs to him. A claim based on a leak that some property or money  lying in some offshore company belonging  to another similar company allegedly belonging to him will not do but will be laughed out of court.

Furthermore, why the fuss about offshore tax havens when Lanka is fast becoming one herself? Only last month, on September 7, the Government enacted the euphemistically titled Finance Bill. The Act now allows those with undeclared money here and abroad to invest it here, no questions asked, without fear of prosecution even though it maybe the fruits of massive corruption.

Upon declaring it to the Inland Revenue and paying a mere one percent of the total, the money gets a clean bill of legality, with Section 10 of the Act assuring that neither the declarant nor the amount will ever be disclosed to the public but will remain secret. Section 11 guarantees total immunity from any investigation or prosecution.

The person is then free to legally invest the money in any venture he wants or even to buy up companies on the stock exchange or land. The only snag in the local ‘money haven’ scheme is that even scoundrels must have enough confidence in the nation’s economy to invest their ill-gotten money here.

The amnesty is open until March 22 next year. For those still interested, it is not too late to seek immunity wrapped in official secrecy.

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