Thursday 23 January 2014

China's princelings using offshore havens

Update 1: it seems some people might not have liked the story in The Guardian, since its website is blocked in China, according to this source.

Update 2: the links below don't seem to be working with Internet Explorer, but I don't have a problem with Google Chrome

Update 3: I have changed the title of this posting, although BVI's are probably a tax heaven for some, I did mean "havens", not "heavens"

The Guardian published details of senior Chinese political leaders and their families using offshore accounts in the British Virgin Islands (BVI).

"More than a dozen family members of China's top political and military leaders are making use of offshore companies based in the British Virgin Islands, leaked financial documents reveal.

The brother-in-law of China's current president, Xi Jinping, as well as the son and son-in-law of former premier Wen Jiabao are among the political relations making use of the offshore havens, financial records show.

The disclosure of China's use of secretive financial structures is the latest revelation from "Offshore Secrets", a two-year reporting effort led by the International Consortium of Investigative Journalists (ICIJ), which obtained more than 200 gigabytes of leaked financial data from two companies in the British Virgin Islands, and shared the information with the Guardian and other international news outlets.

In all, the ICIJ data reveals more than 21,000 clients from mainland China and Hong Kong have made use of offshore havens in the Caribbean, adding to mounting scrutiny of the wealth and power amassed by family members of the country's inner circle.

As neither Chinese officials nor their families are required to issue public financial disclosures, citizens in the country and abroad have been left largely in the dark about the elite's use of offshore structures which can facilitate the avoidance of tax, or moving of money overseas. Between $1tn and $4tn in untraced assets have left China since 2000, according to estimates."

The detailed information can be found here.

The database also has many entries regarding Malaysia and Singapore. The list contains many VIP's and familiar companies.

Being on the list itself is not necessarily proof of any wrong doing. Neither is the absence from the list a proof of the opposite. Especially in certain global industries BVI's are often used.

For Malaysia, we often read stories like "foreigners pumping several billion into the local share market" etc. Readers should be aware that companies based in tax heavens like BVI count (as far as I know) as foreign companies.

In other words, the "foreigners" could actually be Malaysians who manage and hold their assets at these foreign places.

One prime example is Ananda Krishnan, who uses a complicated company structure, involving companies in the Jersey Islands and Curacao:

In it self there might be nothing wrong with the structures, but it will definitely make live more difficult for the authorities. 


  1. The hyperlinks for Malaysia & Singapore r inaccessible!

  2. Yes, I see what you mean, strange, yesterday they were still ok. May be has to do with the publication of The Guardian? Anyhow, best continue to try from time to time.