Malaysiakini reported that according to the documents, which were sighted by them, the companies and trusts held by Daim’s children, wife or known business associates jointly were worth at least £25 million (about RM141 million)
ILLICIT financial flows from Malaysia have been growing rapidly for over a decade. By encouraging Malaysian corporations to invest abroad, “legitimate outflows” have also been growing rapidly with financial liberalisation.
It is generally presumed that illicit financial flows are related to tax evasion and corruption. Many international financial centres are involved in intense competition to attract customers by offering lower tax rates and banking secrecy. This has, in turn, forced many governments to lower direct taxes, not only on income, but especially on wealth.
With the official ambition for Malaysia to become another global financial centre in the face of premature deindustrialisation, the authorities have been promoting financial liberalisation, exposing the country to greater macro-financial risk.
Such financial flows are largely handled by financial service providers, accounting firms, law offices, and companies with transnational activities, often involving investments in real estate and other assets abroad worth billions. Besides governments enabling facilities and regulations, such firms and shell companies have been helping to accelerate these trends.
Illicit financial flows
A Global Financial Integrity (GFI) report has estimated that Malaysia lost up to about US$431 billion (RM1.8 trillion) in illicit outflows between 2005 and 2014. The Washington DC based think tank estimated illicit financial outflows from Malaysia at around 6-10% of the value of Malaysia’s trade of US$443.2 billion for the year 2014, i.e. between US$26.6 billion and US$44.3 billion.
Malaysia was fifth among all countries for illicit capital flight, after China, Russia, Mexico and India, but took first spot on a per capita basis. Malaysia accounted for around 6% of total illicit flows out of all developing countries.
In 2014, Malaysia’s illicit financial outflows were between 6-10% of its total trade while such inflows were 7-13% of the country’s total trade of US$443.21 billion. About 87% of illicit financial outflows during 2005-2014 was attributed to fraudulent “trade mis-invoicing”.
Politicians among 1,500 who own offshore companies
According to Malaysiakini , Top Malaysian politicians, their family members and well-heeled associates are among those owning secretive offshore companies in Singapore and the British Virgin Islands, according to an explosive cache of leaked documents.
They include former prime minister Dr Mahathir Mohamad’s son Mirzan, Federal Territories and Urban Well-being Minister Raja Nong Chik Zainal Abidin and Michael Chia, the alleged ‘bagman’ for Sabah Chief Minister Musa Aman.
The files, which were obtained by Washington-based International Confederation of Investigative Journalists (ICIJ) and examined by Malaysiakini , show more than 1,500 Malaysians owning offshore companies in Singapore – dubbed as the new Switzerland – as well as the British Virgin Islands (BVI), an international tax haven.
The ICIJ list comprises a curious mix of Forbes-listed tycoons, parliamentarians, retired politicians, civil servants and their spouses, members of royal families, famous and infamous businesspeople, underworld kingpins and even former beauty queens.
“Years of experience with businesses and governments in the developing world have taught us that the decision to bring illicit flows into a particular developing country often marks only the first phase of a strategy to subsequently move funds out of the country. Together, illicit inflows and outflows sap the crucial financial resources needed to reach the Sustainable Development Goals,” he added, referring to the United Nations’ goals to end poverty and to protect the planet.
According to the GFI report, illicit financial inflows into Malaysia were estimated at between 8 and 13 per cent of the US$3.6 trillion total trade from 2005 to 2014, which translated to between about US$287 billion and US$466 billion.
In 2014, the last year which comprehensive data was available, illicit financial outflows from Malaysia were estimated at between 6 and 10 per cent of total trade of about US$443.2 billion, or between about US$26.6 billion and US$44.3 billion.
Illicit financial inflows were estimated at between 7 and 13 per cent of total trade that year, or between about US$31 billion and US$57.6 billion.
According to the study on illegal financial flows from developing and emerging economies, an average of 87 per cent of illicit financial outflows over the 2005-2014 period were due to the fraudulent misinvoicing of trade.
“Total illicit financial flows (outflows plus inflows) grew at an average rate of between 8.5 percent and 10.1 per cent a year over the ten-year period.
“In 2014, outflows are estimated to have ranged between $620 billion and $970 billion, while inflows ranged between $1.4 trillion and $2.5 trillion,” said the GFI report.
GFI recommended that governments establish public registries of verified beneficial ownership information on all legal entities and said all banks should know the true beneficial owners of any account.
Raja Nong Chik
According to the leaked documents, Raja Nong Chik, who is Lembah Pantai Umno chief, is a prominent shareholder and director of RZA International Corporation, a British Virgin Islands entity incorporated on Aug 21, 2007, through Singapore.
The company is a mirror of Malaysian entity Kumpulan RZA Sdn Bhd, a 1979-founded company dealing in real estate and equities investment.
Raja Nong Chik set up the offshore entity with his father, Raja Zainal Abidin Raja Tachik, a number of his sisters and brothers as well as other family members. Most of them are also shareholders and directors of Kumpulan RZA Sdn Bhd.
Prior to his senatorship, Raja Nong Chik was a corporate figure who founded and managed an engineering firm for 20 years.
Contacted by Malaysiakini , the minister confirmed that RZA International was set up by his father, who will turn 96 this year, “for the purpose of holding legitimate offshore investments for the family”.
However, the minister did not elaborate on the offshore investments made by his family through the company. He added that RZA International was de-registered in 2009.
“The company was not used to obscure activities of Kumpulan RZA Sdn Bhd, and neither was it used to circumvent taxes or hide transactions overseas,” Raja Nong Chik said in an email to Malaysiakini .
Mirzan Mahathir, the eldest son of Mahathir, is also among those the ICIJ list as director and shareholder of three off-shore companies.
Mirzan’s major commercial vehicle in Malaysia is Crescent Capital Sdn Bhd, an investment holding and independent strategic and financial advisory firm. He is the company’s chairperson and chief executive officer.
Forbes-listed entrepreneur, Mirzan holds a non-executive director position in Philippines-based San Miguel group, which has raised eyebrows in Muslim-majority Malaysia, as beer brewery is a core businesses of San Miguel.
One of Mirzan’s offshore entities is called Crescent Energy Ltd, a Labuan offshore company incorporated on Dec 16, 2003, originally named Mainline Ltd and with an authorised share capital of US$12,000 (RM37,000).
Mirzan became a director and main shareholder six days later and the company was renamed Crescent Energy on May 16, 2008.
Another Labuan offshore company, Utara Capital Ltd, in which Mirzan is named as sole shareholder and director, was incorporated on Aug 19, 1997, with an authorised share capital of US$15,000.
The third company, Al Sadd Investments Pte Ltd. was also a Labuan offshore company. It was established on May 14, 2009, with an authorised share capital of US$12,000. Mirzan is listed as the sole shareholder and director of Al Sadd Investments.
Malaysiakini has approached Mirzan’s office for his comments on these offshore companies, but his aide said he was unable to respond on the matter as he was out of town.
Musa Aman – The Sabah ‘bagman’
Another prominent personality on the list is Chia Tien Foh, who is better known as Michael Chia – the shadowy business tycoon allegedly linked to Sabah Chief Minister Musa Aman.
Chia, too, has three offshore companies in which he is listed as either as director or shareholder. One of them was CTF International Ltd , with ‘CTF’ seen as the initials of Chia’s full name. It was incorporated on April 18, 2006, in the British Virgin Islands.
CTF International gained notoriety when it was named by whistleblower website Sarawak Report of being a conduit in channelling millions of ringgit to a Hong Kong account allegedly linked to Musa.
However, Musa ( left ), has denied any business ties with Chia ( right ).
CTF was de-registered in 2008. The other two offshore companies owned by Chia are Ravenswood Development Ltd and Ark Capital Technologies Ltd.
In addition, Chia’s wife Yap Loo Mien and another woman, who is alleged to be his mistress, Yap Siaw Lin, also appear on the list as key shareholders in three separate British Virgin Islands entities.
Loo Mien owned two companies – Perfect Minds Incorporated and StarWater Corporation – while Siaw Lin owned Splendor Success Worldwide Ltd.
Malaysiakini contacted Chia through the address stated in his company registration documents for comments, but there has been no response.
Sons of top Malaysian politicians listed in Panama Papers
According to Malaysiakini , Najib Abdul Razak’s son Nazifuddin Najib caught flak after he was exposed by the International Consortium of Investigative Journalists (ICIJ) as having an offshore account in the British Virgin Islands. But he is not the only Malaysian politician’s son on the list.
A check by Malaysiakini on the records from Panama law firm Mossack Fonseca that was leaked to the ICIJ, showed the sons of Foreign Minister Anifah Aman, former prime minister Dr Mahathir Mohamad and former deputy prime minister Muhyiddin Yassin on the list as well.
Mossack Fonseca is a law firm that provides services for the setting up of entities in tax havens where privacy laws are so stringent that the accounts established are virtually untraceable.
Documents leaked from Mossack Fonseca are now referred to as the ‘Panama Papers’.
While offshore accounts raise questions of tax evasion, it does not necessarily indicate that illegal activities were committed using these accounts, nor is it illegal to help set up or own offshore firms.
Muhyiddin Son – Fakhri Yassin Mahiaddin
Muhyiddin’s eldest son Fakhri Yassin is linked to two offshore entities, both set up in the British Virgin Islands, Malaysiakini’s checks showed.
Now head of property development firm Thriven, Fakhri set up Akila Way Limited BVI on March 11, 2004, when he was 28.
This was five years after he started work as an investment analyst at Hwang DBS – his first job after graduating with a business economics degree from the University of London.
Akila Way was set up through WBC Limited, a secretarial service firm based in Wan Chai, Hong Kong, which provides services, including addresses for setting up firms overseas.
Fakhri looked towards Panama again 10 years later, setting up Farsight Plan Investments Ltd on June 4, 2011.
There is little information on what he had used these two offshore firms for, or whether the companies are linked to Fakhri’s purchase of a majority stake in Mulpha Land for RM2 million, cash, in March 2015.
Mulpha Land was renamed Thriven, and the 40-year-old father of two was then appointed executive chairperson of the public-listed firm.
Fakhri owns 33.86 percent of Thriven and is director of Singapore-based Health Management International’s two Malaysian hospitals (Mahkota Medical Centre and Regency Specialist Hospital).
He is also director of Eden Inc Bhd, a public-listed catering firm founded by his father-in-law.
Malaysiakini contacted Fakhri for his comment, via Thriven and through his father’s press secretary. He did not respond.
Mahathir Son – Mirzan Mahathir
This is not the first time the eldest son of Mahathir has been reported as owning an offshore entity.
In 2013, Malaysiakini reported that an offshore leak revealed that Mirzan he owned Crescent Energy Ltd, Utara Capital Ltd and Al Saad Investments Pte Ltd, all based in Labuan.
In the Panama Papers, Mirzan, who was briefly a director of Philippines’ San Miguel Corp until April 2010, is listed as having registered a firm in the British Virgin Islands on March 8, 2002.
However, the firm – Sergio International Ltd – was deemed inactive on Nov 1, 2006, and struck off that year.
Mirzan, who holds an MBA from top business school Wharton, is now CEO of Crescent Capital, an investment holding and financial advisory company.
‘All very strange’
Malaysiakini contacted Mirzan via Crescent Capital, where someone who identified herself as a director in the company replied on his behalf.
“We can confirm definitely and categorically that Mirzan is not involved nor linked to Sergio International Ltd nor is the offshore entity related to the Crescent Group of Companies.
“I am interested to know how Mirzan was listed as a director/shareholder of Sergio when he did not give his consent,” the director said.
The director, who declined to be named, claimed that Crescent did not even know of Sergio’s existence until it was contacted by Malaysiakini.
However, she revealed that Mirzan informed her that the other two listed shareholders of Sergio did approach him between the years 2000 and 2002 to start a landscape business.
“But we do not have any records of this landscape business – whether it materialised or not, we do not know. All very strange,” she said.
Anifah Aman Son – Ahmad Zachry Anifah
The youngest of the four politicians’ sons whose names appeared in the Panama Papers is Ahmad Zachry, the son of Foreign Minister and Sabah Umno strongman Anifah Aman.
The 32-year-old set up Green Energy Management Solutions Ltd in the British Virgin Islands on May 13, 2010, with one Pang Su Yen of Kuala Lumpur.
Zachry’s address listed in the registration documents of the firm is a post office box in Beaufort, Sabah. The firm was shut down, due to inactivity, in 2013.
There is scant information about Zachry in the public domain, except that he is the owner of Powersport Events Sdn Bhd.
At 24, Zachry and his firm Powersport Events organised the powerboat race, the F2000 World Race in Kota Kinabalu, Sabah.
Two years later, Zachry was mentioned as owning 0.9 percent of plastics manufacturer SLP Resources. His brother Ahmad Firdauss also owned a similar chunk. This is the same year the offshore firm was set up.
Pandora Papers shed light on offshore assets linked to Daim, who insists nothing shady about them
The Pandora Papers — documents obtained by the International Consortium of Investigative Journalists (ICIJ) on tax havens preferred by the rich and powerful — have shed some light on business associates of former finance minister Tun Daim Zainuddin.
Malaysiakini reported that according to the documents, which were sighted by them, the companies and trusts held by Daim’s children, wife or known business associates jointly were worth at least £25 million (about RM141 million).
Daim’s sons, Muhammed Amir Zainuddin Daim and Muhammed Amin Zainuddin Daim were named owners of a British Virgin Islands (BVI) firm Newton Invest & Finance Limited (BVI) in 2007 when they were nine and 12 respectively.
By 2017, when the brothers were in their early 20s, they were owners of several offshore firms set up in tax havens, including Splendid International Ltd (BVI) which held London properties worth £12 million (about RM65 million at 2017 exchange rates).
Besides the two BVI firms, the brothers and their mother are also shareholders in several other offshore companies which hold properties in London.
Meanwhile, the documents also mentioned Josephine Premla Sevaretnam, a former lawyer and deputy public prosecutor who served alongside Daim in the service before holding key positions in his various ventures which includes the Swiss bank ICB Banking Group, in which Daim owns 74.4 per cent when it was listed on the London Alternative Investment Market in 2007.
Josephine was also listed as Newton Invest & Finance Limited (BVI) and Splendid International Ltd’s (BVI) business manager, based in Bryanston Square, London.
Daim’s daughter Aslinda Daim-Pan, who took on her husband’s surname, is also a director of the British company 8 Bryanston Square Freehold Limited, according to the UK’s Companies House.
In a reply to Malaysiakini, Daim called out what he believes is the news portal’s “unending obsession” with him.
He said while not all the trusts listed belonged to him, but all his dealings are legitimate and further stated that trusts are part of “estate planning” as he has retired from business.
As such, he contended that the reporting, which implies wrongdoing by innuendo and speculation, is “unprofessional” and an attempt to discredit him.
The former minister also said he has always paid taxes due for all investments and properties in any jurisdiction and that he was a “successful and wealthy” businessperson in his own right.
“I have been in business since the 1960s. It has been more than 60 years, a half-century since.
“I think some recognition should be given to a Malaysian who has successfully carried the flag for Malaysian businesses here and worldwide,” he was reported as saying.
The Pandora Papers is the largest trove of leaked offshore data in history with documents coming from offshore service providers operating in Anguilla, Belize, Singapore, Switzerland, Panama, Barbados, Cyprus, Dubai, the Bahamas, the British Virgin Islands, Seychelles and Vietnam.
The files were leaked to the ICIJ, which has not revealed its source. The ICIJ gave 600 journalists around the world remote access to the leaked data.
Source : Malay Mail
‘Pandora Papers’ expose leaders’ offshore millions
Pandora Papers: An offshore data tsunami
The Pandora Papers’s 11.9 million records arrived from 14 different offshore services firms in a jumble of files and formats – even ink-on-paper – presenting a massive data-management challenge
A 2.94 terabyte data trove exposes the offshore secrets of wealthy elites from more than 200 countries and territories. These are people who use tax and secrecy havens to buy property and hide assets; many avoid taxes and worse. They include more than 330 politicians and 130 Forbes billionaires, as well as celebrities, fraudsters, drug dealers, royal family members and leaders of religious groups around the world.
The International Consortium of Investigative Journalists spent more than a year structuring, researching and analyzing the more than 11.9 million records in the Pandora Papers leak. The task involved three main elements: journalists, technology and time.
What is the Pandora Papers?
The Pandora Papers investigation is the world’s largest-ever journalistic collaboration, involving more than 600 journalists from 150 media outlets in 117 countries.
The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low- or no-tax jurisdictions. The entities enable owners to conceal their identities from the public and sometimes from regulators. Often, the providers help them open bank accounts in countries with light financial regulation.
The 2.94 terabytes of data, leaked to ICIJ and shared with media partners around the world, arrived in various formats: as documents, images, emails, spreadsheets, and more.
The records include an unprecedented amount of information on so-called beneficial owners of entities registered in the British Virgin Islands, Seychelles, Hong Kong, Belize, Panama, South Dakota and other secrecy jurisdictions. They also contain information on the shareholders, directors and officers. In addition to the rich, the famous and the infamous, those exposed by the leak include people who don’t represent a public interest and who don’t appear in our reporting, such as small business owners, doctors and other, usually affluent, individuals away from the public spotlight.
While some of the files date to the 1970s, most of those reviewed by ICIJ were created between 1996 and 2020. They cover a wide range of matters: the creation of shell companies, foundations and trusts; the use of such entities to purchase real estate, yachts, jets and life insurance; their use to make investments and to move money between bank accounts; estate planning and other inheritance issues; and the avoidance of taxes through complex financial schemes. Some documents are tied to financial crimes, including money laundering.
What’s in the Pandora Papers?
The more than 330 politicians exposed by the leak were from more than 90 countries and territories. They used entities in secrecy jurisdictions to buy real estate, hold money in trust, own other companies and other assets, sometimes anonymously.
The Pandora Papers investigation also reveals how banks and law firms work closely with offshore service providers to design complex corporate structures. The files show that providers don’t always know their customers, despite their legal obligation to take care not to do business with people who engage in questionable dealings.
The investigation also reports on how U.S. trust providers have taken advantage of some states’ laws that promote secrecy and help wealthy overseas clients hide wealth to avoid taxes in their home countries.
What form did the data come in?
The 11.9 million-plus records were largely unstructured. More than half of the files (6.4 million) were text documents, including more than 4 million PDFs, some of which ran to more than 10,000-pages. The documents included passports, bank statements, tax declarations, company incorporation records, real estate contracts and due diligence questionnaires. There were also more than 4.1 million images and emails in the leak.
Spreadsheets made up 4% of the documents, or more than 467,000. The records also included slide shows and audio and video files.
What’s different about this leak from others we’ve heard about?
The Pandora Papers information – the 2.94 terabytes in more than 11.9 million records – comes from 14 providers that offer services in at least 38 jurisdictions. The 2016 Panama Papers investigation was based on 2.6 terabytes of data in 11.5 million documents from a single provider, the now-defunct Mossack Fonseca law firm. The 2017 Paradise Papers investigation was based on a leak of 1.4 terabytes in more than 13.4 million files from one offshore law firm, Appleby, as well as Asiaciti Trust, a Singapore-based provider, and government corporate registries in 19 secrecy jurisdictions.
The Pandora Papers presented a new challenge because the 14 providers had different ways of presenting and organizing information. Some organized documents by client, some by various offices, and others had no apparent system at all. A single document sometimes contained years’ worth of emails and attachments. Some providers digitized their records and structured them in spreadsheets; others kept paper files that were scanned. Some PDFs contained spreadsheets that had to be reconstructed into spreadsheets. The documents arrived in English, Spanish, Russian, French, Arabic, Korean and other languages, requiring extensive coordination among ICIJ partners.
The Pandora Papers gathered information on more than 27,000 companies and 29,000 so-called ultimate beneficial owners from 11 of the providers, or more than twice the number of beneficial owners identified in the Panama Papers.
The Pandora Papers connected offshore activity to more than twice as many politicians and public officials as did the Panama Papers. And the Pandora Papers’ more than 330 politicians and public officials, from more than 90 countries and territories , included 35 current and former country leaders.
Source : IICJ