PAR­ADISE

Financial Mail - - COVER STORY -

Leona Helm­s­ley, the Amer­i­can real es­tate mogul who died a decade ago, was reviled for her in­fa­mous throw­away line that “only the lit­tle peo­ple pay taxes”. The re­lease this week of the Par­adise Papers — the widest leak yet of se­cret records from more than 19 tax havens, as well as those of two of the largest off­shore firms — il­lus­trates that her sen­ti­ment is per­haps more on the money than ever be­fore.

It’s a leak that has bust open the myth that if you stash your cash in Guernsey or the Ba­hamas or Mau­ri­tius, no-one will know. The largest num­ber of records emerged from Ap­pleby, a 119-yearold law firm that helps clients re­duce taxes and ob­scure as­sets.

The Par­adise Papers were ob­tained by Ger­man news­pa­per Süd­deutsche Zeitung and shared with the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists and more than 380 jour­nal­ists in 67 coun­tries, in­clud­ing am­ab­hun­gane and the Fi­nan­cial Mail in SA.

In all, 13.4m records tipped out, em­bar­rass­ing no less than US Pres­i­dent Don­ald Trump (ex­pos­ing links be­tween his com­merce sec­re­tary Wil­bur Ross and Rus­sian Pres­i­dent Vladimir Putin), Queen Elizabeth II (re­veal­ing her in­vest­ments in ex­ploita­tive pay­day loan firms) and 120 politi­cians.

The names of more than 500 South Africans or Sa-reg­is­tered com­pa­nies emerge in the Papers. They in­clude com­pa­nies that have set up op­er­a­tions in “se­crecy ju­ris­dic­tions” — such as Spar (Isle of Man), Aspen and Sab­miller (Mau­ri­tius), Illovo Sugar (Mau­ri­tius) and Lon­min (Ber­muda), as well as wealthy ex­ec­u­tives.

A num­ber of blue-chip SA fi­nan­cial in­sti­tu­tions are named too, in­clud­ing Stan­dard Bank, Lib­erty, San­lam and First Na­tional Bank.

EIn­vestec also crops up as cen­tral to an in­vest­ment which helped Shan­duka — in which deputy pres­i­dent Cyril Ramaphosa was a share­holder un­til 2014 — struc­ture an in­vest­ment in a Mozam­bi­can en­ergy deal through Mau­ri­tius.

In that case, Shan­duka used a com­pany it set up in Mau­ri­tius, Shan­duka African In­vest­ments, to in­vest $2m through a murky com­pany called Mar­i­hold One, which was red-flagged by Ap­pleby (see page 24). Though this is no ev­i­dence that Ramaphosa did any­thing wrong, it would seem un­wise for politi­cians to in­vest in coun­tries known to be tax havens, at a time when anger is ris­ing over the es­ti­mated $50bn that leaves Africa in il­licit flows an­nu­ally.

Ramaphosa’s ri­val for the ANC pres­i­dency, Nkosazana Dlaminizuma, is also named in the papers — but only be­cause, when she chaired the African Union, Ap­pleby set up a trust in Mau­ri­tius called the “Africa Against Ebola Trust”.

This would have been a for­get­table de­tail, were it not for a fe­ro­cious re­sponse by Dlamini-zuma’s spokesman Carl Niehaus. Niehaus said ref­er­ences to Dlamini-zuma in the Par­adise Papers were part of the “clear and de­lib­er­ate smear cam­paign” to “dis­play a mi­rage of the sup­posed cor­rupt­ibil­ity” of Dlamini-zuma.

“We sup­pose the good story of Africans do­ing it for them­selves in rais­ing over $15m is less juicy than ped­dling a neg­a­tive African nar­ra­tive to bring down an upright and up­stand­ing African woman,” he said.

Niehaus said that af­ter the 2014 ebola out­break in West Africa, it was “agreed that the African Union Foun­da­tion, which is based in Mau­ri­tius, would be used as a stop-gap mea­sure”.

Mau­ri­tius, an is­land of just 1.3m peo­ple, is a favoured des­ti­na­tion

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