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