Malaysiakini KiniGuide

Your KiniGuide to the Panama Papers and Malaysia in 11 questions

KiniGuide  |  Published:  |  Modified:

KINIGUIDE The mega-dump of leaked documents called the Panama Papers is hogging international headlines, with a familiar Malaysian name thrown into the mix.

But what is it exactly?

What are the Panama Papers?

A collection of 11.5 million documents from Mossack Fonseca - a Panama-based law firm which specialises in setting up offshore companies - leaked to the International Consortium of Investigative Journalists (ICIJ).

Mossack Fonseca is one of the world’s five biggest "wholesalers of offshore secrecy". It has more than more than 500 employees in 40 offices around the world.

What is ICIJ?

A network of more than 160 journalists from 65 countries, who work on various investigative projects. Malaysiakini is part of the network and helped uncover Malaysian bigwigs who had offshore accounts in an earlier leak in 2013 .

Malaysiakini is also assisting partly in the Panama Papers.

How is Malaysia implicated?

Among Malaysian entities named in the Panama Papers include Prime Minister Najib Abdul Razak's son Nazifuddin Najib. There are also documents relating to a Majlis Amanah Rakyat (Mara) subsidiary.

The 2013 leak included then minister Raja Nong Chik Zainal Abidin and former prime minister Dr Mahathir Mohamad's son Mirzan.

What is an offshore entity anyway?

It's a firm set up in a tax-free zone, which has high privacy laws, like British Virgin Island, Jersey and the Cayman Islands.

This means the transactions are virtually secret and untraceable – until a leak like the Panama Papers happens.

Is it illegal to have an offshore account?

Not exactly, but the shadowy nature of these accounts mean they can be used to move illicit money. Firms can also keep funds offshore to evade tax.

Why does this sound familiar?

Many unexplained transactions in the 1MDB money trail involved offshore entities registered in the British Virgin Islands and Cayman Islands.

Najib also received US$120 million from offshore entity Blackstone Asia Real Estate – ostensibly controlled by Prince Saud Abdulaziz Majid Al Saud, who donated the funds to Najib.

The Luxembourg investigation might uncover who Blackstone really is.

Is it just about rich people moving their cash around?

Yes and no. Investigation by ICIJ partners found links between the offshore accounts to sale of fuel and arms in the Syrian war, and a prostitution ring.

Who else has been named in the Panama Papers?

Russian president Vladimir Putin's proxies, the family of British Prime Minister David Cameron, Bollywood megastars Amitabh Bachchan and Aishwarya Rai and footballer Lionel Messi, among others.

What does Mossack Fonseca say?

It denies assisting in anything illegal. It is also looking at taking legal action over the leak.

So what happens now?

Several countries, including India and Australia, have started investigating those named for possible money laundering or tax evasion.

There were massive protests in Iceland after the country's prime minister's wife was named in the list. He tendered his resignation yesterday.

How is Malaysia responding?

No investigations have been launched for the Panama Papers or the 2013 leaks. Several ministers have said it is not illegal to keep money overseas.

Pressure might be stronger for action following the Panama Papers leak, as it comes amid corruption allegations against Najib. Najib denies wrongdoing and was cleared by the attorney-general.

 


 

This Kiniguide was prepared by Aidila Razak.

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