The International Consortium of Investigative Journalists (ICIJ), has released what is considered the biggest data leak about World leaders’ offshore wealth.
The trove, named Pandora Papers, of more than 11.9 million confidential files shows how presidents, prime ministers, royals, elected officials — and some of their family members and closest associates — stash assets in a covert financial system with the help of firms who establish companies in secrecy jurisdictions.
Uganda’s Security Minister, Jim Muhwezi, is the only Ugandan leader named in the papers.
According to the details, Muhwezi owned and held shares in two shell companies, the documents claim.
The leaked papers allege that in February 2015, Muhwezi became one of three shareholders of the British Virgin Islands company Audley Holdings Ltd. The company’s directors authorized it to manage bank accounts in Europe.
In 2015, an Israeli businessman sued Muhwezi’s co-shareholders in a Ugandan court, disputing the transfer of shares in a similarly-named company, Audley Ltd, which owns two casinos in Uganda. The lawsuit did not name Muhwezi, and the court later ruled to stop the share transfer. Audley Holding Ltd. is the holding company of Audley Ltd. in Uganda, a company shareholder told ICIJ media partner, The Daily Monitor.
Regulators closed Audley Holdings Ltd. in 2016 for failing to pay registration fees. But in 2018, the Panamanian law firm Alcogal, which set up the company, reported Audley Holdings and its shareholders, including Muhwezi, to BVI regulators in a suspicious activity report after a database search revealed the eleven-year-old embezzlement allegations against him. Alcogal told regulators it resigned as the BVI’s company’s registered agent.
Under BVI law, firms like Alcogal must keep records about their clients for five years after the business relationship ends. It’s unclear what, if any, due diligence Alcogal conducted before accepting Muhwezi as a client in 2015.
Alcogal said that it complies with requirements where it operates and “performs enhanced due diligence on a client who is determined to be a high-risk customer, regardless of the nature of the relationship or service.â€
The papers claim Muhwezi also owned Sukari Loma Investment Holdings Ltd, created in Cyprus in 2013 through the offshore provider SFM. The company provided “financial services,†Muhwezi wrote on a signed beneficial owner statement, adding that its funds came from “salary savings†and his hotel and radio stations. It was closed in 2015.
When contacted by an ICIJ reporter, Muhwezi said, “I don’t know what you are talking about and I can’t make any reply.â€
OFFSHORE
The Pandora Papers reveal complex networks of companies that are set up across borders, often resulting in hidden ownership of money and assets.
For example, someone may have a property in Uganda, but own it via a chain of companies based in other countries, or “offshore”.
These offshore countries or territories are where:
- it’s easy to set up companies
- there are laws that make it difficult to identify owners of companies
- there is low or no corporation tax
The destinations are often called tax havens or secrecy jurisdictions. There is no definitive list of tax havens, but the most well known destinations include British Overseas Territories such as the Cayman Islands and the British Virgin Islands, as well as countries such as Switzerland and Singapore.