The Lankan connection

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Sunday, 17 April 2016

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The Lankan connection

By Dilrukshi Handunnetti

In the biggest information leak in history – the ‘Panama Papers’ – an investigative journalistic effort by the US- based International Consortium of Investigative Journalists (ICIJ) has made disclosures on offshore companies and tax evasion records of some of the most rich and famous people in the world, as well as companies.

Yet, in these disclosures, derived from tax records leaked from a Panamanian law firm Mossack Fonseca containing 40 years of data on more than 210,000 companies in 21 offshore jurisdictions (ranging from Panama to Hong Kong), the world has finally found the evidence how Mossack Fonseca clients managed to launder money and avoid tax.

Adding a local dimension, a list of 46 Sri Lankan names can be viewed on the ICIJ website (offshoreleaks.icij.org) where a country specific search is possible.

Following the information disclosure, an adviser to the Ministry of Megapolis and Western Development, Vidya Amarapala has resigned from his position. This comes in the wake of Patali Champika Ranawaka, the minister in charge, requesting the Financial Crimes Investigation Department (FCID) to inquire into the involvement of the advisor to an offshore company listed in the mind-blowing Panama Papers. Sources close to Amarapala said the resignation was submitted, to pave the way for an FCID inquiry. It is learned that Amarapala’s name has been linked to two entities, namely Sovereign Capital Corporation (SCC) and IWS Holdings.

Speaking to the Sunday Observer, Minister Ranawaka said that this resignation did not amount to an admission of guilt by the named party but a move to facilitate an independent inquiry, in adherence to ‘good governance’ principles of his government.

Amarapala headed the Ceylon Electricity Board (CEB) between 2010 and 2011 and served as an executive at the IWS Holdings Ltd. owned by Arthur Senanayaka during 2003- 2010. According to a recent statement, Amarapala has maintained the listed account while serving as a director of the Sovereign Capital Corporation (SCC), which has no track record of wrongdoing, the statement added.

Information on Sri Lanka

Meanwhile, the Central Bank of Sri Lanka (CBSL) is poised to obtain country specific information to identify any tax evasions by Sri Lankan companies and individuals as well as stashing away their wealth in tax havens, away from the prying eyes of the authorities.

Central Bank Governor Arjuna Mahendran said, just like other countries inquiring into links made in Panama Papaers to their own nationals, Sri Lanka too is keen to investigate the matter of Sri Lankan engagement in tax evasions and offshore companies.

“It is too premature to say anything right now. But the information placed in public domain needs to be verified, fast,” he said.

“We have got some of those papers and we are requesting further information from our counterparts,” he said, at a press briefing in Colombo last Tuesday (12).

The names of Sri Lankans in the papers are not yet clearly established. “We don’t want to jump to any conclusions as clear information is not yet available.” He insisted: “The authenticity of the documents will have to be established first.”

When asked whether around US$ 1.9 billion dollars flowed out of the country annually via illicit channels, the CB Governor said he found such figures hard to believe.

In this backdrop, it is learnt that Sri Lankan law enforcement agencies are now preparing for a data gathering exercise, before making global inquiries to unearth detailed data on Sri Lankan secret account-holders listed in the ‘Panama Papers’ journalistic exposure.

It is reliably learnt that already, contacts have been established between the national investigative agencies and the US-based investigative journalists’ consortium which recently made a global release of millions of documents of computer-based data on bank accounts and secret ‘shell’ companies by individuals across the world.

These accounts and secret commercial entities exist only in name but are recognized as a popular method of tax evasion and a cover up for non-legal financial transactions. “Sri Lankan agencies will write this week to the investigators responsible for the ‘Panama Papers,’ requesting country specific data,” a source confirmed.

The first reaction to the Panama Papers came in the form of ministerial remarks by Minister Ranawaka whose advisor has now resigned, following his name being linked to the global investigation. “It is the mandate of agencies investigating large scale corruption and offshore companies. If not immediately, the information may prove very significant in the immediate future,” the source added.

An interactive map published online indicated the existence of three Sri Lankan companies, three clients and 22 shareholders being included in the explosive ‘Panama Papers’ by the ICIJ, a project of the Center for Public Integrity in the United States.

Speaking to the Observer, Deputy Minister of State Enterprises, Eran Wickremeratne, said it was necessary to keep a keen eye on disclosures made “on the shell companies set up in the in Seychelles.” According to him, a Sri Lankan bank has opened a branch in the island in 2014 and even air links had been established in the immediate aftermath. “Its worthy of inquiry,” he said.

Some 14,000 shell companies have purportedly been incorporated in Seychelles with only about 200 actual owners being identified so far.

Meanwhile, Advisor to the Sri Lanka’s a Anti-Corruption Front, Keerthi Tennakoon said, he was aware of data relevent to Sri Lanka being now processed by the ICIJ.”This calls for a comprehensive and independent inquiry,” Tenakoon insisted.

Work continues

Meanwhile, in response to the overwhelming inquiries on the exposures made, Gerard Ryle, Director of the International Consortium of Investigative Journalists (ICIJ) told the media the “leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents.”

Breaking the silence, Mossack Fonseca too in a statement posted on its website said the law firm claims to have set up over 240,000 offshore companies for clients around the globe, denied any wrongdoing and called itself the victim of a campaign against privacy.

“We routinely resign from client engagements when ongoing due diligence and updates to sanctions lists reveal that a beneficial owner of a company for which we provide services is compromised, “it said.

While holding money in offshore companies is not illegal, the collaboration of journalists has claimed that the information could provide evidence of wealth hidden for tax evasion and money laundering.

India calls for information

Indian authorities have already sent tax queries to all the Indians whose names were included in the controversial Panama Papers.

The Panamanan law firm has helped over 500 Indians to set up offshore companies in tax havens around the world with at least 300 such addresses by now independently verified by a team of Indian investigative journalists led by Ritu Sarin, the Executive Editor (News & Investigations) at the Indian Express.

On Friday (15), formal requests were sent to some 50 people in different cities, as a first attempt to confirm their identities and acquire details on the firm, capital and financial engagements.

The second communication, according to the Indian Express, is a more detailed questionnaire seeking replies on permissions sought by the client before incorporating the offshore entity; including the mode of transferring money for account opening, details of shareholders/directors/beneficial owners of offshore entity, details of transactions, deposits, assets maintained and so on.

[Sri Lanka: Officers and master clients]

1. Ahmed Ismail Hossain
2. Akhter Mahmud
3. Aliakber Saifudeen Jeevunjee
4. Aqua –Packaging Limited
5. Arthur I. Senanayake
6. Balendra Krishan Niraj Jayasekara
7. Chandrajith Saman Kalyana Jayamaha Jayamaha Hitihamilage
8. Chandrajith Saman Kalyana Jayamaha Jayamaha Hitihamilage
9. Chandru Swamidas Jagasia
10. Christian Fernando Fuhrer
11. Daniel Ortiz
12. Dimitry De Wansa Wickramaratne
13. Duminda Mahali Weerasekare
14. Ejaz Chatoor
15. Esufally, Bilquis Imtiaz
16. Esufally, Imtiaz Abidhusen Hassanally
17. Farida Jeevunjee
18. Hasan Mahmood (Raja)
19. Imran Aliakber Jeevunjee
20. Janki Jagasia
21. Jayawardane Welathanthirige Shilanth Boteju
22. Jennifer Kathleen Senanayake
23. Kaluachchigamage Avanthi Kumara Jayatilake
24. Khandaker Moinul Ahsan (Shamim)
25. Kishore Hassaram Surtani
26. Lasitha Gamini Atygalle
27. Mohamed Ishan Gaffoor
28. Murtazaali Abidhussen Hassanaly Esufally
29. Nilan Abeywickrama
30. Niranjan Mendis
31. Niranjan Sunil Oswald Mendis
32. Omprasadham Kanapathipillai
33. Rohan Albert Ignatius Gomis
34. Sanikh Networks Limited
35. Sanjay Vijith Anthony Perera
36. Senaka Dunuwille Senanayake
37. Sharecorp Limited
38. Sharmila Wahab
39. Shyamali Champika Ediriweera
40. Somasundaram Mukunthan and Anne Christine Mukunthan
41. Surendra Ediriweera
42. Surendra Ediriweera & Shyamali Champika Ediriweera
43. Tushan & Dhammeswari
44. Tushan Harsha Mendis Wickramasinghe
45. Uduwathuwage Jagathpriya Anura Sumathipala
46. Vidya Dilruk Amarapala