Top Chinese execs in Panama papers

A man walks past the nationalistic tabloid Global Times’ editorial on “Panama reports” displayed on a newspaper board in Beijing, Tuesday, April 5, 2016. China’s Foreign Ministry on Tuesday denounced as “groundless” reports based on documents leaked from a Panama-based law firm that name relatives of current and retired Chinese politicians, including President Xi Jinping, as owning offshore companies. The Global Times’ editorial said an unidentified “powerful force” was behind the document leak. It said the main targets were opponents of the West, especially Russian President Vladimir Putin. (AP Photo/Andy Wong)

BEIJING—At least eight current or former members of China’s Politburo Standing Committee, the ruling party’s most powerful body, have been linked to offshore companies, according to the International Consortium of Investigative Journalists (ICIJ).

Among those named in the “Panama Papers” are close associates of Russian leader Vladimir Putin and Chinese President Xi Jinping’s brother-in-law, who was previously identified in a New York Times investigation of the wealth accumulated by Xi’s family.

Offshore companies are not illegal and can be used for legitimate business needs. But they commonly feature in corruption cases, when they are used to secretly move ill-gotten gains abroad.

Corrupt Chinese officials have moved more than $120 billion overseas, according to a 2011 report by the People’s Bank of China.

A state-run Chinese newspaper alleged on Tuesday that hostile Western forces were behind the Panama Papers, as media avoided reporting revelations about Communist leaders and it emerged that the law firm involved has eight offices in the country. (See related story in The World, Page A19.)

The scandal erupted on Sunday when media groups began revealing the results of a yearlong investigation of a trove of 11.5 million documents from Panamanian law firm Mossack Fonseca, which specializes in creating offshore shell companies.

8 offices in China

Mossack Fonseca has offices in eight Chinese cities, including Hong Kong, its website showed on Tuesday, more than any other country.

Under President Xi Jinping, Beijing has launched a much-publicized anticorruption drive but has not instituted systemic reforms such as public declarations of assets.

Chinese media have largely avoided reporting on the leaks and social media have been scrubbed of references to them, with foreign news broadcasters such as the BBC blacked out when they report on the issue.

As well as Xi’s brother-in-law, the documents also contained the names of family members of two current Politburo Standing Committee members, Zhang Gaoli and Liu Yunshan, reported the BBC, which took part in the investigation.

Deng Jiagui

The leaked record included details of Effort Property Development, a British Virgin Island company 50-percent owned by Deng Jiagui, husband of Xi’s older sister Qi Qiaoqiao.

Deng is a multimillionaire real estate developer whose star rose after marrying Xi’s sister. He also invests in metals used in cellphones and other electronics, and previously engaged in tobacco trade in Yunnan province.

The other half of the company, records show, was owned by another British Virgin Island company belonging to Li Wa and Li Xiaoping, property tycoons who bagged in July a $2-billion bid to purchase commercial real estate in Shenzhen.

22,000 from China

According to the ICIJ report, some 22,000 offshore clients with addresses in mainland China and Hong Kong, including at least 15 of China’s richest, members of the National People’s Congress and executives from state-owned companies involved in corruption scandal, appeared in the documents.

“Chinese officials aren’t required to disclose their assets publicly and until now citizens have remained largely in the dark about the parallel economy that can allow the powerful and well-connected to avoid taxes and keep their dealings secret,” the report said.

ICIJ noted that between $1 trillion and $4 trillion in untraceable assets had left China since 2000.

Xi has led a high-profile crackdown on corruption since taking over as the leader of the ruling Communist Party in 2012 and as president in 2013.

In his relentless campaign against deep-rooted corruption, Xi vowed to go after powerful “tigers” as well as lowly “flies.”

However, a Bloomberg investigative report in 2012 showed his extended family’s wealth and business interests in minerals and real estate, among others. But no assets were directly traced to Xi, his wife or daughter.

Politically sensitive

“Top-level corruption is a politically sensitive issue in China as the country’s economy cools and its wealth gap continues to widen,” ICIJ said.

“The country’s leadership has cracked down on journalists who have exposed the hidden wealth of top officials and their families as well as citizens who have demanded that government officials disclose their personal assets,” ICIJ added.

Xi is a “princeling” whose father was a revolutionary veteran and among the founding fathers of the Communist Party. He is viewed as pro-business and anti-corruption.

Chinese journalists, meanwhile, were ordered to delete “all content related to the  ‘Panama Papers’ leak case,” according to instructions seen by Agence France-Presse.

Users on microblogging website Weibo tried to circumvent restrictions by circulating pictures of Chinese-language articles describing the allegations.

An editorial in the Global Times, a newspaper with close links to the ruling Communist Party, implied the leaks were part of a “disinformation” campaign by Western forces.

It did not mention any of the Chinese revelations, focusing instead on the allegations involving Putin as did the Shanghai Daily, which is linked to the government of the commercial hub.

“The documents revealed do have basic political targets,” the Global Times said, adding that “Washington has demonstrated particular influence” in previous leaks of sensitive information to the media.

 ‘Strike a blow’

Such actions were “a new means for the ideology-allied Western nations to strike a blow to non-Western political elites and key organizations,” it added.

Asked whether China would investigate those named in the reports, foreign ministry spokesperson Hong Lei said: “For such groundless accusations, I have no comment.”

Britain’s Guardian newspaper said an internal Mossack Fonseca survey found the biggest proportion of its offshore company owners came from mainland China, followed by Hong Kong. Reports from AFP and Inquirer Research