Described as the biggest leak in history, the release of the Panama papers has created shock waves across the globe – revealing how the wealthy and elite stash their money in offshore tax havens.
In Pakistan, Prime Minister Nawaz Sharif has come under fire after his three children were named as using the Panamanian firm to store their assets offshore.
Naeem Sahoutara reports on the political storm the revelations have caused.
Pakistani media is buzzing with the disclosures made in the Panama Papers.
The leaked documents from the Panamanian law firm, Mossack Fonseca, show that hundreds of Pakistanis have opened offshore accounts in tax haven of Panama.
Among the prominent names are the prime minister’s daughter, Maryam Nawaz, and his two sons, Hussain Nawaz and Hasan Nawaz.
Last week, the parliament held a special session to discuss the issue.
Cricketer-turned-politician Imran Khan, who is the chairman of the Pakistan Tehrik-e-Insaf Party, or PTI, lambasted those named.
“They are pushing the country into debt. They are illegally shifting their wealth abroad... They themselves are involved in money laundering. Their children own properties worth billions of rupees abroad and they are not declaring the same,” Khan stated. “Are they above the law? How will they hold others accountable?”
The documents obtained by a German Newspaper, and later shared with the International Consortium of Investigative Journalists, revealed 220 Pakistani nationals employed the Mossack Fonseca firm.
The list includes politicians, business tycoons and media moguls.
But the inclusion of the prime minister’s children has drawn the most criticism.
The PM’s daughter Maryam is a member of parliament, and is seen as his political heir for the elections in 2018.
In parliament, Imran Khan demanded the family’s finances be investigated.
“There are four major allegations regarding the offshore companies of the Sharif family. These include tax evasion, money laundering, hiding their assets and making false declarations before the Election Commission. They have to answer to that,” Khan said.
The scandal has put pressure on the PM’s family to respond.
With Husain Nawaz, the eldest son, claiming the assets were moved offshore during his father’s exile in the late 1990s.
Husain has doing business in Saudi since 1994 and says his assets derive from legitimate profits.
“Saudi Arabian companies gave us loans there and our factory set-up there started earning profits. So, currently there are three properties purchased in my name in London. They include two apartments I bought myself, which is owned by a trust I established in my sister Maryam Nawaz’s name because my children were minors at that time… There are two other apartments. I also have one house, looked after by a trust, whose trust is my mother,” Hasian Nawaz stated.
But while Husain is candid about his wealth, including property he own in London’s most expensive real estate, he denies his father has any offshore assets…
Pakistan has a weak economy, and around sixty percent of Pakistanis live below the poverty line.
The revelations have angered citizens, like laborer Ahmed Khan, from Peshawar.
“Such a government should be ended and such politicians should be hanged because they are squeezing the blood of the common men. They have devastated our lives.”
The PM claims his family is being targeted for political gain.
But following widespread public outrage, he announced the formation of a judicial commission to investigate, and also clear his family’s name.
It’s not illegal to have an offshore account, but they can also be used for tax avoidance, and tax evasion, which is illegal.
Economist Nighat Bilgrami-Jaffery explains.
“The basic reason why these people invest money abroad is to avoid taxation in their own country, and then to buy property for their children for future migrations because they can migrate when they are not in power. I’m talking about the politicians. They also have the intention to stay abroad when they are not in power. We have many examples,” Nighat Bilgrami-Jaffery said.
“The other reasons the money they invest abroad is because they cannot give any reason how they earned that money. Those resources are unexplained.”
According to Pakistan’s National Accountability Bureau more than five million dollars is illegally sent abroad by the wealthy and elite.
One such example is of the Pakistani supermodel, Ayan Ali, who was arrested at Islamabad airport, while allegedly trying to smuggle half a million dollars to Dubai in March last year.
Opposition politician Imran Khan says the illegal flows need to stop.
And the Panama papers could be a defining moment for the country…
“We are at the juncture where we have no money to run the country. The National Accountability Bureau has put daily corruption in the country at 12 billion rupees,’ commented Khan. “This is my request, if we correct our system because of this crisis, then maybe Pakistan will be saved from the disaster it is heading toward.”