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The Pandora Papers: A Step-by-Step Guide to the Leak

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You might have heard about the Pandora papers in the news and wondered, “What is this new-age Pandora’s box, and what’s in it?”

So, what is it?

The Pandora Papers are a leak of about 12 million documents that expose hidden riches, tax evasion, and money laundering by some of the world’s wealthiest and most powerful people. For months, more than 600 journalists from 117 countries combed through 14 sources’ data, uncovering tales that were published this week.

The International Consortium of Investigative Journalists (ICIJ) in Washington DC received the information.

What has been uncovered?

The Pandora Papers contain 6.4 million documents, including three million photos, over a million emails, and nearly half a million spreadsheets. 

So far, the following stories have been revealed:

  • Anil Ambani, The chairman of Reliance ADA Group and his representatives own at least 18 offshore companies in Jersey, the British Virgin Islands (BVI) and Cyprus. 
  • A trust set up by Praveen Purvi, the creative director of Firestar, has been accused of defrauding Punjab National Bank (PNB) through fraudulent letters of undertaking (LOUs).
  • Niira (Nira) Radia Trident, Trust Company BVI, has been conducting her offshore transactions through London-based Sanjay Newatia, a former Credit Suisse banker.
  • The late Captain Satish Sharma, who was a close friend of the Gandhi family and a former Union Minister, had offshore entities and properties abroad, the Pandora Papers show.
  • Jackie Shroff was the prime beneficiary of a trust set up in New Zealand by his mother-in-law, records show. He also made “substantial contributions” to this trust, which had a Swiss bank account and owned an offshore company registered British Virgin Islands company.

The documents reveal how some of the world’s most prominent people, including more than 330 lawmakers from 90 nations, hide their money through secret offshore businesses.

These people, according to Lakshmi Kumar of the US think tank Global Financial Integrity, “are able to funnel and syphon money away and hide it,” typically through the use of anonymous corporations.

How big is the Pandora Papers leak?

SourcesFilesData
1411,903,6762.94 TB

How do the files break down?

DocumentsImagesEmailsSpreadsheetsOthers
6,406,1192,937,5131,205,716467,405886,923

How does Pandora compare with previous leaks?

YearDataFiles
Offshore Leaks2013260 GB2.5 million
Panama Papers20162.6 TB11.5 million
Paradise Papers20171.4 TB13.4 million
Pandora Papers20212.94 TB11.9 million

GB: Gigabyte, 1,000GB = 1TB, TB: Terabyte

____________________________________________________

Source: International Consortium of Investigative Journalists

What do we mean by ‘offshore’?

The Pandora Papers expose complicated cross-border networks of corporations, which frequently result in undisclosed money and asset ownership.

Someone may hold property in the United Kingdom, but it is owned through a network of businesses situated in other countries, or “offshore.”

These are the countries or territories off the coast of the United States where:

  • It’s simple to start a business.
  • There are restrictions that make it difficult to determine who owns a business.
  • Corporation tax is either minimal or non-existent.

Tax havens or secrecy jurisdictions are terms used to describe these locations. There is no official list of tax havens, however, the most well-known locations include British Overseas Territories like the Cayman Islands and the British Virgin Islands, as well as countries like Switzerland and Singapore. 

Is it illegal to use a tax haven?

According to the UK government, tax evasion “involves functioning within the letter, but not the spirit, of the law.” There are genuine reasons why people may want to keep money or assets in different countries, such as to protect themselves from criminal attacks or to protect themselves from unstable governments.

How easy is it to hide money offshore?

It’s as simple as forming a shell business in one of the countries or jurisdictions with high levels of secrecy. This is a firm that exists just in name, with no employees or offices, and it can be established anywhere in the world.

However, it is not free. You pay a specialist firm to set up and administer a shell company on your behalf. These companies might provide an address as well as the names of paid directors, leaving no trace of who is really behind the business.

How much money is hidden offshore?

It’s impossible to say for sure, but the ICIJ reports that estimates have varied from $5.6 trillion to $32 trillion. According to the International Monetary Fund, tax havens cost governments around the world up to $600 billion in missed taxes each year.

It is harmful to the rest of society, according to Ms Kumar: “The ability to hide money has a direct influence on your life… it affects your child’s access to education, health, and a home.”

What is the UK doing about it?

Legislation requiring property owners in the United Kingdom to reveal who they belong to has yet to be submitted to MPs. The United Kingdom has been chastised for allowing the property to be owned by anonymous foreign corporations. According to a 2019 parliamentary study, the UK system attracts “money launderers” who want to utilise the property to hide illicit funds.

It claims that when parliamentary time permits, it would establish a register of offshore businesses with UK property.

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