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A
huge trove of tax-haven data uncovered by the International Consortium of
Investigative Journalists (ICIJ) is the result of a three-year investigation by
its director, Gerard Ryle, into one of Australia's biggest frauds.
That fraud
involved a Hong Kong-based firm called Firepower International and offshore
havens. Through connections with Australian officials, the governments of
Britain, Russia, Romania and other nations were persuaded to believe Firepower
had solutions to global warming and the energy crisis. After the fraud was
discovered, Firepower's Australian operations were liquidated in 2008.
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The Australian investigation yielded one of the biggest
collections of leaked data gathered by journalists, the ICIJ said. The offshore
information totalled more than 260 gigabytes of data and more than two million
e-mails. The data originated in 10 offshore jurisdictions, including the
British Virgin Islands (BVI), Cook Islands and Singapore. It included details
of more than 122,000 offshore companies or trusts, and 130,000 records on the
people and agents who run, own, benefit from or hide behind offshore companies.
A large number of positions are held by "nominee
directors", people who, for a fee, lend their names as office holders of
companies they know little about. It is a legal device widely used in the
offshore world.
To analyse such a trove of information, ICIJ investigators
used text retrieval software able to handle vast volumes of data.
"I'm surprised they got the information, because it is
really quite protected," said John Bruce, director of operations at Hill
& Associates, a Hong Kong risk consultancy.
Beyond the nominees, who were often not the real owners of
an offshore company, offshore company records did not divulge the actual shareholders,
Bruce said. "It is very hard to track BVI companies."
It was probable that some Western governments were
supporting the ICIJ probe, said Hugo Williamson, managing director of the Risk Resolution
Group, a British risk consultancy. "There is a wider story here. There is
a concerted effort by Western governments to chase high-net-worth individuals
who avoid taxes through offshore havens."
The euro-zone debt crisis has compelled some Western
governments to try to alleviate their debt with the hidden wealth of the rich
who had avoided taxes through offshore havens, Williamson said. "The
British government is forcing offshore jurisdictions to make visible the
holdings of UK-based individuals."
Hong Kong corporate governance activist David Webb said:
"Since the global financial crisis in 2008, Western governments have been more
interested in cracking down on people who are avoiding tax in offshore havens.
There is more international co-operation than before."
However, Bruce was sceptical that governments were behind
the ICIJ investigation. It was likely to expose people close to some governments,
he said, "so it's not government-driven".
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