The Lawyer Of Panama: Of Money And Offshore Accounts

Panama Leaks

Dollars and cents make the world go around. A saying from our younger years comes back to visit us in this time. International trade and transactions are the basis of modern economy, making the world move and run after ever larger profits.

Amidst the glamour and the suits, come the whispered conversations and offshore accounts. The meetings in private board rooms and the miles of papers being rushed about here or there, tracking the money which they talk about only with marks on a sheet.


The Panama Papers, for the uninitiated, are a set of private documents showing the transaction histories of over 200,000 accounts handled by the law firm Mossack Fonseca & Co. Dealing with a list of clients containing the biggest names in the world, these documents include heads of governments and their close family members from around the world. Accusations of financial impropriety, tax evasions and other related charges have come up against them following the leak of some 11.5 million documents being investigated by a consortium of investigative journalist from 80 countries.

The mainstay of the entire operation is the setting up of shell companies in countries which have been declared tax havens (countries with little or no corporate tax). With these companies (called shell companies because they are just a name on paper for the ease of moving money), bank accounts were set up which were used to park money outside the countries of the beneficiaries so as to not be liable to pay tax on the amount secured away.


While offshore companies are not illegal and they may be set up for perfectly legal reasons, these tactics are typically employed in tax evasion. Firms are set up in foreign countries for many legal reasons, for ease of transaction or direct relation with another firm. What makes the arrangement suspect is the number of layers and firms through which the money is routed which makes the ultimate beneficiary very obscure.

In the latest expose, 149 documents have been released which have names of prominent personalities from around the world. Highly pertinent to our government are the names of some 500 Indians which are said to be on the documents. The list includes names like Amitabh Bachchan, Aishwarya Rai Bachchan, KP Singh (CEO, DLF Ltd.), Vinod Adani (Elder brother to Indian businessman Gautam Adani) and underworld figure Iqbal Mirchi.

While the most of those named in the documents till now have denied any knowledge of the shell companies, Iceland PM Sigmundur Davíð Gunnlaugsson resigned today over his involvement with the law firm. Iceland, hailed as Europe’s success story after the 2008 economic crisis, is seeing protests where 10,000 people of the country’s 330,000 population gathered outside their parliament.

In India, the government and the RBI have started investigations into the leaks. Having promised concrete movement on the black money issue faced by the country, the Narendra Modi led government is being accused of not having done enough by way of bringing in the undeclared assets stashed in such companies in tax havens. With the NPA crisis faced by the public sector banks to the tune of over Rs. 1 lakh crore, the Panama Papers only serve to fuel the demand of transparency in financial institutions and a stronger approach to bring back the money stashed abroad.

What remains to be seen is the entire list of names of the 500 odd Indians named in those documents and the thorough and quick investigation of the financial dealings attributed to them. The question which rises out of this – in this situation of high profile political names being exposed, of whichever party or camp, will they be brought to justice or be able to shy away from the full extent of their financial mismanagement?

Ranveer Raj Bhatnagar

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The Viewspaper