Panama Papers: Breaking Down One Of The Largest Document Leaks In History

Surpassing even masters such as Edward Snowden and Julian Assange, the Panama papers have proven to be one of the biggest data leaks in history. With about 11.5 million documents and 2.6 terabytes of confidential information, these papers were leaked to German newspaper Süddeutsche Zeitung from law firm Mossack Fonseca’s internal database by an anonymous source. Like all leaks of this kind, this scandal is as delicious as it is dangerous and scary, entwined in complexities that social media trends and memes aren’t always helpful in decoding. So here’s breaking down the biggest financial leak in history, and how it relates to India.
For starters, who is Mossack Fonseca?
Based out of Panama, Mossack Fonseca is a law firm that boasts of worldwide operations, with a global network of 600 people across 42 different countries. Apart from wealth management, Mossack Fonseca offers a unique service for a yearly fee: administering off-shore firms.
What kind of off-shore firms?
By helping clients set up off-shore companies that don’t run daily operations and remain dormant, as shell companies, Mossack Fonseca helps foreigners hold their financial assets in these entities, allowing them to mask their business dealings. The advantages of doing this?
First, the identities of the actual owners remain concealed. Mossack Foseca even hid the names of the real beneficiaries by offering its own executives as shareholders or directors in the off-shore firms. Second, the firms are set up in tax havens such as the Bahamas, British Virgin Islands, Seychelles, Cyprus and so on.

Is it legal for an Indian citizen to set up an off-shore company?
In February of 2004, RBI introduced the Liberalised Remittance Scheme (LRS) that allowed resident individuals in India to invest 25,000 USD abroad per year. As of now, this amount has been increased, and allows 2,50,000 USD per year to be invested acroad in shares, property, gifts, donations and so on.
While RBI’s aim was to boost trade and exports, and allow people to diversify their assets, letting them set up companies abroad was not part of the deal. While some might argue that setting up companies abroad is outlawed, but acquiring an existing company abroad is alright, this sits in a grey area. The Panama papers have revealed names of several Indians who have purchased off-shore companies in the last few years, which are arguably illegal, and some even before 2004, which was down-right outlawed. Read more about the legality behind these operations here.
Who’s on the list?
Revealing names of thousands of people across the world who have hidden their assets in off-shore companies, the Panama papers list reveals politicians, celebrities, businessmen and more, including Russian President Vladimar Putin, Pakistan’s Prime Minister Nawaz Sharif, China’s President Xi Jinping, Argentina footballer Lionel Messi and so on. Over 500 Indian names features on this list of offshore companies, foundations and trusts, along with 234 Indian passports that clients gave Mossack Fonseca during the incorporation process.
Film stars Amitabh Bachchan and Aishwarya Rai, Indiabulls owner Sameer Gehlaut and family, Apollo Group chairman Onkar Kanwar and family, and lawyer Harish Salve and family were among the hundreds of Indians listed in the Panama papers, as revealed by the Indian Express, who conducted an 8-month-long vetting of the 11.5 million documents. As The Guardian

stated, 370 reporters across 100 media organisations have verified the documents over the past year. Read more about those listed for off-shore company holdings in the Panama papers here.

 Watch the Indian Express’s video explaining the Panama papers and what they reveal below. 

You can also check out this map of all the countries and companies involved in this massive scandal below.