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Coordinating ministers named in Pandora Papers
Over 330 politicians, officials worldwide named in leaked files
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wo of Indonesia’s coordinating ministers are mentioned in the latest leak of financial documents, dubbed the Pandora Papers, which revealed they had established offshore shell companies in tax havens, allegedly tying them to unreported wealth stored overseas.
Made up of 2.9 terabytes of data, the Pandora Papers have exposed the client names and private information of 14 financial firms that manage shell companies in tax haven countries.
Among them are Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan and Coordinating Economic Affairs Minister Airlangga Hartarto, both of whom were clients of Trident Trust, a financial services company that has offices in tax havens such as the British Virgin Islands and Panama.
The documents were obtained by the United States-based International Consortium of Investigative Journalists (ICIJ) from an anonymous source and then shared among more than 600 journalists in 117 countries, including Tempo, the only Indonesian media organization that has direct access to the documents.
According to documents obtained by Tempo, Airlangga owns two companies in the British Virgin Islands that are managed by Trident Trust, namely Buckley Development Corporation established in 2010 and Smart Property Holdings Limited created in 2012.
The Pandora Papers further revealed that Airlangga, who is also chairman of the Golkar Party, had cited investment purposes and insurance and trust fund management as reasons for setting up the companies.
In an interview with Tempo, Airlangga denied any knowledge of either company.
Golkar Party secretary-general Lodewijk F. Paulus declined to comment on allegations related to Airlangga, saying only that "teams from Golkar will continue to monitor the issue".
Meanwhile, Luhut was found to have held a president director position in Panama-based oil and gas company Petrocapital SA between 2007 and 2010.
Office of the Coordinating Maritime Affairs and Investment Minister spokesperson Jodi Mahardi confirmed Luhut's role in Petrocapital SA but claimed he had decided to step down in 2010.
“During bapak Luhut’s time in Petrocapital, it was not successful in securing reasonable investment projects,” Jodi told The Jakarta Post on Monday. “He decided to step back and focus on his business in Indonesia.”
The two coordinating ministers are among more than 330 politicians and public officials from over 90 countries that have been exposed in the Pandora Papers. Jordan’s King Abdullah is alleged to have used offshore accounts to spend more than US$100 million on luxury homes in the United Kingdom and the United States.
Jordan’s royal palace said in a statement that the purchase of the offshore assets had been personally financed by King Abdullah, Reuters reported.
The Pandora Papers’ documents also revealed that Czech Prime Minister Andrej Babis had allegedly purchased a $22 million estate in France through the use of shell companies in 2009.
There are legitimate reasons for individuals to establish offshore shell companies, such as for business purposes and security reasons. But the obscure structure of the shell companies has long been accused of enabling criminal activities, such as money laundering and as a tool for wealthy individuals to hide undeclared wealth from the reach of their local tax authorities.
Based on a recently published study, Indonesia is estimated to have been deprived of at least $2.47 billion in income after companies shifted more than $9.88 billion worth of profits to tax havens in 2018.
Singapore, Hong Kong, Bermuda, the Caribbean Islands and other tax havens are believed to be the main beneficiaries, followed by Switzerland and European Union tax havens, according to researchers from the University of California at Berkeley and the University of Copenhagen, who have published their findings on the website missingprofits.world.
Finance Ministry Taxation Directorate General spokesperson Neilmadrin Noor said the tax office had yet to receive any official information from the Pandora Papers leak.
“We will be open to any new information or input, and we will act in accordance with prevailing regulations,” Neilmadrin said on Monday.
