Two Former HK Leaders Named in Pandora Papers

11.9 million files reveal offshore accounts of wealthy elites

The Pandora Papers have revealed a treasure trove financial records showing current and former politicians, royalty, billionaires and celebrities who have hidden their money in tax-free offshore accounts.

Released by the International Consortium of Investigative Journalists, the 11.9 million files -- even bigger than the Panama Papers -- names two former Hong Kong leaders, Leung Chung-ying and Tung Chee-hwa.

In a report by Stand News that worked with ICIJ, Tung and his family have dozens of accounts related to seven offshore companies, while Leung was listed as the owner of two British Virgin Island companies while he was Hong Kong's chief executive.

Leung was accused of corruption but later cleared

Opposition lawmakers accused Leung of corruption in 2014 in relation to a HK$50 million payment he received from an Australian engineering firm and was investigated by the Independent Commission Against Corruption, but the Department of Justice dropped the case in 2018 due to insufficient evidence.

With the publication of Stand News' report, Leung is threatening legal action against the online news outlet, warning against the "flames of irresponsible journalism". In a series of Facebook posts over seven hours, he accused Stand News of misrepresenting the facts and being either ignorant of the laws governing what the city leader must disclose about his financials or driven by ulterior motives in deciding the publish the allegations.

Through its investigation of the financial records held by the ICIJ, Stand News reported Leung conducted business through two offshore companies and sold his 30 percent stake in DTZ Japan for HK$2.3 million in 2012, the year he began his five-year term as chief executive.

Tung and his family have 72 offshore accounts

Stand News also reported Tung and his family members were tied to at least 72 accounts owned by seven offshore companies, with one having an estimated US$1 million in assets, which were used to skirt taxes in Hong Kong. Tung has yet to respond to the allegations.

The online news outlet was one of 150 media outlets around the world, and the only one from Hong Kong to work on the Pandora Papers. 

The Unmotivated HK Taxman

Hong Kong has a number of individuals and entities listed in these documents

Since the Panama Papers have revealed a number of individuals and entities from Hong Kong -- 26,000 of them or 7 percent of the total 366,000 overseas shell companies, the Hong Kong government doesn't seem to be outraged.

Development minister Paul Chan is one of them...

Some of them are even in Leung Chun-ying's own administration -- development minister Paul Chan Mo-po, and Executive Council member Bernard Chan. Others include failed chief executive contender Henry Tang Yin-yen, several lawmakers like Michael Tien Puk-sun and Paul Tse Wai-chun, the Kwok brothers, Raymond, Thomas and Walter, who run Sun Hung Kai Properties, and action star Jackie Chan.

Only accountancy lawmaker Kenneth Leung is sounding the alarm, saying the revelations are shocking and has urged the tax authorities to follow up.

But probably even more outrageous is the laid-back attitude of the Inland Revenue Department. The commissioner Wong Kuen-fai said the department would follow up, but said that not all off-shore firms are involved in tax evasion.

Would it not hurt to just check?

... so is Executive Council member Bernard Chan...

In the past five years, reports of evasion and avoidance have increased 25 percent to 1,900 cases, but the number of probes by the Inland Revenue Department fell from 1,920 to 1,800.

There are also fewer investigators working on cases, from 257 in 2001-2002 to 240 in 2014-2015, but strangely the budget for the department has jumped in the same period from HK$168.6 million to HK$213 million.

With the revelations of Hong Kong having so many off-shore companies set up by Mossack Fonseca, one would think the authorities would like to clean house and also try to get more taxes the city is entitled to.

Will Inland Revenue investigate possible cases of tax evasion?

But no, the Inland Revenue Department doesn't seem to care much, if at all... why investigate their bosses and powerful tycoons?

If one wants to find a sign of Hong Kong declining, that's one of them. Why even bother having rule of law at all if people with the means aren't enforcing them?

HK Press Freedom Under Threat?

Chong (holding microphone) talked to staff this morning about the layoffs

Today is yet another bad day for press freedom in Hong Kong.

Ming Pao abruptly fired one of its top editors as well as some other editorial staff apparently because of budget cuts, but many don't see the financial excuse as the real reason.

Executive editor Keung Kwok-yuen and others were let go, and some staffers wondered if the move was meant to punish "dissidents of editorial decisions" like Keung.

Keung Kwok-yuen was a highly respected editor at Ming Pao

A Ming Pao Staff Association spokesperson said Keung was fired by his boss, chief editor Chong Tien Siong at midnight this morning with immediate effect.

"We are extremely angry and upset about it," the spokesperson said.

Keung could not be reached for comment.

Meanwhile a Ming Pao Group spokesperson explained the company had little choice but to lay off staff, including senior personnel in business and editorial departments.

The cut in staff is a recurring refrain in Hong Kong media these days, particularly print. Earlier this month Sing Tao News Corporation announced a pay cut of up to 20 percent of its senior news executives.

During a meeting with Ming Pao staff, Chong described Keung as his "most competent aide", and that he and Keung were the best paid employees in the newsroom, and that he was prepared to go if management decided so.

Editor Kevin Lau Chun-to was also let go, back in 2014

Keung is known for covering politically sensitive issues, such as the July 1 protest march in 2003 against Article 23 where some half a million people came out to the streets, and the campaign against national education in 2012.

"We express our utmost regret that a veteran and objective journalist like Keung... was no longer [welcome] at Ming Pao," said a joint statement from the Hong Kong Journalists Association and six industry unions.

His dismissal comes after more news about Hong Kong tycoons named in the Panama Papers was reported on the front page of Ming Pao today.

Chong took over Ming Pao in 2014 and is said to be a close ally to owner, fellow Malaysian Tiong Hiew King, a pro-Beijing businessman. The staff were surprised by Chong's appointment because of his lack of local knowledge.

He replaced Kevin Lau Chun-to who was chief editor at the time; you may recall Lau was later attacked by men with choppers.

Newspaper staff held a "pens down" protest earlier this year

On Chong's first day, staff surrounded his office and asked him to sign a charter of press freedom. Reporters asked him if Ming Pao would turn into a pro-government newspaper, but he replied he didn't know because he wasn't the chief editor at the time.

Then in February last year, Chong changed the front page of the paper after midnight, from a report on confidential documents about Tiananmen in 1989 that was already approved by top-level editors -- to a story about Alibaba chief Jack Ma Yun.

He later explained the decision was made according to "the logic of news", that the report on the Tiananmen documents was unchanged and published on other pages. Chong never explained what he meant by "the logic of news"...

The union didn't accept this explanation and held a one-hour "pens down" protest.

It doesn't sound like Chong has made many friends at Ming Pao since he was brought in about two years ago. And firing yet another respected editor is not the way to win brownie points.

Is this the tipping point to lead to a mass exodus of staff? Or are economic conditions such that people don't have much choice, but to stay because they at least have a job?

Tough times.

Bagging a Military Tiger

Guo Boxiong is the highest military official to date to be charged for graft

Looks like Chinese President Xi Jinping has caught another "tiger" in his anti-corruption campaign. This time it's retired military chief of the People's Liberation Army, Guo Boxiong, 74, charged with taking bribes worth 80 million yuan.

He has apparently "confessed unsparingly" to his wrongdoings. Guo retired in 2013 and was under investigation last year, and expelled from the Party in July.

Apparently 80 million yuan is only a fraction of the amount Guo actually received, as prosecutors didn't want to play this up, which seems strange, but all may be revealed later.

Xi's relatives have been named in the Panama Papers

Previously Guo was considered the most powerful professional soldier in former president Hu Jintao's two terms. As the former vice chairman of the Central Military Commission, Guo was in charge of the day-to-day operations of the world's largest army for a decade.

He had a powerbase in the Lanzhou Military Command, the largest of the seven commands that made up the PLA before the system was overhauled this year.

The command oversaw five far-western provinces and regions, including Xinjiang.

While Guo's case is likely to be held in a closed-door military court, state media will probably have a field day revealing details of the case afterwards to justify why this tiger was caught.

Li Peng's daughter, Li Xiaolin apparently has shell companies

It seems like there is a bottomless pit of people to catch, though with the release of the Panama Papers that point out Xi's relatives, in particular his brother-in-law Deng Jiagui, has used shell companies to hide wealth.

Li Xiaolin, former premier Li Peng's daughter is also named in the documents, along with eight former and current members of China's Politburo.

But of course, this kind of news was conveniently rubbed out on the mainland, and when asked by foreign reporters about this, Hong Lei, the official spokesperson said: "For such groundless accusations I have no comment."

The Chinese equivalent of, "Nothing to see here folks, move along!"