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The Pandora gambit: Nothing but sensationalism?

Iftikhar Ahmad, a London-based lawyer thinks that the recent Pandora fiasco has been blown out of proportion by the media. According to him, non-payment of tax is a crime against humanity. However, this plethora of documents and name-churning machines make no distinction between legitimate money and proceeds of crime.

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I haven’t and have no inclination to even attempt to read the Pandora leaks but looking at what our media reports, I notice that there is more sensationalism than anything sinister.

To begin with, let’s see what is an offshore company. It’s like any other company but registered outside the country of residence. They are in Belize, Seychelles, BVI, Jersey, Isle of Man, Dubai, Hong Kong, Mauritius, Gibraltar, and in a way Switzerland, The Netherlands, and Liechtenstein.

The companies registered and incorporated there pay no tax on their profits to the country where the companies are registered and until recently the companies had no obligation to pay corporation or income tax. Now it’s not so easy and it’s no more fun to have offshore companies.

Read more: Offshore wealth of Pakistani citizens

The legal practice of forming an offshore company

Contrary to the commonly understood function of a company of trading and making profits or otherwise, buying a property, even a studio apartment, through an offshore company was tax-efficient and legal. No surprise when we find Tony Blair, former PM of the UK having properties in London through offshore companies.

So, any Pakistani trying to buy a property in the UK was advised by professional intermediaries like accountants and solicitors to buy through an offshore company as any profits emanating from an offshore company’s assets was then tax-exempt.

Therefore, all and sundry bought offshore companies off the shelf completely ready in all respects and it bought the property duly registered in the Land Registry showing the owner as of the offshore company. Almost all names of Pakistanis appearing in Pandora leaks are of those who bought real estate.

 

Having an offshore company account may not necessarily be proceeds of crime as the concept of money-laundering is also a regime introduced in recent times. Prior to this becoming a crime any Tom, Dick, and Harry could transfer any amount from anywhere in the world to a UK high street bank, without questions.

However, in the case of Pakistanis, I noticed a twist added by Pakistani journalists working with ICIJ. One name Shahnaz Sajjad having flats in London’s Knightsbridge is a glaring example of spin and twist.

Shahnaz Sajjad: A victim of spins & twists by journalists?

Shahnaz Sajjad, the daughter of Gen Habibullah Khan and sister of Gen Ali Kuli Khan, CEO of Bannu Woolen Mills, a chartered accountant by profession was the wife of Sajjad Ahmad, a Chartered Accountant of giant repute hailing from a hugely rich family of Peshawar-owing 2 flats in London.

Ever since I have known the family and the western world had not coined the phrase money laundering, they owned these flats. But linking it with Gen Ali Kuli Khan, an industrialist by inheritance owning General Tyres, is tasteless.

In my view, non-payment of tax is a crime against humanity. But this plethora of documents and name-churning machines make no distinction between legitimate money and proceeds of crime.

Read more: Pandora Papers: PM Khan assures accountability

Quaid-e-Azam once owned an upmarket property in West London. He surely had absolutely kosher income and was entitled to own anything and if he was before the Supreme Court of Pakistan to explain the money trail of his Olympia property, he would never have produced a letter from Nizam of Hyderabad.

Iftikhar Ahmad is a London-based lawyer of Pakistani origins. He was a political activist with PPP and has worked with Benazir Bhutto. He is also a war veteran, having fought in East Pakistan in 1971. The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space. 

 

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