Panamagate: Why are offshore companies such a big deal?

Published: January 6, 2017

An entire nation anticipates that both the petitioners and the respondents will allow the proceedings to take the legal course and honour the subsequent verdict by the court.

So it has finally come to this; a new five-judge larger bench, daily hearings and two adversaries baying for each other’s blood.

Back in December, after a flurry of preliminary hearings of Panama Papers, the larger bench of the Supreme Court of Pakistan had hinted that the formation of an inquiry commission was now a real prospect. The new larger bench announced that the proceedings would be held on a daily basis, after the court’s annual winter vacations have come to an end. With the ex-Chief Justice gone, having reached superannuation in December, there has been a new bench, with the new Chief Justice recusing himself.

Last month Pakistan Tehreek-e-Insaf (PTI) had renounced any formation of the inquiry commission, indicating a boycott of its proceedings. But just a day before the hearing by the new bench, PTI has presented a 40-page document of so called “fresh evidence” and the party seems upbeat.

On the Sharif side, there has also been a complete overhaul of the legal team. Akram Sheikh, counsel for both Maryam Safdar and Hussain Sharif, has been shown the door. Maryam Safdar is now represented by Shahid Hamid, whereas Hussain Nawaz has hired the services and exuberance of Salman Akram Raja. Salman Aslam Butt has also been replaced by Makhdoom Ali Khan, on behalf of Prime Minister (PM) Nawaz Sharif. The move of bringing in a totally new legal team is largely perceived as a time buying legal maneuver.

It’s obvious, that the court looks at this case with heavy responsibility. The bench observed that the court would not wish that any aggrieved party can later claim that it was not ‘heard’ by the court. It is expected of both parties to stick to legally admissible evidence and refrain from unsavoury verbal assaults.

In April this year, leaked documents from the Mossack Fonseca, a law firm in Panama, have come to be called the Panama Papers. International Consortium of Investigative Journalists (ICIJ) journalists from around 107 media organisations in 80 countries critically analysed the documents before having them released to a surprised international audience. The said documents brought to light the existence and financial transactions of over 200,000 shell companies floated by Mossack Fonseca. The documents cited business transactions through offshore companies, owned by individuals including world leaders, sports celebrities, royalty, entertainers, business tycoons and technocrats.

Notable among those mentioned were prime ministers of Georgia, Ukraine, Iraq, Jordan , Emir of Qatar, Sudanese president, now ex-United Kingdom Prime Minister David Cameron and the deposed Icelandic prime minister. There were also relatives and associates of these figures mentioned in the leaked documents. And that is where our interest lies.

The papers revealed that both the sons of our prime minister, Hassan Nawaz and Hussain Nawaz, along with their sister Mrs Maryam Safdar, held three offshore holding companies in the British Virgin Islands. But it wasn’t just the disclosure of these offshore companies that brought the unwarranted attention to the Sharifs. It was also claimed that their companies Nescoll Limited, Nielsen Enterprises Limited and Hangon Property Holdings Limited were used to buy high end assets in London, that were not mentioned on the family’s wealth statement.

All hell broke loose in Pakistan.

The opposition jumped at it like a pack of wolves.

Led by the ever ready PTI, all the anti-Nawaz forces, including certain sections of the media, went into over drive. Allegations and accusations were thrown at will, of course without much concrete evidence. Sensationalism got the better of our political pundits, who unleashed a never ending media trial of the Sharifs. As usual, hearsay was looked as a potent replacement for an irrefutable proof. The ‘analysts’ were big on political allegations and small on legally relevant substance. PTI seized this opportunity as its last hope to dethrone the House of Sharifs, and went to the Supreme Court of Pakistan. Jamaat-e-Islami (JI) too became a petitioner. Not to mention, the one-man-party, Awami Muslim League (AML) also hopped the band wagon.

So, why are offshore companies such a big deal?

Well, realistically speaking, having one is not against the law. Anybody can own an offshore shell company, although such entities may sometimes be used for illegalities. Their most obvious use is to avoid taxes. But customers may also open offshore accounts for other reasons, many of which are entirely legal.

The case made by the petitioners has been quite simple.

They have been accusing Nawaz and his family of all the ills from money laundering to tax evasion. But providing the supporting evidence has not been easy. So far, PTI and its allies have been ridiculously short on the provision of proof. You don’t win legal cases with newspaper clippings, downloaded material and a lecture on morality to the judges. And courts don’t deliver verdicts on histrionics and verbal assaults. They demand evidence and that too irrefutable.

The rebuttal by the respondents has also been quite plain. We have done nothing wrong. But the ever changing reply from the Sharifs has not gone down well with the court. The sudden entry of a Qatari royal has also been a cause of much speculation. The court remarked that the PM did not mention Qatar in any of his speeches, and that no record regarding investment in Qatar has been shared with the court before.

It seems the Sharif family’s past has come to haunt them. Their past interviews spanning over a quarter century to both national and international media outlets, have exposed glaring contradictions pertaining to the occupancy and ownership of the said London properties.

Despite lawyers having submitted affidavits, receipts, letters, property documents and what not, a lot of blanks are yet to be filled.

In December, given the volume of documents presented and the somewhat lack of cooperation of both parties, the court was left with no option but to defer the proceedings and buy more time. No legal system can sustain vagueness, uncertainty or confusion, looming over its head. The ex-Chief Justice, in his parting remarks, referred to Nawaz Sharif as our respectable Prime Minister, but also declared him to be answerable in the Panama case. He also cited his reservations regarding Maryam’s dependency issue.

Back then, the PM’s counsel had submitted before the bench that Maryam Nawaz is not dependent on his client. He referred to the income tax returns as well as the nomination papers filed by his client in 2013 saying all details about properties were declared in them and nothing was withheld. Questions were raised regarding how the PM’s children were able to float such large sized companies as youngsters. But the most damning one was the scepticism shown toward the statements made by the PM on numerous occasions.

Now, with a new bench, whether the inquiry commission is formed or not, we as a nation must learn to exercise patience and prudence. Mudslinging, name calling and below the belt theatrics defy all the basic norms of decency. They also stand in direct violation of a sub judice matter, and amount to contempt of court.

The daily histrionics outside the Supreme Court premises has now become a routine. It is a blatant contempt of court. The hearings are underway and the warring parties simply cannot throw their opinions at free will. It seems that every politician has had a crash course in legal jurisprudence. The circus is for everyone to see.

And it’s not just the politicos. The media has also stooped to despicable levels. It is not just opinionated or biased, it is often untruthful. Sensationalism and the ratings game, has gotten the better of the rudimentary journalistic ethics. Hidden agendas and vested interests are now drawing the lines. It is yellow journalism at its best. As if the daily dose of talk shows, ad nauseam, and the 126 days of live torture showcasing the 2014 Dharna was not enough, the Panama fiasco has redefined the new depths, to which our opinion makers can fall.

An entire nation anticipates that both the petitioners and the respondents will allow the proceedings to take the legal course and honour the subsequent verdict by the court. In the larger interest of the democratic dispensation of justice, it is expected that the media will adhere to the cardinal principle of impartiality.

More power to justice.

Hasan Abidi

Hasan Abidi

The author is a seasoned freelance columnist, social worker, poet and political analyst. He tweets @hasanabidi512 twitter.com/hasanabidi512

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