Panama Papers Leak Case: Everything you should know

Panama Papers Case: Bollywood actor Aishwarya Rai Bachchan appeared before the Enforcement Directorate (ED) on December 20, 2021 for questioning in a case related to the 2016 Panama Papers leak case.  Aishwarya Rai joined the investigation in response to the third summons from ED under the Foreign Exchange Management Act (FEMA). She had previously sought more time. 

The former Miss World was reportedly questioned for six hours and her statement was recorded. The  Enforcement Directorate is conducting an inquiry to determine all the facts related to foreign remittances under the Reserve Bank of India’s Liberalised Remittance Scheme made since 2004. 

Read more: Panama Papers – Frequently Asked Questions

What is Panama Papers Leak Case?

Panama Papers case is a massive leak of 11.5 million documents from a Panamanian law firm - Mossack Fonseca- that reveal how its clients were able to launder money, dodge sanctions and avoid tax. The leak came in news on 3 April 2016 after a German newspaper Suddeutsche Zeitung published a report on the same.

Panama's Mossack Fonseca is one of the world's most secretive offshore law firms and it is said to have  operated with impunity for decades in its efforts to help clients launder money and avoid tax.

The German newspaper reportedly got the encrypted internal documents from Mossack Fonseca from an anonymous source.  The newspaper then shared the documents with the Washington-based International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners. In total, some 107 media outlets in 78 countries investigated the data.

Who are named in Panama Papers?

The documents, dubbed as the Panama Papers, contain the names of some of the world’s richest people, politicians and celebrities. It linked at least 12 current and former heads of State nd 143 other politicians to illicit financial transactions.

The ICIJ said, names figuring in the leak included aides to Russian President Vladimir Putin, Malaysian Prime Minister Najib Razak's son Nazifuddin, family of Chinese President Xi Jinping, former Chinese Premier Li Peng's daughter Li Xiaolin, children of Pakistan's Prime Minister Nawaz Sharif, the President of Ukraine, the prime minister of Iceland, Sigmundur Gunnlaugsson and celebrities including Barcelona forward Lionel Messi.

While the law firm Mossack Fonseca termed the revelation as a crime, the Panama government vowed to vigorously cooperate with any legal probe that might be launched in the wake of the "Panama Papers" data leak. 

Panama Papers Indian Names

Among the many prominent Indian names listed in the Panama Papers expose are celebrities like Amitabh Bachchan, Aishwarya Rai, and Ajay Devgn and billionaires like Kushal Pal Singh, Vinod Adani and billionaire real estate magnate Sameer Gehlaut. In total, there are over 500 Indians associated with the offshore law firm, Mossack Fonseca.

What do the Panama Papers reveal?

Termed as the biggest leak in the history, Panama Papers reveals the set of 11.5 million documents and 2.6 terabytes of information. It provides detailed information (identities of shareholders and directors of the companies) about more than 214000 offshore companies listed in corporate service provider Mossack Fonseca. It shows countless ways being used by wealthy to exploit secretive offshore tax regimes.

The leak is larger than the US diplomatic cables released by WikiLeaks in 2010, and the secret intelligence documents given to journalists by Edward Snowden in 2013. There are 11.5m documents and 2.6 terabytes of information drawn from Mossack Fonseca’s internal database.

Impact of Panama Papers leak case

The Panama Papers leak had a huge impact on the global scenario, some of which include:

• Indian Prime Minister Narendra Modi ordered an inquiry, and subsequently the government announced that it constituted a special multi-agency group comprising officers from the investigative unit of the Central Board of Direct Taxes and its Foreign Tax and Tax Research division, the Financial Intelligence Unit and the Reserve Bank of India.

• Two days after the initial media coverage of the scandal, the Prime Minister of Iceland, Sigmundur Gunnlaugsson, resigned from his office. He resigned amid the controversy over his offshore holdings revealed in the Panama Papers leak.

• The president of the Chilean branch of Transparency International, Gonzalo Delaveau, resigned after documents from a Panamanian law firm showed he was linked to at least five offshore companies.

• France that opened a probe in the issue also added Panama to its tax havens list.