Tuesday, September 2, 2014   

Inquiry exposes offshore tax havens of relatives of Xi Jinping and Wen Jiabao
(01-22 10:55)

Relatives of top leaders including President Xi Jinping and former premier Wen Jiabao have used offshore tax havens to hide their wealth, according to a mammoth investigation released Wednesday.
The International Consortium of Investigative Journalists, citing information culled from 2.5 million leaked documents, said that Xi's brother-in-law and Wen's son and son-in-law were among those with offshore holdings, AFP reports.
Offshore entities can be legal and there was no evidence that the politicians were aware of their relatives' actions.
The release came days after Wen reportedly penned a letter to a Hong Kong columnist proclaiming his “innocence'' over previous claims that his family amassed huge wealth during his decade in power.
The ICIJ cited nearly 22,000 offshore clients from mainland China and Hong Kong, including relatives of former president Hu Jintao, former premier Li Peng and late leader Deng Xiaoping.
Also included were members of National People's Congress, heads of state-owned enterprises and some of the wealthiest, including real estate mogul Zhang Xin; Pony Ma and Zhang Zhidong, co-founders of Tencent; and Yang Huiyan, China's richest woman.
None of them commented to the ICIJ.
The confidential files leaked to the organization also include the names of 16,000 clients from Taiwan.
Ninety percent of the mainland Chinese clients set up offshore entities in the British Virgin Islands, often with the help of Western firms such as UBS and PricewaterhouseCoopers, the investigation said. Seven percent were established in Samoa, and three percent in other areas.
The British Virgin Islands was the destination of choice for Xi's brother-in-law Deng Jiagui, a wealthy real estate developer and investor who married Xi's older sister in 1996. According to the report, Deng owns a 50 percent stake in a BVI-based company named Excellence Effort Property Development.
While such offshore trusts and companies “may not be strictly illegal,’’ they are often linked to “conflict of interest and covert use of government power,’’ Minxin Pei, a political science professor at Claremont McKenna College in California, told the ICIJ.
The ICIJ website was blocked within China today.
In November, the New York Times found that US bank JPMorgan hired a daughter of Wen as a consultant, part of a broader strategy that the newspaper said was aimed at accumulating influence in China by employing relatives of the nation's leaders.
The ICIJ said it collaborated with more than 50 partner organizations in sifting through the data, including Britain's The Guardian, Le Monde in France and Hong Kong's Ming Pao newspaper.
One of the partners, a mainland Chinese news organization, withdrew in November after “authorities had warned it not to publish anything about the material,’’ the report said.
   
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