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Gordhan issues warning for South Africans linked to Panama papers

Cape Town - South Africans mentioned in the Panamanian leak will be investigated by the relevant agencies to ensure they have complied with the law.

Finance Minister Pravin Gordhan said in a statement on Tuesday that he noted reports on the clients of a Panamanian legal firm and certain South Africans that may be linked to offshore bank accounts.

“The ministry would like to point out the relevant agencies (e.g. Sars, FIC, Sarb) always investigate such reports to ensure that those that have such links have complied with the law,” he said in a statement.

The Panama Papers is a groundbreaking probe by the Consortium of Investigative Journalists (ICIJ) that lifted the lid on offshore links of reknowned figures worldwide. It includes over 11.5 million documents from the files of Panama-based law firm, Mossack Fonseca.

The ICIJ spent a year mining through the large volumn of documents to expose how world leaders, companies and celebrities undertook to avoid tax and to launder funds through illicit financial flows and offshore havens.

“The Treasury welcomes the release of such information which, like the recent release of information related to the clients of HSBC, provides the basis for authorities to act against those who illegally move funds out of SA,” noted Gordhan.

“The world is systemically narrowing the scope for those who want to hide their offshore assets and avoid paying their taxes due to the South African fiscus.

“It is in the interests of all those hiding their assets to come clean and disclose, and the Government offers such persons a way to legitimise their financial affairs before they are caught out,” he said.

The Panama Papers allege that Zimplats, in which South Africa's Impala Platinum [JSE:IMP] (Implats) is a majority shareholder, used an offshore company, HR Consultancy, to pay employees in Zimbabwe. The precious metals miner denied.

It also showed that Fidentia’s convicted accountant Graham Maddock paid Mossack Fonseca $59 000 in 2005 and 2006 (R1m in 2016) to create two sets of offshore companies.

John Levin, who in August 2014 replaced Dines Gihwala as co-curator with George Papadakis, told Fin24 on Tuesday that, “except for the costs of registration of the foundations, no investor funds were diverted to these entities”.  

The Fidentia scandal saw its mastermind, J Arthur Brown, lavishly spend the savings of 47 000 widows and orphans, wasting over R500m of their money. He was eventually sentenced to 15 years in jail on December 1 2014. He was first arrested in 2007 in one of South Africa’s biggest financial scandals, in which Brown ran a pyramid scheme and used investors' funds for his own personal gain.

President Jacob Zuma's newphew, mining magnate Khulubuse Zuma was also thrust into the Panama papers spotlight.

The report allege that Zuma has an association with a company, Caprikat. The company, established in the British Virgin Islands, scored a R100bn oil deal in the Democratic Republic of Congo.

Khulubuse Zuma’s spokesperson, Vuyo Mkhize, responded that Khulubuse does not, and has never held any offshore bank account.

MORE ON THE PANAMA PAPERS AND THE SA CONNECTION:

No Fidentia investor funds went to Panama - curators
How Fidentia fraudster stashed cash abroad – Panama leaks
Panama Papers: BHP Billiton unaware of ‘high risk’ review
Panama leaks: Implats refutes it paid Zim wages via offshore firm
Panama Papers: Khulubuse Zuma responds

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