Ukraine leader embroiled in offshore controversy

Ukraine leader embroiled in offshore controversy
Posted at 5:08 AM, Apr 06, 2016

BERLIN (AP) — The president of Ukraine became the latest prominent politician to deny wrongdoing Wednesday after his name was linked to secretive offshore accounts arranged by a Panama law firm.

The revelations have raised suspicion that such offshore entities were set up to avoid taxes, but Petro Poroshenko denied that was the purpose in his case. Rather, he said, it was necessary to create an offshore holding company to put his candy business in a blind trust when he became president of Ukraine in 2014.

"This is absolutely normal procedure, and I think this is the main difference from the naming of all the political figures in this Panama list," Poroshenko said in Tokyo, where he was meeting with Japan's Prime Minister Shinzo Abe and business leaders.

"If we have anything to be investigated, I am happy to do that," he said. "But, this is absolutely transparent from the very beginning. No hidden account, no associated management, no nothing."

Reports, based on a trove of confidential documents from Panama-based law firm Mossack Fonseca, have purported to expose the offshore arrangements of public officials, businesspeople and celebrities around the world.

Iceland's prime minister became the first casualty of the affair Tuesday, stepping down two days after a video was aired showing him breaking off a television interview over questions about his family's offshore dealings.

Sigmundur David Gunnlaugsson had faced opposition calls to resign over revelations he had used a shell company to shelter large sums while Iceland's economy was in crisis. He denied wrongdoing and has recommended that his deputy Sigurdur Ingi Johannsson take over as prime minister for an unspecified period of time.

Protesters planned to gather outside parliament Wednesday afternoon in the third consecutive day of demonstrations calling for a new government.

The so-called Panama Papers reports, which were coordinated by the Washington-based International Consortium of Investigative Journalists, have prompted both fierce criticism of those named and strong denials of wrongdoing. While there are legitimate reasons for setting up offshore companies, corruption experts say such constructs are frequently used to hide assets — be it from tax authorities or ex-spouses.

In Poroshenko's case, Ukrainian opposition groups argue that the president's decision to set up an offshore holding company in the British Virgin Islands could have deprived his country of millions of dollars in taxes.

A British Virgin Islands company has also been linked to Formula One driver Nico Rosberg, though his lawyer said the offshore firm was created solely for liability reasons and to enable him to operate internationally.

German public broadcaster NDR reported that Mossack Fonseca manages a company called Ambitious Group Ltd which has a contract with Mercedes for Rosberg's "driver services."

Rosberg's German lawyer, Christian Schertz, said Ambitious Group, which is registered in the British Virgin Islands, wasn't used for tax avoidance.

"Tax-wise, Mr. Rosberg acted correctly in every way," Schertz said in a statement late Tuesday. Rosberg, who won Sunday's Bahrain Grand Prix, is registered in Monaco for tax purposes and receives all payments there, he said.

A prominent Bollywood actor, Amitabh Bachchan, denied reports by The Indian Express newspaper that he was connected to four shipping companies registered in tax havens. "It is possible that my name has been misused," Bachhan tweeted late Tuesday.

"I have paid all my taxes including on monies spent by me overseas," he said. "Monies that I have remitted overseas have been in compliance with law, including remittances through LRS (Liberalized Remittance Scheme) after paying Indian taxes. In any event the news report in the Indian Express doesn't even suggest any illegality on my part."

France's far-right National Front party said Wednesday it was filing law suits for defamation against media who imply that it or leader Marine Le Pen — who plans to run in the 2017 presidential race — may be implicated in the Panama papers scandal.

Paris daily Le Monde reported Tuesday on the offshore dealings of a longtime Le Pen acquaintance whose company provides publicity for electoral campaigns. The paper also examined potential but unproven offshore interests of Le Pen's father, Jean-Marie Le Pen, via a former employee.

Le Pen's anti-immigration National Front portrays globalization as one of the enemies to redressing the French economy and preserving the nation's identity, making any innuendo that people linked to the party may allegedly be using foreign shell companies to hide funds a sensitive issue.