Some of the biggest names in Africa have been exposed in the Paradise Papers for using offshore tax havens to stash their money, among them Liberian president Ellen Johnson Sirleaf and Nigeria’s banking chief Godwin Emefiele.
Coming 18 months after the Panama Papers provoked worldwide outrage over the use of shell companies by the world’s political and business elites, this latest leak involves 13.4 million confidential files mainly related to the Bermuda law firm, Appleby.
Although it is not illegal to use tax havens, most consider it unethical for the rich and powerful to avoid paying taxes while the majority of their compatriots struggle to make ends meet. Tax havens are also secret jurisdictions that can easily hide criminal activity like bribery and money laundering.
For the past year 96 media outlets worldwide, co-ordinated by the International Consortium of Investigative Journalists (ICIJ), have been poring over the papers, said to be one of the biggest leaks in data history.
In Nigeria, the Premium Times discovered that Central Bank of Nigeria governor, Godwin Emefiele, had stakes in at least three companies in Switzerland, Bermuda and the Isle of Man alongside the chair of Zenith Bank, Jim Ovia. The two are believed to have used artificial leasing schemes to avoid £11m in VAT on luxury jets imported into the EU between 2013 and 2015. Both men reject the allegations, saying they acted in accordance with the laws applicable to the relevant jurisdictions at the time.
The Premium Times also reveals that the president of the Nigerian Senate, Bukola Saraki, has a company registered in the offshore tax haven of the Cayman Islands. Saraki, currently battling separate fraud allegations in the courts, failed to list Tenia Ltd on his assets declaration when he became governor of Kwara State in 2003 and when he was elected senator in 2011. The revelation comes only 18 months after The Panama Papers exposed his ownership of at least other three secret offshore firms.
The paper trail has also led to Ellen Johnson Sirleaf, who before becoming Liberian president in 2006 was a director of Databank, a financial services provider based in Ghana.
According to Appleby’s files, she is listed as a director of the Bermuda-based company Songhai Financial Holdings Ltd, a subsidiary of Databank’s finance, fund management and investment company Databank Brokerage Ltd, from April 2001 until September 2012. Ken Nana Yaw Ofori-Atta, now Ghana’s finance minister, was a co-founder of Databank and a co-director of Songhai.
Stephen D Cashin, chief executive of Pan African Capital and a board member of Databank, told the ICIJ that Databank had no business in Liberia and that Johnson Sirleaf was elected to the board of Databank before becoming president and has no interest in Songhai or Databank. Cashin said Sirleaf-Johnson resigned from Songhai before her election campaign but the resignation was “not effected” until 2012 due to “an administrative oversight” in Bermuda.
Meanwhile, Uganda’s foreign minister and former UN General Assembly president, Sam Kutesa, has been found to have set up an offshore trust in the Seychelles to manage his personal wealth in 2012. The Obuyonza Discretionary Trust held shares in the Seychelles company Katonga Investments Ltd.
An internal Appleby document from 2015 reported that the company’s intended activities were “consultancy, investments, trading and airport services in Uganda”.
The money for Katonga was to come from Enhas Uganda Ltd, another Kutesa entity, Appleby’s notes state. Kutesa has owned Enhas, a ground-handling service at Uganda’s Entebbe Airport, since the 1990s.
In 1998, a Ugandan parliamentary committee named Kutesa and another co-owner in a report criticising the privatisation that helped create Enhas and led to its lucrative airport contract. The report concluded that the privatisation had been “manipulated and taken advantage of by a few politically powerful people who sacrifice the people’s interests”.
As part of a periodic review in 2015, Appleby labeled Kutesa’s companies a “high risk”, given his political role and media reports of alleged corruption and bribery.
Kutesa told Appleby that the purpose of the trust was to separate his government income “from his personal assets and belongings”. In 2015, however, Appleby noted that the companies connected to the trust were dormant and that “it seems that nothing such is being done”.
Kutesa confirmed to ICIJ’s media partner in Uganda, the Daily Monitor, that he established the companies, but “I have never done anything with it at all. I told Appleby to close it many years ago.” He said he had registered a company in Uganda and is paying taxes. “I thought you could avoid, not evade, taxes but I found it was not practical, and unnecessary,” Kutesa told the Daily Monitor. “I don’t have anything to hide.”
The Uganda Revenue Authority says it requires time to “study” if the minister’s companies in Uganda are tax compliant.
Former Kenyan agriculture minister Sally Kosgei is another prominent African to come under scrutiny. The papers show that Kosgei owned a Mauritius company, Zonrisa Ltd, which was previously registered in the Isle of Man under the name Aisha Ltd. She also owns a 70-hectare farm in Gatanga, Zena Roses, where she grows flowers for export.
Appleby documents indicate that proceeds from the farm were used by Aisha Ltd to purchase a £1m apartment in central London near Harrods. “Kosgei owned her offshore company on April 2001, when she began work as the cabinet secretary in the Office of the President [and] the ownership continued throughout her tenure as one of Kenya’s most powerful politicians,” the ICIJ said.
Kosgei told ICIJ that she bought the flat with personal funds before becoming the head of Kenya’s public service at a time when she expected to spend time in the UK due to her children’s studies.
She is quoted as saying that “there is no relation whatsoever” between the purchase and date of her work in the Office of the President. She also told ICIJ that she acted on a lawyer’s advice and that it was not illegal for Kenyans to buy property through offshore companies and that she had “satisfied all obligations – legal, professional and ethical – as a public official in Kenya” and declared everything that is and was required.
Ibrahim Mahama, the CEO of Engineers&Planners Co Ltd and younger brother of the former president of Ghana, John Mahama, is named in the Paradise Papers for wanting to open offshore companies on the Isle of Man, one of them in connection with a £5 million Bombardier Challenger jet. Mahama’s company denied any wrongdoing.
Appleby ranked Mahama and his companies as high-risk due to his relationship to the then president and allegations in local media that government funds were being used to repay the company’s multimillion-dollar bank loan.
Ibrahim Mahama is currently under investigation by Ghana’s economic and organised crimes office for allegedly issuing bad cheques. In 2016, Ghanaian authorities took Mahama’s company to court for allegedly not paying social security payments to staff; the case was later settled.
Evidence of shady dealings in Democratic Republic of Congo’s mining sector have also been exposed by the Paradise Papers. In 2008, the Swiss-British mining giant Glencore loaned $45 million (£34.1 million) to Dan Gertler, an Israeli middleman close to DR Congo’s president, Joseph Kabila. The loan was conditional on Gertler successfully negotiating a new deal with Congo’s government for a mine in which Glencore had a stake. The deal enabled Glencore to take over the Katanga copper mine, with Gertler also buying a stake – directly financed by the Glencore loan.
“The loan was really a kind of reward scheme,” Peter Jones from anti-corruption NGO Global Witness was quoted as saying in Germay’s Die Welt newspaper. “Gertler provides his services, which is apparently access to power, and in return he gets these little bonuses like being loaned the money to take part in the takeover.”
Jones added: “This is a story about how huge companies can go into environments where there isn’t much regulation and hide the kinds of deals that they are striking by using offshore companies and vehicles.“And that means they can get away with deals that can prove quite damaging to the countries they work in.”
A 2013 report estimated DR Congo lost $1.4 billion because it sold its resources below value, reinforcing its status as one of the world’s poorest countries despite its mineral wealth.
Angola‘s sovereign wealth fund was created in 2012 to invest the country’s vast oil profits for the benefit of the people but the Paradise Papers reveal that one of the fund’s managers is using its money to invest in his own businesses.
Jean-Claude Bastos, a Swiss-Angolan entrepreneur, administers the majority of Angola’s £3 billion wealth fund through his company, Quantum Global. According to investigations by the UK’s Guardian newspaper, as one of the ICIJ consortium members, Bastos has invested capital from Angola’s wealth fund in at least four assets that he controls. The entrepreneur has denied that this is a conflict of interest.
Bastos, who was previously convicted in Switzerland of illegally paying investment funds into his own pockets, won the contract to manage most of the fund without any competitive tender. The fund’s chair is Jose Filomeno dos Santos, the son of Angola’s former president Jose Eduardo dos Santos.