Secret stakes in London property held by global political leaders have been uncovered in a huge leak of documents from Panama-based law firm Mossack Fonseca.
The investigation into the 11.5m leaked documents has shown that the family of Azerbaijan president Ilham Aliyev used foundations and companies in Panama to hold “secret stakes” in London property, according to the International Consortium of Investigative Journalists.
It also reportedly found that the children of Pakistani prime minister Nawaz Sharif owned London property through companies created by Mossack Fonseca.
Using offshore structures is not illegal.
Mossack Fonseca’s services include wealth management and administering offshore firms for a yearly fee. It has strongly denied any wrongdoing.
However, the practise of using offshore structures has been linked to corruption, criminality and money laundering and UK prime minister David Cameron has pledged to crack down on the system.
Responding to the Panama papers leak, Rachel Davies, head of advocacy and research at Transparency International UK, described the practise of UK property being owned by secret companies in offshore havens as an “abuse of the global financial system.”
She added: “The Panama papers leak confirms that the world’s elite are gaming the international financial system to launder their stolen wealth.
“There is growing evidence that the luxury property market in the UK is a safe haven for laundered wealth, facilitated by the laws that allow UK property to be owned by secret companies registered in offshore havens such as the British overseas territories.”
The UK government wants to create a central register that will reveal the beneficial owners of offshore companies.
UK companies will have to reveal their “significant” owners for the first time from 30 June 2016.
Mossack Fonesca worked with more than 14,000 banks, law firms, company incorporators and other middlemen to set up companies, foundations and trusts for companies.
The papers showed that the UK was the second most popular country where intermediaries operated.
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