UK haven for Pakistanis to avoid tax or hide assets? Pandora papers highlight UK government's failure

New Delhi, India

Remember Pakistan Prime Minister Imran Khan's victory speech when he promised a new era? He had said, "Whoever violates the law, we will act against them. Our state institutions will be so strong that they will stop corruption. Accountability will start with me, then my ministers, and then it will go from there." 

What the cricketer-turned-politician will now do as the leaked documents, published by the International Consortium of Investigative Journalists (ICIJ) on October 3, revealed that key members of his inner circle owned an array of companies and trusts holding millions of dollars of hidden wealth. Click here for LIVE updates on Pandora papers leak

The documents, dubbed as Pandora papers, revealed names of powerful and rich people, who use tax and secrecy havens to buy properties and hide assets; many avoid taxes and worse. The names include world leaders, politicians and billionaires. 

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When it comes to Pakistan, Khan's allies, including cabinet ministers, their families and major financial backers have secretly owned an array of companies and trusts holding millions of dollars of hidden wealth. 

Surprisingly, the country's military leaders have been implicated as well, however, the report clearly mentions that the documents contain no suggestion that Khan himself owns offshore companies. 

Pandora papers and its UK connection

As the country is plagued by widespread poverty and tax avoidance, Pakistanis are ranked fifth among those buying properties in London through offshore companies, reveals an analysis of the Pandora Papers documents, mentioned by Pakistan's The News. British citizens hold the first position on the list, which is followed by Nigerians, Indians and Russians. 

Pakistan's media outlet, a media partner of the data leak report, The News, revealed that the secret files found 681 previously anonymous beneficial owners of 1,542 UK properties purchased through 716 offshore firms. The value of these properties is estimated to be more than $5.5 billion.

More than two-thirds of the properties are owned in London, with Westminster and Kensington and Chelsea being the most popular boroughs. 

Pandora papers: 

• Largest leak of offshore data in history explained
• Check list of other high-profile Indian names
• King of Jordan's property empire reportedly worth over $100 million
• Putin's alleged mistress has assets worth $100 million

The British broadcaster, BBC, another media partner of the data leak report, admits that the report's most shocking revelation is how prominent and wealthy people have been legally forming companies to buy property in the UK in secret. 

As the report has highlighted the UK government's failure to introduce a register of offshore property owners despite repeated promises to do so. 

The mention of ex-UK PM Tony Blair is also shocking for the country as the report revealed that the former PM and his wife saved £312,000 in stamp duty when they bought a London office. 

King of Jordan secretly amassed £70m of UK and US property. The Azerbaijani President Ilham Aliyev and his close associates have secretly been involved in property deals in the UK worth more than £400m. The report also revealed that how the Aliyev family have secretly acquired UK property using offshore companies.

The UK government will have to answer that how such massive wealth and dealing remained unnoticed. However, BBC reports that the UK government says it is cracking down on money laundering with tougher laws and enforcement. 

Also, it will introduce a register of offshore companies owning UK property when parliamentary time allows. 

It is important to note that the claims made in the ICIJ report need to be investigated further by official authorities to reach any conclusion. 

Imran Khan's response

"We welcome the Pandora Papers exposing the ill-gotten wealth of elites, accumulated through tax evasion & corruption & laundered out to financial 'havens,'" Khan said in a long Twitter thread.

"My govt will investigate all our citizens mentioned in the Pandora Papers & if any wrongdoing is established we will take appropriate action. I call on the international community to treat this grave injustice as similar to the climate change crisis."

Khan, who had run for office on an anti-graft platform, said that global poverty levels were fueled by corruption in tax havens, which he said divert funds away from the general public.

He also slammed wealthy countries for not being "interested in preventing this large-scale plunder nor in repatriating this looted money."

The "Pandora Papers" are the latest in a series of mass ICIJ leaks of financial documents, from LuxLeaks in 2014, to the 2016 Panama Papers, the Paradise Papers in 2017 and FinCen files in 2020.