Tags: China | offshore | BVI | wealth

Report: China's Elite Are Concealing Mountains of Wealth in the Caribbean

By    |   Thursday, 30 January 2014 07:10 AM

China's elite, including close relatives of top government leaders and executives at China's scandal-tarred major energy companies, are stashing their massive wealth in secret offshore companies in Caribbean tax havens, according to files obtained by the International Consortium of Investigative Journalists (ICIJ).

The non-profit journalist group estimated that between $1 trillion and $4 trillion in "untraced assets" have left China since 2000.

The records obtained by ICIJ show that relatives of at least five current or former members of China's Standing Politburo — a tiny circle of seven to nine men who run the Communist party and the nation — have incorporated companies in the Cook Islands or British Virgin Islands (BVI).

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"Ordinary Chinese have grown increasingly angry over their vast wealth and what many see as the hypocrisy of officials who tout 'people-first' ideals but look the other way while their families peddle power and influence for personal gain," the journalist group said.

Western financial companies are apparently the enablers who helped the Chinese elite set up their secret accounts.

PricewaterhouseCoopers, UBS and other Western banks and accounting firms "play a key role as middlemen" in helping Chinese clients set up trusts and companies in the BVI, Samoa and other offshore centers, the ICIJ said. Credit Suisse reportedly helped former Premier Wen Jiabao's son create his BVI company while his father was leading the country.

"What's the point of running the Communist Party if you can't get a couple billion for your family?" said Steve Dickinson, a U.S. attorney who has investigated fraud involving BVI companies. "The issue is enormous and has tremendous significance for China, and the fact that everybody dances around it and doesn't want to talk about it is understandable but scandalous."

An estimated 40 percent of the BVI's offshore business comes from China and other Asian nations, according to BVI authorities who the ICIJ talked to.

The Guardian reported China's largest energy companies and their senior executives have made "extensive use" of offshore shell companies in the Caribbean.

Those companies, including Sinopec, PetroChina and the China National Offshore Oil Company, are caught up in multiple corruption probes tied to their networks of shell companies.

The Guardian reported that access to its website is partially blocked in China as a result of its coverage based on the ICIJ research, and that other media outlets that have reported on the story — ranging from the El Pais in Spain, France's Le Monde, Bloomberg and The New York Times — are facing similar difficulties.

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China's elite, including close relatives of top government leaders and executives at China's scandal-tarred major energy companies, are stashing their massive wealth in secret offshore companies in Caribbean tax havens, according to the International Consortium of Investigative Journalists.
China,offshore,BVI,wealth
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2014-10-30
Thursday, 30 January 2014 07:10 AM
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