After analyzing documents released as part of the Panama Papers leak, local media in New Zealand Monday reported that the country plays a key role in helping the wealthy hide their money. New Zealand companies and trusts were reportedly used to secretly channel funds, especially for wealthy Latin Americans.
The joint report by Radio New Zealand, TVNZ and investigative journalist Nicky Hager analyzed more than 61,000 documents from the Panama Papers leak which related to business activities within New Zealand.
They found Carlos Dorado, the vicepresident of ItaIcambio, a Venezuelan investment bank and exchange organization. Dorado is known as a friend of the right , who has supported many liberal policies in the nation. He and a Mexican lawyer used Abbotsford Trust in conjunction with a Dutch incorporated company named Neuchatel Holdings to buy a Mexican pharmaceutical company named Marzam from Genomma Lab.
As a result, the 37.5 percent of the pharmaceutical delivery market now belongs to Pablo Escandón, the owner of the giant Nadro compnay.
The report claims that the Panama company at the center of the scandal, Mossack Fonseca, actively promoted New Zealand as a good place to do business due to its tax-free status, high levels of confidentiality and legal security.
The report alleged that Mossack Fonseca’s main contact in New Zealand was Roger Thompson, co-founder and director of accounting firm Bentleys New Zealand, the registered office of Mossack Fonseca New Zealand. Thompson was listed in more than 4,500 Panama Paper documents.
Foreign trusts in New Zealand surged to almost 10,700 this year from less than 2,000 ten years ago, according to Inland Revenue figures quoted in the report. However, Thompson said that the use of trusts for tax evasion was not common and his firm did not assist people in illegally hiding assets.
Prime Minister John Key said it was "utterly incorrect" that New Zealand was a tax haven, adding he was open to changing rules around foreign trusts if advised by a review or the Organization for Economic Co-operation and Development.
The joint report comes on the heels of a major Panama Papers data drop on Monday. The International Consortium of Investigative Journalists released the details of more than 200,000 companies associated with Mossack Fonseca, a small part of the estimated 11.5 million documents.