By Revan Aponso
On October 3, 2021, the International Consortium of Investigative Journalists (ICIJ) released a leak of over 11.9 million records from exposing offshore accounts of many of the world’s wealthy and powerful. The leak, labeled the Pandora Papers, exposed over 330 politicians, 130 Forbes list billionaires, and a series of various celebrities, drug dealers, fraudsters, royal family members and leaders of religious groups. With over 2.94 terabytes of data, the leak was a collaboration between over 600 journalists from 150 media outlets and 117 countries. Unlike the Panama Papers, which solely centered on documents from an offshore law firm in Panama, leaks of documents, images, spreadsheets and emails originated from firms based in the British Virgin Islands, Hong Kong, Panama, Belize, the Seychelles, and South Dakota. In Sri Lanka, multiple politicians were implicated in the Pandora Papers scandal including Ramalingam Paskaralingam and Nirupama Rajapaksa.
Ramalingam Paskaralingam served as secretary to Sri Lanka’s finance ministers under President Ranasighe Premadasa from 1989 to 1993, then under Dingiri Wijetunda until 1994. In his implication in the Pandora Papers, the ICIJ found a trust set up by Paskaralingam in the British Virgin Islands, through Trident Trust. According to the investigation, the trust was set up as a form of “succession planning” and according to documents, his occupation was listed as “retired” along with himself and other family members listed as beneficiaries. The trust owned two companies, one based in the British Virgin Islands and one in Singapore, and held shares in the Horizon College of Business Technology (HCBT), a vocational college in the eastern part of Sri Lanka’s capital city of Colombo. After the ICIJ’s “Secrecy for Sale” investigation, however, the trust was closed and another one was created for Paskaralignam’s son and nephew due to concerns that he was “going to be left without proper succession [plans]”, according to an email sent by Paskaralingam. More emails from advisors overseeing the trust showed concern after they were instructed to divert $100,000 that was to be invested in HCBT to “personal expenses.” Additionally, advisors were instructed to transfer $2.6 million to invest in a property in the United Kingdom. While this trust was closed in 2016, Paskaralingam still owns 80% of HCBT through his company in Singapore, St. Johns Investments.
Nirupama Rajapaksa served as a deputy minister of water supply and drainage in Parliament from 2010 to 2015 and is also a cousin of Gotabaya Rajapaksa, the current president of Sri Lanka. Along with her husband, Thirukumar Nadesan, she controlled a shell company used to buy luxury apartments in London and Sydney and to make other investments. Working as a consultant and hotel entrepreneur, Nadesan used shell companies set up in secrecy jurisdictions to gain consulting contracts with companies working with the government and to buy artwork. In one instance, Nadesan used a shell company, Pacific Commodities, to transfer 31 paintings and other South Asian artwork to Geneva Freeport, a warehouse where assets are not subject to taxes or duties.
The exposure of the Pandora Papers comes at a time where Sri Lanka is in an economic crisis. In August of 2021, Sri Lanka declared an economic emergency following surging food prices with fallout from the ongoing pandemic, a growing foreign debt and a 9% decline in tax revenue. Additionally, the government recently approved a tax amnesty making it legal for individuals with undisclosed assets and income to disclose wealth and pay 1% in taxes to avoid prosecution and other penalties.
In a statement from Transparency International Sri Lanka, a spokesperson wrote, “We are acutely conscious that the actual amounts of wealth hidden offshore would be so much more than this [reported by ICIJ] – and it remains a massive problem for developing nations such as Sri Lanka”.
Reports of offshore money laundering, while legal in many cases, often leads to questioning by the public of the integrity of those who hold a lot of wealth and especially those who are supposed to lead the country. For Sri Lanka, a country facing economic hardship, reports of money laundering by individuals with connections to the government, add to criticism and questioning of the integrity of the country’s government. □