Mauritian jurisdiction has been singled out internationally in the case of Tagwirei, a Zimbabwean billionaire sanctioned for corruption. But this is not the first time that our industry has been challenged. Recall.
The investigation of the American NGO “The Sentry” into a huge booty of Zimbabwean corruption suspected of having passed through Mauritius (see our edition of yesterday) comes to put the finger on the sinews of war: the “Ultimate Beneficial Owners »(UBOs) offshore companies in Mauritius. Mauritius is seen as a jurisdiction that can accommodate those who have dirty money to park. A severe and simplistic criticism of course, but sometimes fueled by the actions of the operators themselves. So much so that this is one of the official reasons why we find ourselves in this gray list of the Financial Action Task Force. To the question “Kot nou’nn foté?” operators in the sector, here is a brief reminder of the surveys that have punctuated the Mauritian offshore.
Tagwirei case (“The Sentry”, July 2021)
Kudakwashe Tagwirei, a Zimbabwean billionaire and adviser to the president sanctioned by the US Treasury’s Office of Foreign Assets Control for corruption, has been investigated by US NGO The Sentry. This reveals that Tagwirei (before his American sanction) was pulling the strings of companies incorporated in the offshore in Mauritius via a Mauritian management company (Capital Horizon).
However, officially, his name does not appear in any of the companies mentioned when a leak of his emails reveals that it was he who gave the orders. Even if it would have been completely legal, Capital Horizon accepts Tagwirei as a shareholder (before its American sanction), The Sentry notes the will and the capacity of the Zimbabwean to always hide, from Mauritius to the Cayman Islands, behind other individuals .
Luanda Leaks (ICIJ, January 2020)
This is one of the most successful cases. Isabel dos Santos, Africa’s richest woman according to Forbes, also the daughter of former Angolan President José Eduardo dos Santos, has hidden a fortune of $ 2.2 billion in the world, including Mauritius. So that her name does not appear in the Mauritian registers, she had recourse to “nominee shareholders”, or nominees. With its name well hidden, one of Isabel dos Santos’s Mauritius companies was able to secure a loan of $ 150 million from the Angolan government headed by her father.
But all the documentation leaked and the International Consortium of Investigative Journalists (ICIJ) and the Express revealed it was well behind the Mauritian companies.
Mauritius Leaks (ICIJ & “express”, July 2019)
In this investigation carried out in conjunction with 40 journalists from 18 countries based on a leak of documents from a Mauritian management company (Conyers Dill & Pearman), our African neighbors accuse us of stealing their tax through a scheme as legal as ‘effective. For example, a billionaire by the name of Craig Cogut, owner of real palaces where one night costs $ 15,000, creates a company in the Mauritian offshore. This Mauritian entity will heavily bill its own hotel in Seychelles for administrative or accounting services (activities that never took place here). Result: Profits in Seychelles plummet, it is the Mauritian company (taxed only at 3%) which declares the profits for activities carried out in Seychelles and throughout Africa. The tax authorities of fifteen African countries have opened investigations to recover their “legally stolen tax” following the Mauritius Leaks.
Fishrot Files (“Al Jazeera” and “Wikileaks”, December 2019)
Screenshot of Icelandic television documentary on the ‘Fishrot Files’ scandal. This footage shows the poverty and lack of infrastructure in Namibia and follows the accusation that the Mauritian offshore is robbing the Namibians.
The story and the process are similar to that of the Mauritius Leaks. An Icelandic company pays bribes to obtain fishing quotas in Namibia. And to avoid paying the heavy tax in Namibia, Samherji creates a company in Mauritius which invoices its Namibian subsidiary for “consultancy” which are supposedly held in Mauritius. However, the Mauritius branch was only a letterbox. The case caused a stir in Namibia as Al Jazeera tricked Namibia’s Fisheries and Justice ministers into paying bribes on hidden camera. Since December 2019, these ministers are still behind bars.
“Kot nou pa’nn foté”
Seen like this, the offshore can be seen as a rife with mafia and organized crime. Yet Maurice is not such a bad student. We were, for example, the first to sign the “Foreign Account Tax Compliance Act” and the agreements allowing the exchange of information between the authorities of various countries. The catch is that some management companies are still playing with fire by rubbing shoulders with extremely wealthy clients who are not very clear, and when they burn their fingers, the whole industry catches fire. The proof, despite all these signatures and these “good practices” the Financial Action Group has put us on its gray list, citing, among other things, shenanigans “to hide the identity of the real Ultimate Beneficial Owners”. The other weakness of our system is our weak capacity to conduct complex investigations with international protagonists