Panama Papers: time to turn the stone

The database for the Panama Papers has been released and all the world can get to see the bad guys. And some good guys, like all the charities that had their name used without their consent. Here in New Zealand a dream team of journalist from the public broadcasters, with Nicky Hager, have got access to the actual documents, rather than just the names of entities and officers. So far the news stories that have been run have not amounted to much.

I wanted to see if there could be a story just from the database for New Zealand, with only the help of Google searches to add some detail. There are, of course, a few interesting names linked to New Zealand, such as the Asia Pacific Boar (NZ) Ltd. And most of the focus for all the journalists have been on the New Zealand based trust companies that have direct links to Mossack Fonseca, particularly those associated with Ken Whitney, the Prime Minister’s legal advisor who no longer holds a current law practising certificate. But what are the possibilities of offshore trust companies that have little branch offices in New Zealand.

I have found the Turnstone Trustees (New Zealand) Ltd as Trustee of the Bencca Trust, one of the longer names in the database. This was linked to the parent firm – Turnstone Trustees – which is a great name when you think about. And Turnstone Trustees are completely upfront about their role in the ‘offshore’ world, and proud of it judging by their website. The principal is named Heinrich Odendaal, and yes they are of Prussian stock by the look of it, but are actually a colonial family from Mauritius. The trust firm seems to have started in Africa, but moved to the Isle of Man in the Channel Islands, retaining a branch in South Africa and an outpost in New Zealand. This outpost is in the north of the North Island, in the small city of Whangarei, and appears to be in a law office in Norfolk St.

Turnstone Trustees are experts in estate and wealth planning on a global scale. Their news page is interesting. It starts off with a headline: “Something new under the Offshore sun?”, and then refers to yet another tax agreement being sought by the South African Revenue Service. It then talks about the “OECD Influence”, and their offensive against “so-called tax havens”. The website notes that the OECD wants to force compliance on offshore centres, even though these rich countries also have their own secrecy laws. Then there is an interesting discussion of the TIEA, the Tax Information Exchange Agreement, which the OECD devised as a format for the exchange of tax information. It lists 8 rules that revenue agents should follow when asking questions in other jurisdictions. This could be significant for the debate in New Zealand, where full disclosure is assumed to already be in place.

The only news on the Turnstone site specific to New Zealand is from 2011, and refers to the introduction of the so-called ‘look through’ companies. But this isn’t the most interesting part, it is how the companies can be combined with trusts to meet the conditions for some double tax treaty concessional rates. As they put it: “for non-New Zealand investors it isn’t the look through aspect that is of greatest significance, as they can already invest through the trustees of a New Zealand foreign trust and not pay New Zealand tax.” Is that a tax haven framework or not?

The website refers to a Brian Hatton as the managing director, but the man on the ground is named George Swanepoel, and one assumes he is in Whangarei. On Google Maps we can see there is a sign for Swan Law at 7 Norkfolk St, but the law firm has no land line, if it is a law firm, and the contact number on the website is a direct dial to the Isle Of Man. There is a George Swanepoel in Tauranga, but he may unrelated, sorry if it’s the wrong George. In fact, Tauranga is not such a strange place to find a trust company. The Southpac Trust company appears to be based there, and it also has branches in the Cook Islands (where it was known as South Pacific Trust), and in Nevis (as in Saint Kitts & Nevis). There is a brief mention of Southpac in the Panama Papers, listed as a ‘prospect’, but it obviously was not needed by Mossack Fonseca. Presumably they should have asked Mr Whitney for a reference.

So it is good that there are trust companies in regional New Zealand, and not just based in Auckland. We could even have professional directors based there, like the infamous Jesse Grant Hester and Stephen John Kelly. Hester appears in the Trustnet and Mossack Fonseca lists, so seems to get around a bit, but apparently lives on the island of Sark in the Channel Islands. We too could have cosmopolitan trust directors who never leave New Zealand, and still call ourselves the Jersey of the South Pacific, as John Key wants.

Addendum: in the previous post I referred to a billion dollar structure sold by IEL to European Pacific. It was in fact an A$2.2 Billion structure that formed part of European Pacific’s new Malaysian branch in 1991.

 

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2 Responses to Panama Papers: time to turn the stone

  1. Kiaora

    I found this…

    Incorporating Swan Law
    With effect from 19 December 2014, George Swanepoel will discontinue the practice of Swan Law. He has merged his practice with the practice of Regent Law.

    Kay Smith who was previously employed by Swan Law will move to Regent Law on 19 January 2015 and will continue to attend to those clients and files that she was handling. Swan Law’s other files will be handled by one of the other staff members at Regent Law.

    We understand and respect that your relationship with your lawyer is important and if you wish to make other arrangements you are free to do so. Should you wish to discuss the move with George Swanepoel, Kay Smith or Nigel Mason, principal of Regent Law, please do not hesitate to make contact either by email of telephone. The contact details for Swan Law will remain unchanged and telephone and email will be monitored by the team at Regent law from 22 December 2014.

    The offices at Regent Law will close for business on 23 December 2014 and reopen on 5 January 2015.

    We take this opportunity to wish you a Merry Christmas and a Happy and Prosperous New Year.

    http://www.regentlaw.co.nz/uncategorized/incorporating-swan-law/

  2. Thanks Siena. Regent Law appear to still offer ‘foreign trusts’, though no mention of Turnstone. If you are familiar with Auckland and want to find Virtus Trust in the database go ahead.

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