LONDON: As the Supreme Court resumes the Panamagate Case hearing on Monday, ARY News said a UK-based newspaper had revealed in an article earlier this year that the children of Prime Minister Nawaz Sharif raised a sum of a £7m loan from Deutsche Bank against four flats in Park Lane, London owned by offshore companies.
The Guardian reported the properties, bought when Sharif was in opposition, were owned by British Virgin Islands shelf companies on the books of the offshore agent Mossack Fonseca, the Panama Papers revealed.
Mossack Fonseca took six years to discover Sharif’s family was behind firms on its books, the article said.
The premier and his family members have always denied any wrongdoing, and with a case still in the apex court, none have ever been convicted of any offence.
According to the article, in October 2008, PM Sharif’s son Hussain and daughter, Mariam, turned to the Swiss arm of Deutsche Bank to borrow large sums, using the flats as collateral.
Three BVI companies were used to raise the loan, which entitled Nawaz Sharif’s children to borrow £3.5m in cash and a further £3.5m in money to be invested in ‘liquid assets’ by the bank.
Deutsche Bank said, “We fully recognise the importance of this issue. We have enhanced our procedures for bringing clients on board and verifying with whom we are doing business, and our policies, procedures and systems are designed to ensure that we comply with all applicable rules and regulations.”
The bank started auditing its private banking clients in 2013, seeking confirmation that they complied with all relevant tax rules. Checks on its Swiss and Luxembourg clients are now understood to be complete.
The flats in question are at Avenfield House overlooking Park Lane, being held by two BVI entities on the books of Mossack Fonseca, Nielsen Enterprises and Nescoll Limited, said the Guardian.
Using her married name, Mariam Safdar, Sharif’s daughter declared herself as the sole shareholder of Nescoll in 2006 in a letter filed with Mossack Fonseca.
Under the arrangement with Deutsche, Nescoll and Nielsen were allowed to take up to £1.75m each, and a third BVI company not represented by Mossack Fonseca, called Coomber Group, another £3.5m.
Papers for Coomber were signed by Mariam and Hussain Nawaz Sharif in June 2007.
However, the Sharif family said the companies in question belonged to Hussain Nawaz Sharif and not his sister, and that he had filed all relevant tax returns, as per the article.
“None of the corporations mentioned are owned or run by Mr Nawaz Sharif, the prime minister of Pakistan. Ms Mariam Nawaz Sharif is not a beneficiary or owner of any of these companies.”
“Ms Mariam Sharif is merely a trustee of the corporations owned by Mr Hussain Nawaz, which only entitle her to distribute the assets to Mr Hussain Nawaz’s family if required. Mrs Hussain Nawaz has unequivocally and clearly disclosed all corporations mentioned in the leaks, their sources of funding – primarily the sales of the steel mill in Jeddah – and other financial facts in recently televised interviews.”
The Park Lane flats were bought between 1993 and 1996, but the companies behind them were not transferred to Mossack Fonseca until 2006.
Leaked data showed it took the firm until 2012 to realise that it was acting as agent for the companies. Sharif returned to power for a third term as premier in 2013. The firm was concerned enough to immediately place the companies on a watch list, ordering checks every six months.
A note on the files warned not to offer Mossack Fonseca’s own staff as nominee directors or shareholders. The British Virgin Islands authorities were alerted, in a letter that mentioned Mariam Safdar was the owner of Nielsen and that the company had a loan with Deutsche Bank in Geneva.
But the firm appears to have carried on processing paperwork, including the appointment of new directors and acted for the Sharifs until their companies were transferred to another representative two years later.
The Sharif family’s investment in upmarket London property was disclosed in 1998 by Pakistan People’s Party (PPP) leader Rehman Malik, who had fled to London after allegedly being arrested and tortured.
He compiled a report that he said showed the Mayfair homes had been bought using ‘ill-gotten wealth earned through corrupt practices’.
Malik claimed they had not been declared on tax returns, in breach of Pakistani law.