Matt Nippert continued his excellent work on foreign trusts yesterday in The Herald:
Jet, mansions figure in $232 million foreign trust case to be heard in Auckland court
An Auckland courtroom will on Friday become a battleground over Manhattan penthouses and a private jet amid allegations that they are the proceeds of a globe-spanning mega-fraud.
The High Court at Auckland is set down to hear a request from relatives of controversial Malaysian financier Jho Low who oppose the seizure of assets worth $230 million alleged by the United States Department of Justice to be the proceeds of crime.
US court filings said the relatives are beneficiaries of a number of New Zealand trusts that are claimed to directly own a number assets caught up the probe of a Malaysian sovereign wealth fund known as 1MDB.
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The filings claim a number of New Zealand trusts, with names as varied as Elephant Sun and Stars Tower, were the direct owners of assets including a Bombardier private jet, a hotel in Beverly Hills and a $55m Los Angeles mansion formerly owned by Fantasy Island actor Ricardo Montalban.
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According to Companies Office filings, the New Zealand trusts in question were established and directed by staff of Auckland law firm Cone Marshall, and also used the local trust specialists’ Stanley Street office as a mailing address. …
Of more interest than the specifics is the wider implications:
Case rekindles trusts debate
The appearance of New Zealand trusts in the 1MDB affair threatens to re-ignite controversy over our foreign trust industry.
The release last April of the Panama Papers, a large-scale leak of previously secret company and trust data maintained by Panamanian law firm Mossack Fonseca, had thrust New Zealand’s role in the international finance scene into the spotlight.
A subsequent government inquiry, headed by John Shewan, had proposed tighter regulation and more transparency for the foreign trust industry but concluded there was “no direct evidence of illicit funds being hidden in New Zealand foreign trusts”.
The Labour and Green parties both said the 1MDB developments – disclosing control of $230m in alleged proceeds of crime by foreign trusts which will this week be contested in an Auckland courtroom – meant Shewan’s conclusions should be revised.
Labour leader Andrew Little said the appearance of New Zealand in the 1MDB affair risked our international reputation and showed Shewan’s conclusions were “naive”. …
Will Bill English clean up the mess that John Key was determined to ignore?
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