Jordanian Personalities hide in tax havens

An investigation in coordination with the International Consortium of Investigative Journalists  Panama Papers reveal:

Ministers, diplomats, businesspeople, companies and the Jordan Bank

 

-suspected in tax evasion and conflict of interest 

-Jordan’s Tax department a lion without teeth and complains about weakness of coordination   between ministries

-Not every offshore company is corrupt or is avoiding taxes 

Investigation by Musab Shawbkeh and Mohammad Ighbarieh

Jordanians are in the eye of the Panama Papers storm again. Ministers, politicians, businessperson have hidden their companies in safe tax havens with the help of the Panamanian Mosssack Fonseca law firm an agency which is specialized in registering offshore companies around the world.

Former Jordanian Prime Minister  Ali Abu Ragheb, businessman Khaled Shaheen, former head of the military investment fund Akram Abu Hamdan and businesswoman Daed Shareeb the former advisor to Libya’s strongman Muammar Qaddafi are not the only Jordanians who appear in the leaked Panama papers.

Jordanians in the Panama list include 760 personalities living in Jordan and for the most part carrying Jordanian citizenship. They have participated in 3,400 companies registered in tax havens mostly in the British Virgin Islands with a combined publicly declared capital of $180 million.

This investigation follows an earlier first round of revelation that  published on AmmanNet last April 2016. That report as this investigation has been coordinated by the Washington DC-based International Consortium of Investigative Journalism in which 330 journalists around the world researched  companies registered in 12 tax havens around the world in the period 1977-2015.

This report reveals a violation of the Jordanian constitution by the then Jordanian Prime Minister Ali Abu Ragheb (2000-2003). Article 44 of the constitutions bans duplicity of ministers from carrying out any commercial work. The fact that Abu Ragheb had established Jaar Investment Ltd in the British Virgin Islands three months before leaving the prime ministry.

This investigation also reveals lack of paying income taxes of net profits of the offshore company Levant Investment Trading Company Limited which was registered in a tax haven and works outside of Jordan despite the fact that it was established by means of the participations of Jordanian companies. The Jordanian Income Tax Law requires all income produced outside of Jordan to income tax if it is established on the basis of Jordanian money.

This  report doesn’t only show the tax evasion but it also shows a lack of cooperation between Jordanian officials of the income tax department, the Central Bank of Jordan and the Company Registra. The absence of this cooperation has allowed many to avoid paying taxes of their net income.

The director general of the income tax and sales department Bashar Saber complains about the lack of cooperation of the banks and the central bank with the tax department which allows the exit of Jordanian money that is invested abroad without the investor paying their legally required taxes.

The tax department has no legal or practical mechanism to prove the citizenship of Jordanian funds invested abroad and at the same time the Central Bank insists on banking secrecy as the reason for not providing any information on banking details of its clients to the department of sales and income tax.

This report also publishes Panama paper names of Jordanians that are considered public figures and whose names were not known before as having off shore companies.

Offshore companies provide Jordanians wanting to establish companies abroad with secrecy on the basis of the local laws. Many register offshore companies to avoid paying taxes or to hide conflict of interest because of the secrecy that the laws in those countries provide in terms of the owners, their shares and the capital of these companies.

In these tax havens companies have to pay a tiny amount of taxes or no taxes based on the legal status of those companies. Ramzi Nuzha a former member of the anti corruption commission in Jordan told Radio Al Balad/AmmanNet investigators that “in addition to avoiding taxes or conflicts of interest some register companies to protect their monies from legal cases against them.”

Kinda Hatter the Middle East and North Africa regional coordinator for Transparency International states that “not all companies registered in tax havens are corrupt or set up to avoid taxes.”  However, she continues “these companies must be transparent and publish to the public that it has registered an offshore company for this or that reason and that it was closed when the goal for which it was established had ended. “There has to be guidelines that regulate the work of these private sector companies that ensure good institutional governance,” Hattar said.

Abu Ragheb violates the constitution

With the help of Mosssack Fonseca the former Jordanian prime minister (200-2003) set up four offshore companies. Three months before leaving the prime ministry Abu Ragheb along with his wife Yusra Abu Hassan set up JAAR Investment Ltd an offshore company registered in the British Virgin Islands.

The company was registered on 22 July 2003 and run by Abu Ragheb three months before leaving office, according to company registration documents.

Ali Abu Ragheb resigned from his position as prime minister of Jordan on October 24th 2003.

By creating a company while in office, Abu Ragheb violated article 44 of the Jordanian constitution which forbids minister to participate in any commercial or financial work or to be a member of any company board while in office. Dr. Hamid Qubeilat the dean of the law school at Al Isra University and a constitutional law professor stated to Radio al Balad/Ammannet “a minister or the prime minister could take advantage of this company using the authority he has. It is possible that the management of the minister or the head of a foreign company more dangerous that a national company. This is why the constitution forbade this kind of conflict of interest.” Advocate Salah Maayteh member of the Rashid Coalition for Integrity and Transparency, a Jordanian NGO states: “The fact that the prime minister set up these companies is an attempt to circumvent the constitution even though his position requires that he is more transparent.”

Abu Ragheb Contradicts himself

Former Prime Minister speaking on the phone from outside of Jordan initially denied that the company is in his name. “The company is in the name of my wife, and I founded it when I was not a prime minister for the purposes of real estate and investment,” he told radio Al Balad/Ammannet.

“But you established this company three months before leaving the prime ministry,” we retorted to him.

“I left [the prime ministry] two month after the creation of the company and I didn’t violate the law. I knew I was leaving and I registered it for real estate purposes and the company never worked.”

But the documents that we have contradict this statement. Abu Ragheb set up the company with his wife Yusra on the 2nd of July 2003 while he was still in the prime ministry as the head of the government. He owns 45,000 shares out of 50,000 with the remaining shares in the name of his wife Yusra Abu Hassan.

Abu Ragheb and Taxes

The second company registered by Abu Ragheb incorporated in the same tax haven island was Levant Investment & Trading Company Limited with a registered capital of $11 million.

This company was registered in May 2005 about a year and a half after his resignation from office. The lion’s share of this secret foreign company are owned by Jordanian companies owned by members of his family including the Arab Iron and metal Company, Al Ishraq Commercial Investment, and Petra Iron company. Abu Ragheb told Radio al Balad/AmmanNet that the creation of this company was to establish an iron company in Sudan. He admits that this company pays no taxes in either Jordan or the Virgin Islands on the basis that it doesn’t work in either Jordan or the Virgin Islands.

But the registration of Levant Investments shows that the majority of the investment in this foreign company is Jordanian which means that its net profits are taxable. This is the conclusion of Hatem Kawasmi the director general KPMG auditing firm and the head  of the Jordanian Accountants Association. ‘The tax law is clear, if the majority of the investment in the foreign company is Jordanian money then the net profits of this company is taxable according to Jordanian tax law.”

This applies to the Levant Company which has not paid any taxes to the Jordanian department of sales and income tax. Bashar Saber the director general of the tax department explains to Radio al Balad/AmmanNet: “Article 3 of the tax law requires all those who make income outside of the Kingdom to pay 10% on net income if the source of this investment is Jordanian money.”

Ministers of Abu Ragheb Government in Panama Papers

Shareholders in the Levant company set up by Abu Ragheb are four former ministers who were part of his government. They are: Mahmoud Kayyed Hiasat the minister of culture (who died in 2010) and Michel Marto the Finance Minister, Fares Nabulsi the Minister of Jusrice and Mohammad Samer Tawil the minister of national economy all have been exposed in the Swiss leaks in 2015. They are accused of having secret accounts in the Swiss based HSBC with a balance in 2007 reaching two million and 200 thousands dollars.

Samir Kawwar who was a minister and a senator in the 1990s (as well as deputy chair of the Arab Bank until May 2016) also had shares in this company in the amount of $600,000 in which Jordan business man Ahmad Latouf as well as Mohammad Araj, Ahmad Shaheen, Samir Qurman and Yehiya Samawwi.

The investigative team sent to Tawil, Nabulsi, and Marto a fax message seeking their response for why they created off shore company and what were the activities of this company and whether they paid taxes on the net profits.?

The only response we received was a phone call from Mohammad Nabulsi the son of the former minister Fares Nabulsi who said: “my father is ill and he has a hard time remembering the details of this company.”

Abu Ragheb not sure

While Abul Ragheb was chairman of the Senate from (2007 -2010), he ran three offshore companies in Seychelles; two of them were founded on the same day on (March 3, 2010), while the third one was registered a month later.

But the real owner of these three companies remained unknown, as they are registered as stocks for their bearer. This kind of stocks where the owner’s name is not mentioned, and their ownership is transmitted to anyone easily, once he gets hold of the physical company’s registration certificate.

Lawyer Salah al-Maaytah, member of Rasheed Coalition for Integrity and Transparency, commented on that by saying “this is a form of covering up the real name of the stocks owner, or the owner of the company.Companies resort to this method to increase the complexity preventing the disclosure of the real owner, and this is what makes us look at the topic with much of distrust and suspicion.”

We asked whether or not Abu Ragheb declared his financial asssets in accordance with the financial disclosure law (also known as the illegal financial gains law), and its amendments on offshore companies? ·

* Abu Ragheb:  “Let the department … the legal ministry open the files for you, maybe I did declare … or maybe not; excuse me, you are not a legal entity to investigate with me.”

* Journalist:  Of course not, I’m asking on behalf of the people.

* Abu Ragheb:  “I did not violate the law, these companies did not function; does anyone register a company only to look at it? I mean whether or not I registered it, it does not mean anything because the money earned outside Jordan is not subject to income tax. “

To find out whether or not Abu Ragheb declared his financial discharged, Radio al-Balad requested from the Ministry of Justice, and the Department of Financial Disclosure, a list of the names of those who abstained from declaring their financial disclosure, and what are the procedures taken against them; but the ministry refused to answer the request which was presented according to the right of access to information law under the pretext of confidentiality of the requested information.

Kinda Hattar, the regional coordinator for the Middle East and North Africa at Transparency International organization (TI), requested that financial disclosure be opened to the public, so that the public and the supervisory institutions and civil society are able to get to know the public official who acquired illegal fortune.

She adds, we needto know what his possessions were before assuming his public service, then, to decide whether his current fortune is logical compared with his government functional service.  Hattar continued: “This information should be available to promote the community and judicial system of accountability.”

Sons of the Prime Minister

Not only the father was mentioned in the Panama’s documents, but the children’s names appeared also in the papers: Hassan, Mohammed, Eman and Samar registered two months before their father, Ali Abu Ragheb, left the Prime Ministry, a company called Deseratstar Investment Company Capital Ltd, in the British Virgin Islands.

Abu Ragheb’s children, Hassan and Mohammed founded with the business man, Yahya Samawi, a close friend of the family, Twisk Group Limited Company in mid-2006, in the British Virgin Islands.

We tried to call the children of Abu Ragheb, to clarify the reasons for the registration of these secret companies in a safe tax haven, but our attempts failed.

The two ministers Dajani and Munib Masri

Panama Papers revealed that the Jordanian former Minister of Labor (1975), and the well-known businessman, Munib Masri and members of his family, own 34 offshore companies registered in the British Virgin Islands, with a capital exceeded one billion dollars.

Some of Munib Masri’s companies work in Jordan and Palestine, and Munib is considered one of the wealthiest Arabs, according to Arabian Business magazine.

Nidal Qaryouti on behalf of Munib Masri’s companies responded during a telephone call with Radio al-Balad/AmmanNet, that the main objective of the registration of all Munib companies in the British Virgin Islands as offshore, is to avoid double taxation between the nations, because his companies are operating in more than 20 countries in the world.

The second reason for the registration of these companies is to facilitate the sale and purchase of stocks for the purpose of investment procedures in these companies without complexity, according to Qaryouti.

In terms of tax, Qaryouti says Munib’s companies which operate in Jordan pay tax and present their tax declaration continuously. He denies that the sources of his offshore companies’ funds are of Jordanian sources.

Najemeddine Dajani,  former Minister of Industry and Commerce (1976) and some members of his family, own the offshore company Nejemeddine Dajani and his family Co., Ltd., registered in the tax haven “Bahamas” with a capital of $50 thousand, of which a mere $100 is paid.

Dajani explained in a written reply, that the reason for the establishment of this company is to secure a source of savings to the family, and to ensure continuity avoiding complications and problems, and extending the distribution of inheritance concerning the bonds portfolio, and taking advantage of tax deductions.

Dajani denied that the purpose of the establishment of the company is tax evasion, stressing that the source of these funds is from work he made abroad since 1982.

Diplomats who are Traders

The name of the former Jordanian ambassador in London until 2004 Timour Dagestani, the former husband of Princess Basma about 30 years ago, appeared in Panama Papers.

Dagestani owns, according to the documents we have obtained, three offshore companies registered in the British Virgin Islands, with a capital of $50,000 each.

Dagestani registered his first company, Hesh International limited, in July 2004, and the other two in 2010.

Mohammad Tarif Ayoubi, the Honorary Consul of Jordan in Monaco, France, contributes also through his company Razin Group Holdings S.A.L in the Project Edgo Company, registered in the British Virgin Islands with a capital of $50,000.

Ayoubi has also managed an offshore company registered in the British Virgin Islands.

Ayoubi’s fellow, the Honorary Consul in Estonia, Ayman Shafiq Jmeyan, is a shareholder in an offshore company under the name of International Limited BlueFig, in addition to owning shares in Blue Fig Restaurant Group in Jordan.

Partnering with Jmeyan in his company registered in the Virgin Islands are:  Ramzi Fathi Abu Talib, the son of former Army Chief, architect Khalid Nahhas, businessman Ahmed Hamza Tantash, Satea’ Jalal Bustami and Wael Tawfiq Karadsheh.

We sent a letter to all these names asking for a response to the reasons why these companies are registered in tax havens, but we have not received any answer. The only respondendt came from Ramzi Abu Taleb, who only said over the phone, “If I own a company, you will discover that its information is legal.”

Sabih Offshore

Sabih Masri, the well known Jordanian businessman, and Chairman of the Arab Bank, is also mentioned in the documents of Panama as he founded the offshore Chalfont NOMINEES (PTC) Limited Company in the British Virgin Islands on (11 August 2013), with the capital of $50,0000. On the same day, the company founded two new companies in the Virgin Islands, owning the entire share capital of $50,000 each, Masri manages these new companies.

Through his Al-Masira International Company (A Bahraini offshore company) Masri invested with $900,000 in the Levant Investment & trading LIMITED company registered in the British Virgin Islands, which Ali Abu Ragheb owns the lion’s share. Sabih Masri has used his Saudi passport for the registration of this company

Michael Dagher Umniah Deal Hero

The controversial American Michael Dagher, the  Umniah deal hero, appeared in the Panama papers, founded the Mad Securities Limited Company, in the British Virgin Islands, with a capital of 100 thousand dollars, which Dagher owns half of the company’s shares, while the owner of the other half remained unknown, because the shares were registered in the name of the bearer. Michael Dagher, Ali Dagher, Nabil Zarour, and Iyad Abu Zeid managed this company.

Michael who got t Jordanian citizenship in 2010 manages another offshore company registered in the British Virgin Islands.

The controversial American Michael Dagher, the security deal hero, appeared in the Panama Papers. He is the founder of the MAD Securities Limited Company, in the British Virgin Islands, with a capital of $100 thousand dollars, which Dagher owns half of the company’s shares, while the owner of the other half remains unknown, because the shares were registered for their bearer.

Michael Dagher, Ali Dagher, Nabil Zarour, and Iyad Abu Zeid managed this company. Michael who got the Jordanian citizenship in 2010 manages another offshore company registered in the British Virgin Islands.

Businessmen in Panama

The brothers Khalid, Akram and Riad Shaheen appeared in the Panama Papers possessing together 45 offshore companies in the British Virgin Islands, with a capital of nearly three million US dollars.

Radio al-Balad has published in the first round the involvement of some of these companies in suspected of corruption which was observed by Jordanian courts.

Jordanian businessman Mahmood Zuhdi Malhas, owns full shares of four offshore companies, with a capital of 200 thousand dollars.

Malhas, authorized agent of Jaguar cars and others in Jordan, occupies number 10 in the list of the richest Jordanians, according to Forbes magazine of 2012.

Virgin Islands “safe tax paradise”, was sought by Mohammad Alayyan, the Jordanian business man, and publisher of Al-Ghad daily newspaper also, to establish an offshore company under the name Fresh Capital Holding LTD Company.

Alayyan owns half of the company’s capital, 50 thousand dollars, while the Kuwaiti Adel Al Ghanim, and the Syrian Bassam Taftaf owns the remaining half.

Mohammad Alayyan says to radio Al-Balad that this company was closed and did not work in Jordan; it was established to trade fruits, and the investment sources are funds belonging to the Kuwaiti Soma company and they are not Jordanian funds.

Maha Tabbaa, a Jordanian businesswoman who owns shares in Amman International Hotel, owns the lion’s share in seven offshore companies registered in the Virgin Islands.

Tabbaa is married to Mohammed Ismail Kurdi, the brother of Princess Basma’s husband, the controversial businessman Walid Kurdi accused in the phosphates case.

The name of the Jordanian businessman Jamal Wafai Dajani appeared in the Panama Papers and owns two offshore companies in the British Virgin Islands.

Dajani heads the board of directors of Kinz Company for Jordan trading in various projects.

Hania Sabawi, former General Manager of the United Cable Industries shareholding Company, founded nearly five months before her sudden resignation from the general management of the company at end of 2013, an offshore company under the name of SUPREME Estates limited in the British Virgin Islands.

Men of the two banks of the Jordan River

Panama Papers uncovered the names of officials in the Palestinian Authority and those close to them, who hold Jordanian citizenship, having offshore companies registered in tax havens. The Palestinian Deputy Prime Minister and former Minister of National Economy Mohammad Mustafa –holding the Jordanian citizenship-, appeared in the Panama Papers until March 2015, as director of the Arab Palestinian Investment Company (APIC) registered in the British Virgin Islands, the safe tax haven.

Tariq Abbas, son of Palestinian President Mahmoud Abbas also a Jordanian citizen and others are involved in this company.

Tariq contributes nearly with $1 million in this company, which operates in the Palestinian territories and Jordan.

Bank of Jordan: Panama welcomes you!

Bank of Jordan invested with the Arab Palestinian Investment Company (APIC) registered in the British Virgin Islands as an offshore company with a capital of $600,000 at its establishment.

The Bank of Jordan’s  investment came after the Iqbal Investment for Development Company transferred its shares, which amounted $600 thousand, to the Bank of Jordan, according to the registrar of companies. The evidence we received indicates that the Iqbal Company has a relationship with Tawfiq Fakhouri family which controls the Bank of Jordan’s management.In 2011, the APIC Company distributed 10% of its 2010 profits to the shareholders including the Bank of Jordan, and those profits were distributed as stocks, and the bank’s share was 42 thousand stocks.

Our investigative team looked at the annual financial reports of the Bank of Jordan for the years 2011 and 2012, disclosed to the Amman Stocks Exchange. This investment by the Bank of Jordan did not appear clearly in the APIC Company, which is registered as an offshore company.

Our team contacted the Bank of Jordan via telephone and fax, to get a response for the reasons of its investment to an offshore company, and why it does not appear in the financial reports, but we have not received any response.

Iraqis of Jordan

As we flipped over the names of Jordanian citizens in the Panama Papers documents we were surprised to see names of Iraqis within the file of Jordanian citizens. These were Iraqis who received Jordanian naturalization after the US occupation of Iraq in 2003.

Nameer Oqbi is an Iraqi businessman and the head of the Maco Group. He became a citizen during the period of the Mohamma Dahabi’s reign at the Jordanian intelligence service between  2005-2008. According to the Panama Papers, Oqabi is partner in about 20 offshore companies registered in the British Virgin islands and are being run from the Jordanian capital Amman.

Oqabi also participated in the companies set up by the controversial Jordanian businessman Khaled Shaheen in his company Iraqi Investment and Trade and sits on the board of ten Jordanian companies according to the records of the Jordanian companies.

Ali Fadel Shamara is the deputy director of the Iraqi Economic Council and is the first investor in electricity in Iraq after the US occupation in 2003.

Shamara has Jordanian citizenship and runs the Shamara Holding Company also registered in the British Virgin Islands as an offshore company with a capital of $14 million, according to the leaked Panama Papers documents.

Shamara’s son Hussein also has a Jordanian citizenship and is a shareholder in at least three Jordanian companies in addition to his shares in offshore companies registered in the Virgin Islands.

Faisal al Khoderi also headed to the Virgin Islands where he established two offshore companies in addition to being shareholder in Jordanian companies where he also has gotten citizenship as well.

Another Iraqi businessman is Ali Khawwam who owned 26% of the Iraqi Airlines in addition to his company Alia Transport and Trading. Khawwam resides in Amman and owns shares in various Jordanian companies while also owning UN International Limited a Virgin Island company, according to the leaked Panama Papers. Other Iraqis investing and residing in Jordan were also influenced to setup companies via Panama .

They are the Zain Iraqi Telecommunications company owned by Mohammad Jamal Jarjfji and Nashwan Bazzaz Khaldoun Al Anni and Mazen al Daftari (all holder of Jordanian citizenships).

The Absent government

The investigative team tried over an entire month to receive reaction from the spokesman of the government of Jordan the Minister for Media affairs Mohammad Momani. But all our efforts were in vein.

Radio al Balad/Ammannet had submitted an official request to the Prime Minister based on the Access to Information Law asking the government to reveal the names of foreign companies for which the government has contracted in the period 2006 till 2016 but the prime minister’s office chose not to respond.

Salah Mayytah of the Rashid Coalition states “there is a legal and an ethical responsibility on the government of Jordan and all monitoring agencies to investigate this issue and to explain its position to the public. It also needs to transfer to the judicial sector all those who there is sufficient suspicion that they have broken the law.” Mayytah explains that he is surprised at the absence of follow up “the government is delinquent. We have not heard until this moment any news of setting up a committee to follow up on the revelations of the Panama papers and this makes us astonished despite the fact that names of Jordanian businessmen and officials were mentioned and we worry that more names will be revealed in the future revelation.”

*This investigation was researched and produced by the Investigative Unit at Radio al Balad/Ammannet in cooperation with the International Consortium for Investigative Journalists and SZ Germany daily.

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