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According to reports, the family trusts of Malaysian businessman Low Taek Jho are the direct owners of assets including a Bombardier private jet valued at $49 million, a hotel in Beverly Hills and a $55m Los Angeles mansion. According to the US Department of Justice these assets were acquired with part of $5 billion misappropriated from the Malaysian state.
The release of the Panama Papers highlighted New Zealand's attractiveness as a haven for offshore trusts, which are used to hide the ownership of assets and legitimize funds.
Current trust regulations make it challenging to gather hard evidence about the workings and magnitude of these instruments as supporters of the status quo. The initial reaction to the Panama Papers was that New Zealand’s attractive regulations had not spawned a corrupt trust environment.
There continues to be new evidence emerging of New Zealand trusts being used to protect offshore assets gained through grand corruption. Court documents and media reports about the court appearance off Malaysian businessman Low Taek Jho's family offers a rare glimpse into the workings of New Zealand offshore trusts.
The family of Malaysian businessman Low Taek Jho appeared in an Auckland court on 20 February 2017 petitioning to replace the trustees of several of their trusts.
The trusts contain assets being seized by the United States’ Department of Justice as part of an investigation into the scandal-tainted 1Malaysia Development Berhad (1MBD) fund. More than $US3.5 billion (NZ$4.9 billion) was allegedly misappropriated. The trusts in question contain about NZ$368 million in assets, ranging from a private jet to American mansions.
Interestingly, the trustees being replaced included the Swiss based Rothschild and Auckland's Cone Marshall, both with ties to Mossack Fonseca and the Panama Papers. They declined to fight United States authorities out of concern for their liability in the face of the tougher international money laundering regulations in that country.
TINZ avoids involvement in specific cases of corruption and our knowledge of the merits and proceedings of this case is from news articles and online publications about it. What is important is that this is a documented example of Grand Corruption landing on our shores. New Zealanders owe it to themselves and the world to prevent continued use of our system in the hidden ownership shell game.
For more details, there are a number of well researched articles including: