Nicholas Jones is a New Zealand Herald political reporter.

Cooks firm named in global tax haven web

Photo / Thinkstock
Photo / Thinkstock

A company established in the Cook Islands by a New Zealand lawyer is at the centre of a global investigation which has exposed the identities of thousands of people putting money into secretive overseas hideaways.

A trove of leaked documents, 160 times the size of WikiLeaks' cache, has revealed a worldwide web of tax havens hiding the funds of the elite.

More than 2.5 million files were leaked to the International Consortium of Investigative Journalists (ICIJ) and detail overseas holdings in more than 170 territories.

Those named as using the havens include powerful politicians, US dentists, Wall St traders, Russian executives and international arms dealers.

In reporting its 15-month investigation, the ICIJ noted that much of the activity highlighted was legal.

Much analysis centred on two major incorporation firms, one being Portcullis TrustNet.

TrustNet was founded by Mike Mitchell, a New Zealand lawyer who worked as the Cook Islands' Solicitor General in the early 1980s.

In 2004 it was sold to a Singapore lawyer who merged it with another overseas company, Portcullis Group.

Today it is headquartered in Singapore with offices at other locations including the Cook Islands and Samoa.

According to ICIJ, one trust holder was Tony Merchant, a top Canadian class-action lawyer and the husband of Canadian senator Pana Merchant.

Mr Merchant had more than US$1 million ($1.18 million) in the trust, ICIJ reported. It said documents showed that between 2002 and 2009 he often paid fees to maintain the trust by sending thousands of dollars in cash and traveller's cheques stuffed into envelopes.

One file note on the ICIJ website warned TrustNet staff Mr Merchant would "have a st[r]oke" if they tried to communicate with him by fax.

A message on Portcullis TrustNet's website said the company was confident its business activities were legitimate and lawful. "We take a serious view of unauthorised disclosure of any confidential information. We are looking into the matter."

Mr Mitchell could not be reached for comment.

The ICIJ's exploration of offshore activity began after a computer hard drive - containing 260 gigabytes of information - was posted to its director, Australian journalist Gerard Ryle.

- NZ Herald

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