Eight current and former members of the Politburo Standing Committee, the country’s top decision makers, have relatives with secret offshore companies
For months, Gu Kailai worried about a secret that threatened to upend her comfortable life and stop her husband’s climb to the top rungs of China’s political leadership. So she took action.
In a hotel room in the southern Chinese megacity of Chongqing, she mixed tea and rat poison in a small container as Neil Heywood, a British business associate, lay drunken and dazed on the hotel bed.
Then she dripped the mixture into Heywood’s mouth.
Hotel staff found his body two days later.
Gu eventually confessed to the 2011 crime. She had been driven to murder, she said, by Heywood’s threats to expose a dark secret: millions of dollars in real estate held in an offshore account on the other side of the world.
If Heywood revealed that she had used a company in the British Virgin Islands to hide her ownership in a villa in the south of France, she figured, the scandal would jeopardize the accession of her husband, Bo Xilai, to the Politburo Standing Committee, a body of fewer than 10 men that stands at the apex of political power in China.
Just over two weeks after the murder — in a previously unknown postscript — the ownership structure of Gu’s offshore company suddenly changed. Her shares in the company were transferred to another business associate, perhaps in an effort to further obscure her ties to the company or to make it easier for the trusted associate to act swiftly as events unfolded, a trove of secret records shows.
In the end, nothing could hide Gu’s secrets. Her pursuit of offshore anonymity ended in death for Heywood and prison for her and her husband — and added more fuel to longstanding concerns about how members of China’s elite use tax-haven hideaways to conceal their wealth.
The leaked documents that provide fresh details about Gu’s overseas dealings also reveal a wealth of new information about the offshore holdings of the families of other powerful Chinese.
China’s “Chairman of Everything”
The documents reveal that Xi Jinping, China’s “Chairman of Everything,” — his titles include president, Communist Party chief and military chief — has a brother-in-law who has had companies in tax havens.
Relatives of at least seven other men who have served on the tiny Standing Committee — including two members currently serving with Xi — also have offshore holdings, the records show.
One of these relatives is a grandson-in-law of the late Chairman Mao Zedong, the founding father of the People’s Republic of China.
It is no secret that many of the children and grandchildren of China’s revolutionary heroes have found success in the business world. China has the world’s second largest economy and has hundreds of billionaires. But the extent to which some of the country’s most politically connected have tapped offshore networks to keep their assets hidden from the public eye is not well known. And the mechanics of how they do it is little understood.
The cache of documents was obtained by the International Consortium of Investigative Journalists, the German newspaper Süddeutsche Zeitung and other media partners. The records — more than 11 million documents in all — come from the files of Mossack Fonseca, a Panamanian law firm that sells shell companies and other offshore structures to customers who want to keep their finances private.
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