In 2018, the son of the president of the island nation of Comoros was back home in the capital city of Moroni and looking to make a buck.
Nour El Fath Azali, a former bank auditor and American business school graduate, set up a shell company in the United Arab Emirates, according to records from the Pandora Papers investigation. The company, Olifants Ltd., offered consultancy and other advisory services.
Months later, Comorian President Azali Assoumani appointed his son as a personal adviser. The younger Azali now works to persuade Emirati officials to invest in the Comoros, a small cluster of islands off the east coast of Africa with a government that international observers say is plagued by systemic corruption.
Owning shell companies and bank accounts in the UAE, one of the world’s most secretive financial havens, is a growing trend among African politicians and their business allies.
“The UAE is the center of the world,” Nour El Fath Azali, 37, recently told ICIJ media partner La Gazette des Comores.
The Pandora Papers investigation discovered secretive Emirati financial interests of politicians and powerful business leaders from 17 African countries.
The Pandora Papers, a global media collaboration that exposes the hidden financial deals of the world’s rich and powerful, is based on leaked records from 14 firms that help set up shell companies and bank accounts. Among these so-called offshore providers is SFM Corporate Services, based in the UAE’s financial capital, Dubai.
“The UAE, de facto, tolerates illicit flows and trades that other more reputable international financial centers shun,” said Ricardo Soares de Oliveira, a University of Oxford professor who leads a research project on African countries and major financial centers, including Dubai. “In exchange for its acceptance that dubious players and monies be based in the country, the UAE merely asks wealthy Africans to stay out of local politics and stay within the boundaries of local law,” Soares de Oliveira said.
Those drawn to the UAE praise its light-touch approach to business regulation and its convenient time zone, between those of Europe and Asia. UAE companies often provide generous tax exemptions to foreigners, and owners aren’t required to open an office or disclose their names on public registers.
The UAE, de facto, tolerates illicit flows and trades that other more reputable international financial centers shun
— Ricardo Soares de Oliveira
Financial crime experts and tax and law enforcement officials, however, point to the UAE’s history as a conduit for corrupt proceeds.
The Persian Gulf nation has ignored money laundering for years, according to a 2020 report prepared by a team of international experts for the Paris-based Financial Action Task Force, the main international organization for coordinating global anti-money laundering efforts. The report noted that the UAE is reluctant to share information about the owners of companies created there with authorities in other countries.
Azali said, in response to questions from ICIJ, that he closed Olifants Ltd. in 2019 before it conducted any business and before he joined his father’s administration.
SFM declined to talk about specific cases, citing client confidentiality. In a statement to ICIJ, the firm said its activities are “absolutely legal in every aspect.” It said it follows the laws and regulations in the jurisdictions where it operates and it follows strict “Know Your Client” and “due diligence” processes when it takes on new clients.
“In the 15 years SFM has been operating, neither the company nor its employees/directors, have encountered any legal allegations,” it said.
Politicians worldwide, including many from Africa, have beaten a path to the UAE, according to the Pandora Papers and other media investigations.
In 2018, a newly elected member of Kenya’s Parliament, Tindi Mwale, emailed SFM in Dubai, paying $2,641 to set up a company called Sahel & Scott Holdings Ltd and a bank account in the island nation of Mauritius.
Mwale, who launched a real estate, engineering, consulting and construction conglomerate before entering politics in 2017, told SFM that he planned to build roads, bridges, sewerage systems and oil pipelines. He signed emails with his government title, including a reference to the western Kenyan region he represents in Parliament: “Hon. Tindi Mwale, M.P. Butere Constituency.”
Kenyan officials must declare to authorities their assets and wealth. In a brief telephone interview, Mwale denied owning an offshore company.
“I’ve never chosen any company outside of Kenya,” Mwale told an ICIJ reporter in a telephone interview over WhatsApp before blocking the reporter’s phone number. “I’m even surprised that you are pushing things that are lies.”
SOURCE : ICIJ
