CAIRO: Alaa Mubarak, the son of former President Hosni Mubarak, is implicated in a money laundering case in the British Virgin Islands (BVI), revealed the leaked Panama Papers Sunday.
Alaa is the owner of a company named Pan World Investments that was incorporated by Mossack Fonseca for legal services and managed by Credit Suisse group. But when he and his ousted father and brother, Gamal, were arrested over corruption charges, British Virgin Islands authorities asked for freeze Alaa’s company assets per European Union decision in 2011, according to a leaked file.
The Panama Papers consist of 11.5 million files leaked originally obtained by German newspaper Süddeutsche Zeitung through an anonymous source, and published on the International Consortium of Investigative Journalists (ICIJ) talking about offshore financial records for world leaders, politicians, and celebrities set up by Panamanian law firm Mossack Fonseca.
Mossack Fonseca failed to “identify Alaa as a high risk customer,” and was subsequently fined $37,500, and the firm has admitted that “its procedures were ‘seriously flawed’”,” the file said.
Per a letter from Mossack Fonseca to the BVI Financial investigative Agency May 30, 2013, Pan World was owned by Alaa and its address was registered in Bahamas Financial Center, saying that “we do not have information about any bank accounts or assets held by the Company.” The letter included a copy of Alaa’s passport.
Credit Suisse group said investing in Pan World by HIG Venture Fund investments did not “contravene Switzerland’s freeze on Mubarak’s assets.” The investigative agency made an additional probe into the company and the Mossack Fonseca in 2014, and the Company employees admitted that “further breaches” had taken place and resigned as its agent in April 2015, according to the leaked files.
“The documents show that banks, law firms and other offshore players have often failed to follow legal requirements that they make sure their clients are not involved in criminal enterprises, tax dodging or political corruption,” ICIJ reported Sunday.
The files include names of around 15,600 paper companies that banks set up for clients to keep their finances secret, the report added.
“Mossack Fonseca’s fingers are in Africa’s diamond trade, the international art market and other businesses that thrive on secrecy. The firm has serviced enough Middle East royalty to fill a palace. It’s helped two kings, Mohammed VI of Morocco and King Salman of Saudi Arabia, take to the sea on luxury yachts,” the report continued.
Mubarak and his two sons were convicted in Jan. 8 of seizing public funds worth 125 million EGP ($16.38 million,) which had been allocated for the upkeep of the presidential residences between 2002 and 2011. Mubarak received a three-year imprisonment sentence and his sons, Alaa and Gamal, were handed four-year sentence each. The two sons are out of jail as they served their terms since they have been remanded in 2011.
Alaa and Gamal, along with seven business tycoons, were charged in May 2012 with insider trading as they illegally acquired a share from the governmental National Bank of Egypt via an offshore company located in Cyprus, said Egyptian investigations.