James Ball (The Guardian) writes that secret financial records link scandal-hit oil companies from China to dozens of Caribbean and other offshore entities, many of them undeclared. Here are excerpts with a link to the full article below:
China’s scandal-mired oil giants and their senior executives have made extensive use of offshore shell companies in the Caribbean, secret financial records reveal. The country’s biggest oil companies – Sinopec, PetroChina and the China National Offshore Oil Company (CNOOC) – are among the world’s largest businesses, but executives in the industry are embroiled in multiple corruption probes, many tied to networks of shell companies around the world.
Research by the International Consortium of Investigative Journalists (ICIJ) based on leaked financial records from the British Virgin Islands, reveal dozens of companies tied to the three oil giants, many of which are not disclosed on any publicly available filings by the businesses. [. . .] The records show a long history of offshore use by the oil businesses and executives, with incorporations in the BVI, Cook Islands, and related jurisdictions dating between 1995 and 2008.
One executive, Zhang Bowen, is listed in the ICIJ data as the only director and shareholder of Adept Act Enterprises Limited, active from 2006 to 2008. Last month, Zhang took over as chairman of Kunlun Energy, a subsidiary of CNPC, the Hong Kong-listed parent company of PetroChina.
The chief executive of CNOOC, Yang Hua, was similarly listed as the only director and shareholder of a BVI entity called Garland International Trading Company Limited. His colleague, Fang Zhi, vice-president of CNOOC International, was the director and shareholder of Xin Yue Lianping Company Limited and Xin Yue (BVI) Company Limited.
[. . .] China’s oil sector makes routine use of offshore jurisdictions, partly as a means to enable overseas investment, or to avoid often arduously bureaucratic restrictions in China or Hong Kong. However, offshore shells have also been linked to long-running corruption scandals. One report prepared by the Chinese government and released by the Bank of China suggested more than $120bn had been taken away from China since the 1990s – and indicated a large portion of this had been funnelled through the BVI and other offshore jurisdictions.
The report, written in 2011, said corrupt executives had managed to move money into their offshore shell companies through a variety of increasingly sophisticated means, including fake invoices for goods and services. It also noted that where once offshore work would be done in conjunction with foreigners, executives at China’s oil giants now had ready access to their own supply of shell companies.
[. . .] At least five executives from PetroChina, Zhou’s old firm, have lost their jobs, including former vice-president Li Hualin, who once served as Zhou’s private secretary. The company’s former chairman, Jiang Jiemin, who last year took a post overseeing the agency in charge of state assets, has also been removed from his government position. As yet, the probes into PetroChina, which are ongoing, have not been publicly tied to offshore use, but more details are expected to merge as investigations continue.
• Read the ICIJ’s full report of the latest offshore links.