About a third of Mossack Fonseca’s business was conducted on mainland, and the bulk of the work passed through the office run by Zhang Xiaodong
STUART.LAU@SCMP.COM
UPDATED : Sunday, 10 April, 2016, 1:16am
Zhang Xiaodong (left) appears in public in Xian. Photo: SMP Pictures
On the face of it, Zhang Xiaodong appeared to be a professional artist when he opened his photo exhibition, Obsessed in Havana, at a university in Xian last month.
Only his overly formal business suit might have offered a clue about his status as the businessman in charge of the pivotal Hong Kong operation of Mossack Fonseca, a Panamanian law firm that was to become the centre of an international tax-avoidance scandal implicating political leaders, wealthy businessmen and celebrities around the world.
Zhang – who is better known by his adopted Cantonese name, Austin Cheung – has for two decades been a core member of the company’s business in Hong Kong and on the mainland.
The firm is accused of helping relatives of past and present Chinese leaders set up offshore companies in an alleged bid to avoid paying taxes.
About a third of the Panama firm’s business was conducted on the mainland, with the bulk passing through the Hong Kong office, according to the BBC, which is part of the consortium of investigative journalists examining the Panama Papers.
Zhang joined the firm initially in its Panama City head office, staying there for a few years. His name first appeared on the Hong Kong branch’s list of directors in 1995, two years after it was set up. He moved to Hong Kong in 1997 and, in 2002, the office was rebranded as the Asia headquarters, of which he was president, Companies Registry records show.
One of his main targets then, according to Mossack Fonseca’s website, was to tap the increasingly outward-looking mainland market.
“Chinese offshore businesses are more likely to go to the Cayman Islands and Bermuda – for the purpose of stock market listings – as well as the likes of Seychelles and Mauritius,” Zhang wrote in 2009.
In an interview with China Economic Weekly in 2007, he suggested mainland companies set up offshore accounts amid “overseas countries’ hostility to the rising Chinese economic power”.
Zhang did not respond to repeated requests from the Sunday Morning Post for an interview. A receptionist at the Tsim Sha Tsui office, located in a modest Harbour City unit, said “the boss” was not there.
The latest official records showed Auckland in New Zealand as his address, while his WeChat account stated he lived in Southern district, Hong Kong.
Zhang’s personal life is no less interesting than the company he joined 20 years ago. In 2004, Zhang started his PhD studies on private international law at Wuhan University, according to his LinkedIn account. It took him nine years to graduate.
“It is highly unusual” for a PhD to be completed in such a long time, said Xu Yan, a Chinese University law academic who did her undergraduate degree at Wuhan University. Xu added that most PhD candidates complete the degree within three years.
Zhang turned high-profile in 2006 when he founded the China Academy of Wealth Planning and Management, which took the work of Mossack Fonseca to the level of international academic research. Its website was taken down several days ago.
Two Hongkongers were also with the academy, including University of Hong Kong tax law academic Lusina Ho and accountant Ronnie Choi Kwok-wai.
Choi refused to comment on Zhang’s business, citing ongoing investigations, but added: “He likes taking pictures a lot.”.
Zhang likes it so much he set up the China Photographic Publishing House in June.
Among the photo albums on his blog, one contained snapshots of Panama. The caption: “Heaven, an alias for Panama.”
http://www.scmp.com/news/hong-kong/law-crime/article/1934948/panamanian-law-firms-man-hong-kong
