the crucial role of audit and consultancy firms in the financial abuse of Isabel dos Santos

The Isabel dos Santos case highlights the constellation of audit companies, attorneys or consultants accused of generally turning a blind eye to the doubtful origin of their shoppers' fortunes, specifically the “Big Four”, the 4 largest accounting companies on this planet. This new scandal reveals how tons of of corporations, “many being primarily based in tax havens just like the British Virgin Islands, have been utilized by Isabel dos Santos to grow to be the richest lady in Africa whereas tens of millions of Angolans reside in excessive poverty“, denounces the NGO International Witness.

The International Consortium of Investigative Journalists (ICIJ) unveiled on January 19, 2020 a sequence of paperwork describing the monetary preparations put in place by the daughter of former Angolan President Jose Edouardo dos Santos for, he mentioned, “siphon cash from public corporations within the nation“. These paperwork referred to as “Luanda Leaks” illustrate specifically the position of “facilitators” performed by the big accounting companies, which all labored for the Santos dos at one time, notably PricewaterHouseCooper (PwC), KPMG, EY and Deloitte. Based on the consortium's investigation, these corporations in addition to consulting corporations comparable to Boston Consulting Group (BCG) or regulation companies “circulated cash, audited accounts, created entrance corporations, urged methods to keep away from taxes by ignoring pink flags“, writes the ICIJ.

BCG and KPMG didn’t reply to requests for remark from AFP. EY says it respects the regulation and doesn’t communicate to its prospects for confidentiality measures, as does Deloitte, who remembers “cease working for Finstar“, a satellite tv for pc tv firm through which the Santos dos had invested.

However, PwC, notably challenged by the Luanda Leaks reacted by saying “instantly launch an inner investigation“and finish”all work for entities managed by the dos Santos household“. Heads might begin to fall on account of the revelations. So,”resignation of PwC supervisor for Angola and Portugal Jaime Esteves might be simply the beginning of an in-depth re-evaluation of enterprise ties with Isabel dos Santos“mentioned Alex Vines, analyst on the Chatham Home think-tank.

Ms. Dos Santos, who’s the topic of an investigation by the Angolan justice system, which has blocked her native accounts and property, describes these accusations as politically motivated lies by the federal government of João Lourenço, the person who succeeded his father on the head of Angola. It fully denies any wrongdoing.

The ICIJ notes that Ms. dos Santos, as “politically uncovered persona“ought to have, as required by European regulation, be assessed by audit and regulation companies to detect attainable indicators of corruption or conflicts of curiosity. Most western banks, topic to extra stringent guidelines than these companies, have additionally refused to work for Ms. dos Santos, notes the ICIJ.the pink flags appeared when she was appointed director of“Sonangol, the state-owned oil firm in Angola, notes Daniel Bruce, managing director of Transparency Worldwide UK, interviewed by AFP. It’s in any case the most recent scandal up to now for a sector which counts quite a bit. Enron bankruptcy and the position performed by Arthur Andersen who had validated his falsified accounts sounded the loss of life knell for the “Large 5” on the daybreak of the 2000s. In the UK, these audit companies are additionally criticized for having licensed the accounts of teams that collapsed with out performing, such because the division retailer chain BHS, the development group Carillion or tour operator Thomas Cook.

The position of actual property brokers or different intermediaries who enabled Ms. dos Santos to accumulate three luxurious properties in London or a yacht can also be denounced by the consortium's investigation. A report from the NGO Transparency Worldwide in October already pinned the jewellery, racing automobiles and different luxurious properties concerned in the dirty money laundering circuit transiting through the United Kingdom.

Lastly, regulation companies “essential in Portugal“, a former colonizer from Angola, are accused by the ICIJ of getting helped Ms. dos Santos to create entrance corporations in tax havens like Hong Kong or Mauritius, which make it troublesome to hint funds and cooperate loosely or in no way with the authorities of different international locations. In Lisbon, a Portuguese banker, focused by the Angolan justice within the context of the investigation into Isabel dos Santos, was discovered useless at his house the place he would have most likely dedicated suicide, we realized on January 23, 2020 from the police.

“In too many locations just like the British Abroad Territories, it’s nonetheless too simple to arrange nameless corporations, place suspicious fortunes there, and use them to purchase luxurious properties or items“by thus laundering these funds, denounces International Witness. There are”lack of utility (UK anti-corruption and cash laundering legal guidelines) and no credible incentive to verify the checks are achieved“provides Daniel Bruce. For Tax Justice Community, so long as there isn’t a international adherence to anti-money laundering requirements, corruption and breaches of tax obligations can be tremendous.