Panama Papers: Africa’s richest man Dangote linked to offshore companies

The Panama Papers have claimed the first casualty in the Icelandic Prime Minister Sigmundur David Gunnlaugsson who resigned following protests after the leaked documents revealed his links to an offshore company, which allegedly had holdings in Iceland’s collapsed banks. Unlike the Icelanders, Africans have not had cause to stage street protests asking for a leader’s resignation. Some leaders in the 54-nation continent have been named as having links with offshore companies, including Nigeria’s Senate President Bukola Saraki. But less than 200 of the 11.5 million documents have been released, and so Africans must prepare for a rude awakening with every document released, involving an African name.

According to Nigerian online news platform Premium Times, which is one of the over 100 media partners that the International Consortium of Investigative Journalists (ICIJ) shared the documents with, the latest African name to have come up is the continent’s richest man Aliko Dangote, worth $17.3 billion, according to Forbes.

The leaked documents revealed that Dangote, his uncle Sayyu Dantata, as well as his business allies have over the years transacted businesses using shell companies registered in controversial tax havens.

In Panama, where Mossack Fonseca is headquartered, 13 shell companies registered by the firm are directly linked to persons and companies associated with Dangote and his allies. Seychelles, another well-known tax haven registered OVLAS S.A.in 2003, a company where Dangote and Dantata, who founded Nigerian oil firm MRS Holdings, bought shares of 12,500 each.

According to Premium Times, the documents showed that three years after their shareholding in the shell company registered in Seychelles, Dangote and Dantata ceased to be shareholders in the company. However, on the day they sold their shares, Dangote was issued 250,000 shares while Dantata was issued the same amount of 250,000 shares. M.R.S. Oil and Gas was issued 500,000 shares.

The Panama Papers further show that while Dangote was still a shareholder of M.R.S Oil and Gas Limited, he had bought shares in Petrowest S.A, another company registered in Seychelles on October 6, 2003. He did this together with Dantata and their company M.R.S. The deal followed the same pattern of the OVLAS S.A. deal and ended in similar fashion.

Surprisingly, the OVLAS shareholders filed for a change of name to Petrowest S.A. “This is to certify that OVLAS SA. has changed its name and is now incorporated under the name of PETROWEST S.A. on this 27‘” day of April 2011. Given at Victoria, Seychelles,” a document seen by Premium Times read.

A couple of offshore companies were also linked to Africa’s richest man in document, mostly in deals done together with Dantata. Both Dangote and Dantata have allegedly used their multiple companies in Nigeria and other countries to secure huge loans, usually evading repayment if possible. In 2010, the management of Nigerian lender Bank PHB (now Keystone Bank) sued Dantata’s M.R.S Holdings Limited over the non-payment of $58 million loan the bank granted it to purchase Chevron Texaco in 2008. At the time, Mr Sayyu Dantata owned a 75 percent stake in M.R.S., while Dangote owned the remaining 25 percent interest. Last year, another Nigerian lender Union Bank took over Dansa Foods, a subsidiary of the Dangote Group believed to be owned by Aliko Dangote’s younger brother Sani, after he failed to repay a loan of N4billion allegedly obtained from the bank about eight years ago.

Premium Times, in collaboration with its international partners unearthed more names of allies of the richest man in Africa. Among them are Aisha Dantata, Mariya Dantata, Ola Rosiji and Alex-Duduyemi Oyekunle.

Dangote has denied having any relationship with the offshore companies (Paseo Trading Ltd, Seychelles; Petrowest S.A.,Seychelles; SID Holdings Corp, Panama and Chalmers Shipping Inc, Panama) linked with it in the leaked documents.

“I wish to state categorically that neither Aliko Dangote nor Dangote Industries Ltd (DIL) has any form of relationship with these alleged four off shore companies. The Group has four quoted companies on the Nigerian Stock Exchange and we cannot afford to tarnish our reputation or conduct our business in an unethical manner given this profile,” Premium Times quoted Tony Chiejina, spokesperson for the Dangote Group to have said.

In the past few days, other popular Nigerian names have surfaced, including ex-Senate President David Mark and former Defence Minister T.Y. Danjuma.

German newspaper Süddeutsche Zeitung had obtained internal data of the Panama-based offshore-provider, Mossack Fonseca which covered the day-to-day business of the law firm over the past 40 years. The documents were given to SZ by a John Doe, who said he just wanted to make the crimes public. The newspaper analyzed the data in cooperation with the ICIJ.

Companies in Zimbabwe, Guinea and Uganda are among African entities in the leaked documents.

Mossack Fonseca has denied any wrongdoing.

But is offshore banking or shareholding in an offshore company illegal? A great breakdown was found on Reddit via The Guardian.