The Pandora Papers, unveiled on 3 October, is a trove of almost 12 million leaked documents shedding light on tax avoidance via secret offshore companies by some of the world’s elite. The data was obtained by the International Consortium of Investigative Journalists (ICIJ) working in collaboration with more than 140 media organisations.
An elite London solicitors’ firm serving Queen Elizabeth II throughout her reign has represented a politician accused by US prosecutors of corruption, reports The Guardian. While there’s no indication of wrongdoing or breaking the law, Farrer & Co, which boasts a long history of representing members of the royal family, finds itself in the crosshairs following the bombshell revelations laid bare by the so-called Pandora Papers.
After the International Consortium of Investigative Journalists (ICIJ) published the dossier of more than 11.9 million leaked financial documents, Farrer & Co’s legal representation of Abubakar Bagudu over the years has come to light.
The Nigerian politician has been accused by the US Department of Justice (DoJ) of playing an “instrumental role” in a corruption scheme that resulted in the plundering of billions of dollars from the coffers of West Africa’s most populous nation. Bagudu has consistently denied any wrongdoing.
International Treasure Hunt
After General Sani Abacha – Nigeria’s late military leader – died in 1998, the country’s new government accused him of having overseen a conspiracy to steal billions from Nigerian state coffers. According to corruption watchdog Transparency International, the ruler was estimated to have plundered as much as $5 billion of public money.
The general was never charged with corruption during his life, with Nigeria fighting for years to recover the money. As the hunt proceeded, the allegedly looted billions were traced to accounts in Paris and London via a chain of front companies. Bagudu, an associate of Abacha, in 1999 confessed to a Nigerian court that he had received funds from the general.
In 2003, after a court-approved settlement Bagudu agreed to return about $300 million of his fortune, albeit without admitting any wrongdoing.
According to the Pandora Papers, Farrer & Co started acting for Bagudu in February 2010. It’s claimed the company aided the Nigerian and his brother in transferring the ownership of €98 million (£113 million) from a British Virgin Islands (BVI) trust to a jurisdiction in Singapore and the Cook Islands called the Blue Group.
According to the leaked documents, the solicitors engaged the services of a trust company in Singapore – Asiaciti – to administer the newly-created group. Farrer & Co subsequently continued to be involved in managing the trusts. The law firm was cited by The Guardian as having conducted “extensive due diligence” on Bagudu and the result reportedly met the firm’s “legal and regulatory obligations.”
The newly revealed documents show that in April 2010, Farrer & Co sought a response from another firm representing Bagudu regarding their mutual client’s source of offshore wealth. At the time, the firm acknowledged that Bagudu had faced embezzlement charges in line with a criminal investigation and had been arrested and detained in the US for six months. However, Farrer & Co was also given assurances that Bagudu had reached a settlement with the Nigerian government. In line with it, he was granted the right to retain funds held in the BVI trust.
Furthermore, in August 2010, Farrer & Co is revealed to have submitted a suspicious activity report (SAR) to the UK’s Serious Organised Crime Agency (Soca). It sought consent to have assets held by Bagudu’s trust in the BVI transferred to the new Blue Group structure.
After a “detailed precautionary report of the transaction including the assets and their whereabouts,” the consent was granted, with €98 million of cash and securities transferred to the Blue Group, writes the outlet. It was then that some of the funds were directly channeled to Bagudu.
As for trust firm Asiaciti, an internal memo written by its head acknowledged the “somewhat controversial background” of the Nigerian but maintained him as a client. Farrer & Co and Asiaciti found themselves in a controversial position over their client in 2014 after the DoJ alleged that the Nigerian had helped General Abacha to “launder the proceeds of the conspiracy” via fake companies.
“The complaint alleges that General Abacha, his son Mohammed Sani Abacha, their associate Abubakar Atiku Bagudu and others embezzled, misappropriated and extorted billions of dollars from the government of Nigeria and others, then laundered their criminal proceeds through US financial institutions and the purchase of bonds backed by the United States,” reads a DoJ statement.
Soon after, UK authorities assisted US prosecutors in obtaining a court order freezing Bagudu’s assets in the country, estimated to be worth €107 million in investments. According to the Pandora Papers, as Farrer & Co represented Bagudu, the relationship generated revenues for Asiaciti estimated to be worth almost $80,000 (£60,000) in fees between 2017 and 2018.
Farrer & Co has been cited as dismissing any criticism for maintaining the Nigerian as a client, emphasising they never tried to conceal Bagudu’s assets, and had received consent from British authorities before transferring control of them to the new trusts.
The UK authorities were aware of the whereabouts of their client’s assets, said a spokesperson for Farrer & Co, adding: “Criticism based on subsequent events and allegations is misplaced and unwarranted.” Bagudu, similarly, did not violate any rules or laws by forming the trusts for assets he was allowed to retain as part of the 2003 agreement with the Nigerian government. The Nigerian’s lawyer was cited as saying there was no evidence of wrongdoing against her client in either criminal or civil cases. Trust company Asiaciti was cited as stating:
“We are committed to the highest business standards, including ensuring that our operations fully comply with all laws and regulations.”