After tarnishing world leaders from Russia to China, the so-called “Panama Papers” has now ensnared the fashion world.
According to a perusal of the list and press reports, the bold-face names added to the growing list on the Panama Papers now include Valentino Garavani and business partner Giancarlo Giammetti; London-based designer Roksanda Ilincic; Rattan Chadha, founder and former chief executive officer of Mexx; media mogul David Geffen, and Mohan Lal Lohia, chairman of textile firm Indorama Corp.
In a separate, older and larger database of offshore business connections from the same investigative journalism group is Joseph Nakash, cofounder of Jordache Enterprises, owner of Jordache Jeans.
According to reports in Italy and the U.K., Garavani and Giammetti, as well as Ilincic, all have interests in companies for which Panama City-based law firm Mossack Fonseca did some work.
According to Italy’s weekly L’Espresso, the law firm “managed some reserved transactions” for Garavani and Giammetti. L’Espresso states that Giammetti’s offshore entity is called Jarra Overseas SA, and that it was registered in 2004 in the British Virgin Islands. “For Valentino, the question is more complex. There is a company, also established in the British Virgin Islands on the same date as Jarra: it is the Paramour Finance Ltd., capital $50,000. But who hides behind this screen? Because for Paramour there is no clear ascription as for Giammetti,” reports L’Espresso, adding that Paramour was closed in 2013.
Both Garavani and Giammetti had been investigated for alleged tax payment evasion in reference to the fiscal years 2000 to 2006, the weekly states. As reported, the matter was settled for an undisclosed sum. L’Espresso claims that Jarra Overseas and Paramour Finance were part of the investigation.
The designer and his partner have been residing in London since the sale of the Valentino company to the now-defunct Holding di Partecipazioni Industriali in 1998. A spokeswoman said both Garavani and Giammetti declined comment.
According to a report in The Guardian newspaper in London, Ilincic is part-shareholder in a British Virgin Islands company, Greenland Property Ltd., with her husband Philip Bueno de Mesquita.
A spokesperson for Ilincic said the designer “does not avoid tax or obscure ownership of her assets. Indeed, she is taxed in the U.K. on her worldwide income and gains, subject to any double taxation treaties in place with the U.K. Revenue.”
The spokesperson added that Greenland Property is a dormant company with no assets. The Serbian designer’s fashion company is registered in the U.K.
Regarding Chadha and the fate of Mexx, the businessman sold the apparel chain to Liz Claiborne Inc. in 2001 for more than $260 million. The retail brand was then sold by Liz Claiborne in 2011 to the Gores Group. The chain went bankrupt three years later, and early last year the brand was picked up Eroglu Holding, a Turkish firm that also owns Loft jeans. The company operates a number of stores as well as a e-commerce site employs more than 3,600 people.
In the separate database of offshore connections compiled by the ICIJ and released prior to the Panama Papers, more than a dozen members of the Nakash family were cited, which includes Jordache Enterprises cofounder and real estate executive Joseph Nakash. Jordache Jeans were launched in the late Seventies. The company grew as the jeans gained sales, and the founders used the money to buy a 50 percent stake in Guess Jeans from the Marciano Brothers, which later ended in a messy court battle and settlement.
Recently, the company has been in the midst of launching the Jordache Legacy collection aimed at department stores. Jordache Enterprises includes Jordache, U.S. Polo Assn., Dittos, Xoxo, Jetlag, Earl Jean and Private Label. The company also has businesses in real estate, aviation, television and agriculture.
According the ICIJ database, Nakash lists Jordache Enterprises in New York as his business address but is connected to offshore entities that include Iron Will Group Ltd., Blue Jeans Ltd., and MG Overseas, among others.
In a statement, the company said the “Nakash family manages various companies that do business in many countries of the world. These companies are involved in apparel, hotels, aviation, maritime and real estate. They employ thousands of people in countries abroad. All are in compliance with local and United States law.”
The Panama Papers is a trove of confidential documents providing information about offshore companies for which Mossack Fonseca did work. The papers were sent anonymously to the ICIJ.
Just because a person’s name is on the list does not imply any laws were broken. The ICIJ stressed that “there are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any persons, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly.”
Still, publication of the list has created political firestorms in many of the world’s leading luxury markets, including Russia, where associates of President Vladimir Putin are on the list, and China, where family members of President Xi Jinping are listed. In the U.K., Prime Minister David Cameron has been criticized for an offshore account set up by his father, while in Iceland, Prime Minister Sigurdur Ingi Johannsson has stepped aside as a result of the scandal.
Celebrities on the list include Simon Cowell; Sarah Ferguson, Duchess of York; Jackie Chan; Heather Mills, former wife of Sir Paul McCartney, and Sir Mark Thatcher.
Publication of details from the papers has enraged citizen advocates worldwide, who have been targeting tax havens and the people and businesses who use them, saying they should be paying their fair share. In the U.S., tax rates are comparatively lower, which is why so few Americans have appeared among the ranks. But the release of the Panama Papers has triggered some policy considerations.
The U.S. Treasury Department revealed several regulations this past Tuesday designed to make it more difficult for American companies to buy up foreign firms and move their headquarters overseas, a move known as corporate tax inversion. The rules caused pharmaceutical giant Pfizer to drop its $150 billion tie-up with Botox-maker Allergan and move operations to Dublin.
The pending legislation would limit the leeway that states like Delaware currently use to allow corporate secrecy.