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Son of Chinese Leader Threatens Suit Over Panama Papers Allegations

FILE - Former Chinese Communist Party General Secretary Hu Yaobang.
FILE - Former Chinese Communist Party General Secretary Hu Yaobang.

The son of China's late reformist leader Hu Yaobang on Monday rejected news media reports that he used his father’s Beijing address when registering an offshore company in 2003, threatening to sue any media outlets that continue reporting on allegations disclosed in the so-called "Panama Papers."

Hu Dehua told Hong Kong media he has nothing to hide. Calling registration of his British Virgin Islands-based entity Fortalent International Holdings "above board," he said the company was created in his own name and with his own passport.

"I came back and checked the registration documents, and I can assure you the registered address is not what they reported as 'General Secretary Hu Yaobang's courtyard residence,'" he told VOA's Mandarin Service Monday, referring to his family’s home address in Beijing where Hu Yaobang lived while leading China's Communist Party.

In order to protect his family's reputation, Hu said he is reserving the right to challenge in court false assertions by news media outlets.

“The media and news agencies who make up this lie must come up with evidence, or I will reserve my legal rights, because their reports have seriously insulted and vilified the former general secretary of the Communist Party Central Committee and myself," he said. "They must be held responsible for the serious consequences of their mistakes and they must make a public apology and provide a satisfactory compensation."

Hu also quoted Hong Kong reporters who called him “the first and only Chinese who dared to make a loud response” to allegations of possibly illicit offshore investments. "The fact is, any normal Chinese, even foreigners, can register a company in Hong Kong," the city in which he was living when he founded the offshore company. "I believe that is their right, and that includes me.”

Taboo topic

From relatives of the founding father of the People's Republic of China, Mao Zedong, to current leader Xi Jinping, the massive data leak from a Panamanian firm has revealed that offshore holdings are common among the families of China's ruling elite. Among the more than 11 million documents are details about the offshore holdings of relatives of at least nine current and former Politburo Standing Committee members, a powerful political body in China.

While having an offshore company is not illegal, such offshore businesses can be used to launder money and evade taxes. Massive wealth accumulated by the families of China’s ruling party members has long been a big concern in China, but also a topic on which discussion is tightly controlled.

In recent weeks, China has stepped up censorship of any online coverage or conversation about the Panama Papers, which were disclosed by the International Consortium of Investigative Journalists (ICIJ). That group says the documents show banks, law firms and other offshore players often fail to follow legal requirements to make sure their clients are not involved in criminal enterprises, tax dodging or political corruption.

Chinese censors have been deleting social media threads about the leaks, and “Panama” is now one of the most censored words on the Chinese internet.

Corruption crackdown

The massive leak comes amid President Xi's high-profile campaign against corrupt officials, in which he has publicized some prosecutions in state media as evidence that the Communist Party is serious about punishing graft. Some critics say Xi's crackdown, which has netted more than 30,000 people, is merely a convenient way for political leaders to banish their enemies.

The ICIJ says its analysis of leaked records indicates that by the end of 2015, Mossack Fonseca – the law firm at the center of the document dump – was collecting fees for more than 16,300 offshore companies from China and Hong Kong, accounting for 29 percent of its business worldwide. Hong Kong is the company’s busiest office in the world.

This report was produced in collaboration with VOA's Mandarin Service.