An internal call that would have forced President of the Court of Appeal, Justice Ian Kirby to declare his controversial investments through the questionable Panama based law firm Mossack Fonseca was rejected by the Administration of Justice ÔÇô Sunday Standard investigations have revealed.
As Botswana flounders in a grey area over recent unprecedented leaks listing Justice Kirby among prominent world leaders, politicians and celebrities who have hidden their wealth in secretive tax regimes, Sunday Standard can reveal that the Administration of Justice was so determined to keep a veil of secrecy over local judges assets that it set out to investigate how a secret internal document calling for judges to declare assets was leaked.
It has recently emerged that Justice Kirby has invested in at least seven offshore companies between 2005 and 2009, according to documents detailing the dealings of a questionable Panama-based law firm Mossack Fonseca.
The leak of millions of documents show the myriad ways in which the rich can exploit secretive offshore tax regimes.
The Sunday Standard is in possession of the confidential paper written by a Botswana High Court judge in July, 2012, calling on the judiciary to forge ahead and declare their personal interests and assets in a more formalized way.
In the paper a case is being made that the disclosure of personal interests by judges must be given priority if the impartiality and independence of the judiciary is to have any credibility in the public eye.
Instead of adopting the recommendations of the paper, a judges’ conference that was held in Mahalapye rejected it and went further to call for an internal investigation to determine how the paper had been leaked to the media.
In the paper entitled “Judicial Declaration of Registrable assets: Conceptual and Practical Issues,” Justice Michael Mothobi had among other things called for the establishments of the office Registrar of Assets that would be charged with the administration and monitoring of asset disclosure by members of the judiciary.
Such an office, argued Justice Mothobi in his paper should be endowed with investigative capacity to verify disclosure made to it and also be granted the power to impose appropriate sanctions for misrepresentations.
“For our part, we believe the office of the Registrar of the High Court possesses sufficient experience and administrative infrastructure to fulfill the duties of the proposed Registrar of Judges Interests, charged with administration and monitoring, investigative powers of verification and making recommendations to the Chief Justice or the Judicial service Commission for appropriate action.”
The paper envisaged a Committee that would deal with wrongful disclosure.
“From the judicial perspective, it is thought best that a Standing Committee should be established, to comprise the members who will be the two judges of the High Court and a judge of the Industrial Court, with the Registrar or one of his deputies as Secretary to the Standing Committee.”
In his paper Justice Mothobi argued that access to the public of the register must be limited.
“Given the fact that asset disclosure requirements for the judiciary may be construed as invasion of privacy, there need to be strict guidelines as to which information may be accessible to the public and which may not.”
He ended by saying that the extent of public access must be decided upon by the judges themselves.
“Under the jurisprudence the High Court has jurisdiction in an appropriate case to order the release or embargo of information in legitimate cases. It is proposed that the common law approach be retained.”
The paper suggested that all declarations so made should be under oath so as to empower the Standing Committee to take appropriate action in the event of misappropriation.
“Although we do not necessarily mean to say Botswana has become corrupt, it is beyond doubt, and rather unfortunate that the opportunities for corruption are more prevalent in today’s society and must be limited by the creation of more legislation. To this end, interest disclosure must be viewed as only a small part of the whole ant-corruption initiative.”
Justice Kirby has been named in a massive expose of offshore accounts of world leaders and influential people by the International Consortium of Investigative Journalists (ICIJ). Justice Kirby first appeared in documents sent by Mossack Fonseca as a shareholder of Bellbrrok estates limited in May 2005 while he was Attorney General. Bellbrook Estates limited carried out unspecified activities in the United Kingdom, according to the 2014 list of Mossack Fonseca of active companies for which it served as registered agent.
Although specific details of the offshore companies in which Justice Kirby held shares are not available, at least three of those BVI firms held properties, including commercial real estate in the United Kingdom.
ICIJ quotes justice Kirby in a response saying the companies were special purpose vehicles formed by a joint venture to acquire, develop and resell a particular property in the UK, as an investment. He said that he and his wife were persuaded to invest a portion of their savings in the companies in hopes of receiving a return on investment that would keep them ahead of inflation, investing the minimum allowed. “One or two have worked out, but most not, because the worldwide recession intervened. Overall we have lost out investments.”
He said they retain an interest in only two of the companies one of which they hope will allow them to recover their investment and the other of which they hope may provide a modest profit.
At the time of the leak in 2015 Mossack Fonseca communications showed that Kirby had already sold his shares in four of the seven entities, remaining a shareholder in three companies. This was confirmed by Kirby himself when confronted with these allegations.
Kirby told INK that his role in these companies is above board. He said that each of the seven companies were formed to buy, develop and later sell one property each in the United Kingdom. They were special purpose vehicles set up by a real estate agent active in Botswana, Pam Golding Properties. Kirby was but one investor. He claims that he redeemed his shares in four of the companies at a “considerable loss” on account of a weak real estate market and the world economic recession.
At present, Kirby retains shares in three companies: Jaye Limited, Beachleigh Holdings Limited and Allmonde Company Ltd. All three companies are registered in the British Virgin Islands, and Mossack Fonseca appears to have assisted in their registration, according to documents and emails seen by Ink Centre for Investigative Journalism.
There is little reason other than tax avoidance for a company doing business in the United Kingdom to be registered several thousand miles away in the Caribbean. According to Fair Tax Campaign, tax avoidance techniques for companies are all about location. This consists of where a company chooses to open offices and where it chooses to allocate its profits and expenses. “Companies wanting to minimise their tax bills shift their profits to subsidiaries where there is a low or zero tax regime, e.g. a tax haven.”
The British Virgin Islands is precisely such a haven. While tax havens are technically legal, the tide of respectable opinion has turned against their use. First, tax havens facilitate secrecy and secrecy allows malfeasance to be hidden. Second, countries who host the economic activity that produces income are deprived of taxes that could be used in those countries.
There is no suggestion in the leaked information that the companies Kirby invested in were specifically avoiding or evading tax commitments. However, a question does hang over the location of the companies’ registration, British Virgin Islands, and the law firm chosen to perform this registration, Mossack Fonseca. Kirby claims that he was not aware of the law firm, but says that he was aware the companies were run from Guernsey, an island declared a tax haven by the European Union.
Before being appointed Attorney General, Kirby was the senior partner at IS Kirby Legal & Taxation Consultants where, according to a legal commentator, his “experience as a lawyer was largely limited to representing corporations”. Corporations using the services of tax consultants typically seek to minimize the amount of taxes they pay while remaining legally compliant.
While this attitude is to be expected from a CEO charged with maximizing profits at every turn, it remains debatable whether it is becoming of judicial officers to be involved in companies if these take advantage of aggressive tax avoidance schemes. Just as drinking at taverns at all hours is a lawful activity, so is having an interest in a company registered in a tax haven.
However, a judicial officer is probably not expected to keep that sort of company. After all, the law has both a letter and a spirit and judges are expected to conduct their affairs so as to “sustain and enhance public confidence in the judiciary”, according to the Botswana Judicial Code of Conduct.
In reply to INK’s enquiries, Kirby pointed out that Botswana has no exchange controls, which means that there are no limitations placed on his moving funds offshore. Of course, he would have to pay tax in Botswana on any profits made, if he ever brought the funds back. There is no reason to doubt his assertions that the companies were used to buy and sell properties in the UK; a perfectly lawful activity.
However, this is not publicly available information. Nor are the names of his fellow investors publicly known or the fact that he invested heavily, over ┬ú140 000 (Over P2million), in the seven Pam Golding joint ventures.
If this information were to be publicly known, it would assist litigants to determine potential conflicts of interests arising from Kirby’s commercial dealings. Although his stakes in each company did not seem to rise above 2%, this value is still not so diluted or trivial so as to trigger the de minimis principle.
For example, should a large shareholder in the companies, Cannon Asset Management, or one of its directors, Adrian Cann, formerly of Deloittes in Botswana, be involved in a legal dispute serving before Kirby, their connection would not be known. This is not to suggest that such a connection would be covered up.
However, the value of transparency is that the public does not have to rely on the self-disclosure of a judge as to a conflict of interest. The judiciary’s interests are in the public domain and a strong argument exists that this transparency enhances the credibility of the legal system.