Following the largest online leak in history, politicians and celebrities alike have been exposed, citing hidden financial dealings of either themselves or their relatives or close friends. Those named include the Chinese President Xi Jin Ping, Pakistani Prime Minister Nawaz Sharif, Malaysian Prime Minister Najib Razak among many others.
The 2.6 terabytes leak included over 4.8 million emails and 3 million database files has revealed how many of the world's elites are stashing money away in tax havens such as Panama, but it would be wrong to say that everyone named in the Panama Papers has committed tax frauds or other crimes.
Cho Pei Lin, managing director of Asia PR Werkz told Marketing:
It is unfair for individuals to have their reputation tarnished for setting up offshore structures, especially when it is a common practice for many legitimate businesses and is not an illegal act.
Nevertheless, it is certain that an association to the saga is outright damaging in the eyes of the public.
Well-known public figures such as Jackie Chan and Lionel Messi have also been named in the leak, both for owning companies that were represented by Mossack Fonseca, the law firm from where the documents leaked.
According to The Straits Times, Messi has threatened to slap a Spanish newspaper with a defamation suit after the publication accused him of "setting up a tax fraud network" by using a shell company represented by Monsack Fonseca.
For those who have been linked to this Panama Papers exposé, having their personal financial records and dealings revealed to the world can provide them with grounds to sue those responsible for the leak.
However, in a situation where perception greatly matters, is taking an aggressive stance through lawsuits a recommended course of action?
Cho of Asia PR Werkz believes legal actions can be necessary. "Defamation lawsuits and other legal actions are sometimes necessary for such individuals or companies to state their innocence on record and to put a strong case forward that they have been defamed. Taking such legal actions strongly supports their claims of innocence and makes a convincing case in the court of public opinion," said Cho.
"Of course, they must indeed have legitimate reasons for setting up the offshore structures and not be found subsequently involved in illegal transactions," she added.
Additionally, there are other steps to be taken in response to such crises, according to Lars Voedisch, managing director of PRecious Communications.
Voedisch told Marketing that while this case can be looked at from a legal perspective, those who are named need to address it as a moral one too, as their image and brand could be at stake.
He agreed that legal actions can be taken if individuals feel that they are wrongfully accused, but they first have to speak on the facts to minimise room for public speculation.
"If you're under fire, in this case or others, it's all about getting it right, getting it fast, and getting it out. Clarify the situation and possibly make decisions like apologising for any wrongdoing if necessary and share it externally," said Voedisch.
Clarifying the situation using facts is the key, and it is important that those named do not attempt to hide or lie, which could make matters worse.
An example to look at, as Voedisch mentioned, could be Maria Sharapova's doping incident. The athlete had addressed the matter directly and fast, which allowed her to control how the story was told as she left little to speculation.
Meanwhile, Mossack Fonseca has come up with a detailed statement clarifying its stand on the matter. According to the law firm, the reports rely on supposition and stereotypes, and play on the public’s lack of familiarity with the work of firms like theirs.
On tax evasion, it reads: "Our company does not advise clients on the structuring of corporate vehicles and the use they may make of them We likewise do not offer solutions whose purpose is to hide unlawful acts such as tax evasion. Our clients request our services after being duly advised by qualified professionals in their places of business. Moreover, it should be made clear that tax avoidance and evasion are not the same thing. For example, a client can use the structures provided by us for tax optimization of his/her estate, such as taking advantage of provisions in treaties for avoiding international double taxation. Such behavior is perfectly legal."
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The writer is Wong Jeng Teng, currently an intern at Marketing Magazine Singapore.