Leaked corporate information can be a boon in asset-recovery – an offshore entity’s closely guarded ownership structure is suddenly laid bare. But an influx of confidential information into the public domain can also set other less helpful processes in motion.
Leaks often prompt a rapid redistribution of concealed assets to other offshore locations and structures. Whilst the paper trail exists and the leaked data presents a lead, the ‘pot of gold’ may be at least one layer deeper, presenting those chasing these assets with another obstacle towards recovery. Once out in the open, the information’s value may plummet.
The so-called Panama Papers were one of the most significant leaks in corporate history with records of over 214,000 companies making their way to the hands of the Süddeutsche Zeitung and the International Consortium of Investigative Journalists. Whilst this data is gradually being drip fed on the ICIJ’s website, thousands of low, medium and high profile clients, who believed their confidentiality was assured, have already been tipped off.
Nevertheless, leaks grant an unprecedented insight into the methodology behind a specific individual's web of trusts, nominees and intermediaries. This can offer an opportunity for 'templating' analysis, which assumes that tactics used in one structure will be used elsewhere. We use such analysis all frequently to determine beneficial ownership of assets.
If legal counsel can act quickly, it may also be able to capitalise on the new information before a counterparty has an opportunity to react, whether through disclosure orders or other mechanism.
In general, leaked information tends to maintain a strong residual value if it is considered in the context of a wider investigation or evidence gathering exercise.
Of course the question parties to disputes should be asking is who leaked the information and why. Therein the real value may be found.
Tom Hedegard is an Analyst at Raedas, having previously worked in the investigations sector in Russia and the UK focusing on the maritime and energy sectors.