Billionaire Arnon Milchan, a witness for the prosecution against former Prime Minister Benjamin Netanyahu, kept part of his fortune and art collection in companies in the Virgin Islands as a tax dodge, the leaked Pandora Papers show.
According to the leaked papers, Milchan’s holdings in the tax haven are worth almost half a billion dollars. Milchan is a witness in one of the three corruption cases for which Netanyahu is being tried, this one dealing with lavish gifts from wealthy acquaintances, allegedly given in exchange for political favors.
The Pandora Papers, a leak of nearly 12 million files obtained from 14 offshore companies around the world, revealed that hundreds of powerful people were concealing investments to dodge taxes. Milchan, whose fortune is estimated by Forbes Magazine at $3.5 billion, is mentioned several times. Documents submitted in 2016 because of a regulatory change in the Virgin Islands’ policy show that Milchan is the ultimate beneficial owner of seven offshore companies, most of which were founded in the early 2000s. While the timeline is unclear in the documents, but it appears that for years, at least some of them were shelf corporations – meaning that they were established and then became inactive. An analysis of correspondence relating to those companies shows that some of them became active only in mid-2013.
The companies held a huge amount of property. For example, in 2016 the Century Mark Company Limited possessed art and antiques worth almost $453 million. Fairway Isle Limited owned a prestigious Manhattan apartment worth $7.6 million, purchased from Rupert Murdoch’s family, and had $630,039 in its bank account. Widesands Limited had real estate in Malibu, California, worth about $4.5 million, and more than $300,000 in its bank account. The companies are also mentioned in other papers in 2017-2018, in connection with the replacement of the local agent who handled their affairs.
Milchan is a witness in the trial of Netanyahu, who has been charged with fraud and breach of trust. The indictment says that in the summer of 2013, Milchan asked then-Finance Minister Yair Lapid to extend returning Israeli citizens' exemption from taxes and from the requirement to report to the tax authorities. Lapid refused and Milchan took the matter up with his friend at the time, Netanyahu.
“Following Milchan’s request, the defendant Netanyahu raised the issue of extending the exemption granted to returning residents with Lapid in two work meetings,” the indictment says. “At these meetings, the defendant Netanyahu made it clear to Lapid that Milchan had discussed the matter with him. The defendant expressed to Lapid his support for extending the exemption, while Lapid said he didn’t think it should be extended.” Milchan was not charged in this affair.
The Pandora Papers were leaked to the International Consortium of Investigative Journalists, which shared them with some 600 investigative journalists from 117 countries and with dozens of media outlets, including the Washington Post, the Guardian, Le Monde and others. The Israeli partner in the project was the Shomrim site, by means of journalists Uri Blau and Daniel Dolev.
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Milchan did not answer a request to respond to this report.