It is a normal business practice in the shipping industry to create offshore special-purpose companies, as it allows the company to hedge against financial risks and recoup investments.

 

For example, STX Group has as many as 94 special-purpose corporations while Hanjin and SK Group have 79 and 59 respectively. A shipping industry official said, "It is customary to create one special-purpose company for each ship to build. People associating special-purpose companies with tax evasion is totally ignorant of the workings of our industry."

 

In addition, 85.5 percent of paper companies established by domestic groups were located in Panama, the country designated as a "whitelisted" tax haven last year by the Organization for Economic Cooperation and Development. In the past, Panama was one of the most favored tax havens for parking slush funds. But now the country is considered a legitimate place for financial transactions as it complies with international tax rules.