'Panama Papers' expose offshore fortunes of world leaders

Nearly 11.5 million tax documents have revealed an alleged network of offshore tax fortunes linked to world leaders and celebrities, including Russian President Vladimir Putin.

The documents, called "The Panama Papers" were obtained from an anonymous source by German daily Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ).

The leaked documents allegedly reveal how Panama based law company Mossack Fonseca helped clients launder money and dodge taxes.

According to the documents, 140 political figures - including 12 current or former heads of state - are involved in the alleged network. The leak constitutes 2.6 terabytes of data.

Former Egyptian President Hosni Mubarak, former Libyan leader Muammar Gaddafi and Syria's Bashar al Assad are among those who are allegedly involved in money laundering and tax evasion.

ICIJ Director Gerard Ryle said the documents reveal daily business practices of Mossack Fonseca over the past 40 years in more than 35 countries.

"I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents," he said.

He also said that Putin was not directly named in the documents but added that sources close to the Russian president "secretly shuffled as much as $2 billion through banks and shadow companies."

The Panamanian company has never been accused or charged with criminal wrong-doing.

Ramon Fonseca, the director of the law firm denied on Monday any wrongdoing, saying his firm has fallen victim to "an international campaign against privacy."

"We're dedicated to making legal structures which we sell to intermediaries such as banks, lawyers, accountants and trusts, and they have their end-customers that we don't know," he said.

"We believe there's an international campaign against privacy. Privacy is a sacred human right [but] there are people in the world who do not understand that and we definitely believe in privacy and will continue working so that legal privacy can work," he added.

Following the claims, Iceland's Prime Minister Sigmundur Gunnlaugsson is facing strong calls to resign, British newspaper The Independent reported.

The documents revealed that Sigmundur Gunnlaugsson purchased a company called Wintris in 2007 with his wife, however, he chose to hide the acquisition from the public after becoming an MP in 2009.

Former Finance Minister Steingrímur Sigfusson told the Guardian that Gunnlaugsson's actions made the country "look like a banana republic."

"No one is saying he used his position as prime minister to help this offshore company, but the fact is you shouldn't leave yourself open to a conflict of interest. Nor should you keep it secret," he said.

The Australian Tax Office (ATO) launched an investigation on Monday, implicating more than 800 wealthy clients of the law firm in possible tax evasion.

"Currently we have identified over 800 individual taxpayers and we have now linked over 120 of them to an associate offshore service provider located in Hong Kong," the Australian tax office said in a statement emailed to Reuters. It did not name the Hong Kong company.

ATO Deputy Commissioner Michael Cranston said his office was working with the Australian Federal Police, the Australian Crime Commission and anti-money laundering regulator AUSTRAC to clarify the presence of any wrong-doing.

"Some cases may be referred to the Serious Financial Crime Taskforce," Cranston said in the statement.

"The message is clear - taxpayers can't rely on these secret arrangements being kept secret and we will act on any information that is provided to us."