Special Report: Offshore Trust Linked To Mandela

Late Mandela

Details about an offshore trust linked to former South African president Nelson Mandela have emerged from the Paradise Papers, a trove of financial records from the offshore law firm Appleby.



The MAD Trust, believed to short for Mandela’s clan name, Madiba, was set up in 1995 in the Isle of Man, a British dependency in the Irish Sea. The previous year, the anti-apartheid revolutionary Mandela became South Africa’s first post-apartheid president.

The trust existed in near-total secrecy until 2015,  more than one year after Mandela’s death, when lawyers representing his estate contacted Appleby to try to wrest control of its million-dollar bank accounts.  A summary of the case contained within an Appleby spreadsheet from the Paradise Papers labeled the case “HIGHLY CONFIDENTIAL.”

On one side, Mandela’s estate argued that the trust and money it held belonged to the former president. On the other, Mandela’s one-time friend, lawyer and MAD Trust administrator said the money was for charity, not Mandela.

The lawsuit underscores the shadowy ownership rules of offshore trusts, popular entities often used to manage personal wealth or hide money from creditors, former spouses or courts.

In 2015, lawyers for Mandela’s estate filed a lawsuit in South Africa against the late president’s estranged former lawyer, Ismail Ayob, to force the money’s return.

Ayob created the MAD Trust without Mandela’s consent, lawyers argued, and its bank accounts – which at one point held $2.1 million – belonged to Mandela.

“The money held in the MAD Trust accounts is the personal money of the late Mr Mandela and is not owned by the trustees of the MAD Trust, if indeed such a trust exists,” lawyers for Mandela’s estate argued, according to court documents obtained by ICIJ’s South African media partners, the Financial Mail and amaBhungane Centre for Investigative Journalism.

Ayob, the signatory of the MAD Trust, testified that he created the trust at Mandela’s request to receive personal donations.

Money came from foreign beneficiaries, Ayob said in his court affidavit, “invariably in large currency amounts” via check or bank drafts made out in Mandela’s name.

Mandela “wanted the trust created so that he could give away money to people abroad, who’d been ‘good’ or needed it — he was always very generous,” Ayob told ICIJ media partner The Financial Mail in an interview.

Courtesy: icij.org