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For €500 potential clients and stakeholders of the superyacht industry could spend the day walking around the Monaco Yacht Show taking in some of the most impressive innovations and technology available to the world. The show, which took place just two weeks ago, has been hailed a success by the majority of those who were in attendance. The event was an indicator of the industry's maturity and drive to encourage sustainable, forward-thinking products and services that would appeal to the philanthropic nature of a new generation of clients. However, the recent exposè of secret wealth and offshore dealings of the rich and powerful is sure to dampen the wider public perception of superyachts.
 
The progressive strides that have been made by stakeholders are well known by those who even vaguely follow the market trends, however, the exclusive and insular nature of the industry means that these achievements are often eclipsed by news such as the Pandora Papers. The documents detail more than 29,000 offshore accounts - more than double the amount identified by the Panama Papers with over 130 of the individuals listed as billionaires by Forbes magazine.

Putin's inner circle is among some of the most read current articles in the news cycle. The papers have revealed the wrongdoings of Svetlana Krivonogikh, a rumoured former partner of the Russian president. Krivonogikh is the owner of a shell company in the British Virgin Islands, she has also used the same Monaco financial services firm which worked for one of Putin’s billionaire friends. She is the owner of a luxurious fourth floor apartment in Monaco as well as the superyacht M/Y Aldoga. Sergey Chemezov, CEO of Rostec, who served in the KGB with Putin, has also been named in the papers, he is the owner of 85m Lurssen M/Y Valerie.
 
For those who are aware of the inner workings of the superyacht industry, they will know that there is a legitimate purpose for the use of offshore companies for luxury assets. The appeal of convenient flagging not only relieves security anxiety and political pressure, but regions such as the British Virgin Islands and Cayman Islands are also home to some of the most well respected registries in yachting.
 
However, when it is reported that Tamim bin Hamad Al Thani, the emir of Qatar and owner of 123m M/Y Al lusail, continues to use offshore companies to make investments, as well as manage and safeguard wealth, his items of extreme luxury begin trending for all the wrong reasons. The Panama Papers had already ‘revealed’ that his $300 million superyacht was managed by offshore companies.
 
When the Panama Papers were first released SuperyachtNews reported that despite the PR storm, there were reasons to be thankful for the investigation. The leak meant that UHNWIs may be more likely to do business with reputable and respected companies. After the release of the documents and pressures from various authorities many of the implicated companies have now either cleaned up their act or gone out of business.
 
As interesting as it may be for some, superyacht tax management and its various nuances is not something that is likely to break into general media interest any time soon. However, there is growing public animosity towards the financial elite. The global media are reporting that extremely wealthy individuals have simply gotten better at hiding their assets, The Washington Post reported that people from Putin's inner circle had warned one Panamanian firm not to repeat the same mistakes that had led to the previous leak of financial documents.
 
Public opinion and the wider perception of the superyacht industry have a part to play in how well the market performs, especially in regards to attracting new clients. Stakeholders leaving the Monaco Yacht Show would have felt confident and assured with the future-proof plans that strip away the preconceived notions of the bond villain superyacht owner archetypes. But now, looking back at Monaco in the rear view mirror, there is a sense of frustration that the progress made in recent years by the superyacht industry is overshadowed by the negative impact of a few individuals.
 
It would be naïve and blatantly untrue to suggest that there are not individuals out there who own superyachts either through illegal or unethical means, and yet they are in the vast minority of superyacht owners. The fact of the matter is that there are 330 public officials and others within the Pandora Papers with titles to their name and moral imperatives that make their tax avoidance seem even more unethical and harder to justify, despite the actual legality of their actions. What news such as this should do, is wake up industry stakeholders and remind them of the importance of conducting due diligence, acting transparently and being willing to say no. The Pandora Papers is still fresh news, and will remain so for at least a couple of weeks, time will tell if there will be any secondary effects or subsequent action. But alarm bells will, and should, be ringing in the corners of the market where unethical practice and corruption manifest.

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