New Delhi: A global investigation has revealed how some of the world’s richest and most powerful people, including several prominent Indians, allegedly used offshore companies to conceal their wealth from tax authorities.
The investigation, termed as the ‘Pandora Papers’, is based on nearly 12 million documents obtained by the International Consortium and Investigative Journalists (ICIJ). It was published by The Indian Express in India.
According to the ICIJ website, an investigation into the “offshore havens” and “hidden riches” of world leaders and billionaires”, is based on confidential records of 14 offshore service providers located in British Virgin Islands, Panama, Belize, Cyprus, the United Arab Emirates, Singapore and Switzerland, which helped these wealthy individuals to “incorporate shell companies, trusts, foundations and other entities in low- or no-tax jurisdictions”.
Anil Ambani, Sachin Tendulkar, Nirav Modi’s sister named
The leaked documents revealed offshore dealings of Reliance Group chairman Anil Ambani, cricket legend Sachin Tendulkar, fugitive diamond businessman Nirav Modi’s sister Purvi Modi, the husband of Biocon chairperson Kiran Mazumdar-Shaw, among others.
According to the report in The Indian Express, many individuals and businesses, already under the scanner, are “pushing the envelope to evade detection, using loopholes in the law at home and the lax jurisdiction of tax havens”.
Of the 300-plus Indians figured in the list, the report highlighted how “bankrupt” Anil Ambani and his representatives own 18 asset holding offshore companies worth $1.3 billion in Jersey, British Virgin Islands (BVI) and Cyprus.
Following the revelations by the newspaper, Ambani’s lawyer said, “Our client is a tax resident of India and has made disclosures to Indian authorities as required to be made in compliance with law. All required considerations were taken into account when making disclosures before the London court”.
The list also named fugitive diamond jeweller Nirav Modi’s sister, Purvi Modi. According to the documents, Purvi set up a trust in the British Virgin Islands to act as a corporate protector of a trust formed through the Trident Trust Company, Singapore.
The trust was set up a month before Nirav fled India in January 2018.
In response to The Indian Express’ request for a comment on the revelations, Manavendra Mishra, lawyer of Purvi Modi, said, “We are the lawyers acting for Ms Purvi Modi in India. We deny all the below allegations raised in your email. We are not in a position to respond or comment at this stage since the matter is sub-judice before the special PMLA court.”
The leaked documents also name Sachin Tendulkar, with wife Anjali Tendulkar and father-in-law Anand Mehta, as Beneficial Owners and Directors of Saas International Limited, a company based in the British Virgin Islands. The company was reportedly liquidated three months after the Panama Papers expose.
Speaking to The Indian Express, Mrinmoy Mukherjee, CEO and Director of Sachin Tendulkar Foundation, said: “The referenced investment by Mr. Tendulkar has been made by him from his tax paid funds under the Liberalised Remittance Scheme (LRS) and has been duly accounted for and declared in his tax returns.
Another report said John McCallum Marshall Shaw, a British citizen and husband of Kiran Mazumdar-Shaw, promoter of Biocon, set up ‘The Deanstone Trust’ with Kunal Ashok Kashyap, who was banned by Sebi for insider trading.
Asked about this connection with Kashyap, Kiran Mazumdar-Shaw told The Indian Express: “Mr Kunal Kashyap runs a financial advisory service and has been used by Biocon as well as Glentec. Mr Kashyap advises several companies apart from Biocon. I understand that Mr Kashyap’s SEBI case is currently pending with SAT (Securities Appellate Tribunal) and hence it would not be appropriate for me to comment on this any further.”
Globally, the prominent leaders who allegedly used tax havens to stash their funds include former UK prime minister Tony Blair, ministers in Pakistan PM Imran Khan’s cabinet, and King of Jordan among others.
Russian President Vladimir Putin’s image-maker, Konstantin Ernst, who is also a television executive and Oscar-nominated producer, is said to have become “a silent partner, hidden behind layers of offshore companies, in a state-funded privatization contract to buy dozens of movie theaters and other property from the city of Moscow”.
According to the documents, the value of Ernst’s personal stake in the property holdings topped $140 million.
Imran Khan’s cabinet ministers
The documents reveal offshore holdings of Pakistan Prime Minister Imran Khan’s current and former cabinet ministers, including his finance minister.
The documents also show that Pakistan’s minister for water resources, Chaudhry Moonis Elahi, contacted a Singapore-based offshore services provider in 2016 to set up a trust to invest the profits from a family land deal, which, according to the lender, was an illegal loan. The bank said the loan had been approved due to the influence of Elahi’s father, a former deputy prime minister, the report said.
Czech PM bought lavish property in France
The leaked records show that, in 2009, Czech Prime Minister Andrej Babis, one of the richest man in his country, injected $22 million into a string of shell companies to buy a sprawling property, known as Chateau Bigaud, in a hilltop village in Mougins, France, near Cannes.
The report says Babis has not disclosed the shell companies and the chateau in the asset declarations he’s required to file as a public official.
Tony Blair’s property
Former UK Prime Minister Tony Blair avoided having to pay £312,000 in stamp duty when buying a £6.45m London townhouse in 2017. The property was an office for his wife Cherie’s business and they bought the offshore firm that owned it.
King of Jordan
Jordan’s monarch, King Abdullah II, bought three beachfront mansions in Malibu that were purchased through three offshore companies for $68 million in the years after Jordanians filled the streets during Arab Spring to protest joblessness and corruption.
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