Panama Paper Leaks Shed Light on Offshore Dealings of More Indians

Panama Paper Leaks Shed Light on Offshore Dealings of More Indians

Panama Paper leaks do not automatically show evidence of any wrongdoing or criminal activity, it is believed that it will provide more leads for tax authorities around the world to follow.

A new set of Panama Papers released on Thursday throw light on the offshore financial dealings of more Indians – Ajay Bijli, owner of PVR Cinemas, Kavin Bharti Mittal, CEO of Hike Messenger and son of Airtel promoter Sunil Mittal and Jalaj Ashwin Dani, son of Asian Paints promoter Ashwin Dani.

They also show how chaotic and panicked Panamanian law firm Mossack Fonseca’s response was to the global crackdown on its clients by investigative agencies in the aftermath of the last set of leaks in 2016.

The Indian Express, along with the International Consortium of Investigative Journalists (ICIJ) and German newspaper Süddeutsche Zeitung, perused 1.2 million fresh documents, of which at least 12,000 are linked to Indians, according to a report which is the first of a series the national daily has planned based on the new leak.

While these leaks do not automatically show evidence of any wrongdoing or criminal activity, ICIJ believes that it will provide more leads for tax authorities around the world to follow.

This second lot of the Panama Papers also shows that following the April 2016 expose, Mossack Fonseca first asked several companies set up by Indians to produce missing information, including the name of the ‘beneficial owner’ and then served 90-day notices to warn them that the law firm would resign as their ‘registered agent’ if they failed to meet legal due diligence requirements.

Shiv Khemka, Amitabh Bachchan, Jehangir Sorabjee, DLF Group-promoter K.P. Singh and his immediate family, Anurag Kejriwal, Navin Mehra of Mehrasons Jewellers and Hajra Iqbal Memon and his family are prominent Indians whose links to offshore entities have been confirmed by Mossack Fonseca in this series of messages.

As an example, following the 2016 expose, Mossack Fonseca, in a communication, named Bachchan as director of two companies – Lady Shipping Ltd and Treasure Shipping Ltd – and subsequently served him a 90-day notice via UK-based Minerva Trust – the administrator for these companies – addressing him as director of a third company, Sea Bulk Shipping Company Ltd.

The notice conveyed the law firm’s intent to resign as the company’s agent, saying Sea Bulk Shipping did not fulfil “our due diligence requirements”.

Bachchan, however, has denied any link to these companies.

New documents also reveal that while some Indian owners of offshore companies rushed to liquidate their firms, others asked Mossack Fonseca to continue as their agent.

According to Indian Express, some Indian clients went onto increase their holdings:
“Lokesh Sharma, owner of British Virgin Islands-based Mardi Gras Holdings, was one who increased his share capital 30 times in February 2017.

While P.R.S. Oberoi resigned as director of J&W Inc, a Bahamas company, in May 2016, Shishir Bajoria, who claimed his name appeared in Mossack Fonseca records due to a clerical mistake, contacted Mossack Fonseca through an intermediary to change the beneficial ownership of Haptic (BVI) Ltd, which was liquidated in May 2016.

Ironically, on April 5, 2016, the very day of the global media leak, Mossack Fonseca sent an “assurance” to its subsidiary offices vowing “to make sure intrusions of this nature are prevented from happening in the future.” But within days, emails, full of alarm, poured in, many on behalf of companies owned by Indians.”
The report goes onto detail a May 9, 2016 email received by Mossack Fonseca from PP Shah and Associates, a Mumbai-based accountancy firm, in connection with offshore entity Whitefield Global Investments Ltd, whose beneficiaries are Baroda-based Chirayu Amin and members of his family.

“Huge turbulence is started in the financial world including India. We need to respond to the Indian authorities asap as they have initiated inquiries based on the leaked report and documents which we understand are by and large correct information and documents,” said the email.

In April 2016, the Indian government had announced a probe by a Multi Agency Group on the very day the media reported on leaked Panama Papers.

According to the Central Board of Direct Taxes (CBDT) – which is heading the probe – all 426 Indians named in the Panama Papers have been put under the scanner and Rs 1,088 crore ($162.4 million) of undisclosed income has been detected as of June 2018.

Tax authorities continue to take action against those named in the Panama Papers and searches and surveys have been conducted in 58 cases as of November 2017.

As recently as June 13, three Delhi-based owners of entities were a subject of early-morning simultaneous searches. They are Devesh Bahl and Rajeev Vaid (Pythhos Technology); Mohit Jain (Om Metals SPRL Limited) and Gurpal Singh Khurana (Top India Limited). All these companies are registered in British Virgin Islands, a tax haven.

Around the time the Panama Papers uncovered the secret world of Mossack Fonseca, offshore companies linked to the Bijli family continued to do business with the Panamanian law firm. A pioneer in multiplex cinemas in India, Ajay Bijli, along with wife Selena and son Aamer, beneficially owned an offshore company set up to hold a property in the UK.

Further, on July 3, 2016, Chesterfield Mayfair Holdings submitted the mandatory source of funds declaration form to Mossack Fonseca and it recorded Ajay, Selena and Aamer Bijli, at the family’s Delhi (Karol Bagh) address, as the beneficial owners of the company which is funded by their personal savings, proceeds from business and trade and proceeds from inheritance or trust funds.

Copies of the Indian passport, PAN card and bank statement of Ajay Bijli and the British passports of Celina and Aamer were among the documents provided to Mossack Fonseca as part of due diligence records.

A spokesperson for Ajay Bijli said: “The purpose of the incorporation of this company is to carry out some private investments in the overseas market. All these investments have been made in accordance with the applicable Indian and International laws and with full and complete disclosure to Regulatory Authorities including Reserve Bank of India and Income Tax.”

Three weeks before the Panama Papers were published in April 2016, internal email exchanges in Mossack Fonseca revealed names of ultimate beneficial owners of some previously registered companies, new records show.

Among them is KBM Global Limited, a company registered in the British Virgin Islands by Mossack Fonseca in December 2008. Email exchanges between March 16 and March 17, 2016, show that the beneficial owner of the company is Kavin Bharti Mittal. His Amrita Shergill Marg, New Delhi address is mentioned in the email exchanges where the name of the beneficial owner has been inserted.

Kavin Bharti Mittal is a British citizen by birth and an Overseas Citizen of India. In a statement to the media, the company notes that Mittal became a tax resident in India on account of his presence to manage a tech start-up from the financial year 2011-12 and accordingly, the tax returns filed with the tax authorities provide full disclosure and details about his ownership of KBM Global Limited.

Jalaj Ashwin Dani stepped down from his position of eminence in Asian Paints in April 2017, after 18 years in the family trade.

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Several documents link Dani and his wife Vita Dani to a British Virgin Islands-based entity called Poinsettia Group Holdings Limited. Dani is currently listed as being on the board of 38 Indian companies while his wife is on the board of nine companies and chairperson of 11Sports, a sports management company.

Mossack Fonseca announced in March this year that it was shutting down due to the economic and reputational damage inflicted by its role in the global tax evasion debacle.

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