Indians
in #PanamaPapers list: Aishwarya Rai, Amitabh Bachchan, KP Singh, Iqbal Mirchi,
Adani elder brother
Biggest leak of over 11
million documents of Panama law firm features over 500 Indians linked to
offshore firms, finds 8-month investigation by a team of The Indian Express led
by Ritu Sarin, Executive Editor (News & Investigations).
Last year, it was Swiss Leaks, a global list
with over 1,100 Indians with secret bank accounts in HSBC Geneva, which shaped
the debate over black money parked overseas.
Now come The Panama Papers.
More than 11 million documents from the
secret files of Mossack Fonseca, a law firm headquartered in tax haven Panama,
known for its factory-like production of offshore companies for its worldwide
clientele of the well-heeled.
These records reveal a list of individuals who
have paid the firm — and bought the benefits of the secretive, lax regulatory
system in which it operates — to set up offshore entities in tax havens around
the world. And Mossack Fonseca’s eagerness to meet their demands, each one for
a fee, that helps mask real ownership but still show compliance.
Over 500 Indians figure on the firm’s list of
offshore companies, foundations and trusts. There are also 234 Indian passports
(handed over by clients as part of the incorporation process), an
eight-month-long investigation of over 36,000 files by The Indian Express has
revealed.
Of these, The Indian Express has checked the
authenticity of over 300 addresses. From film stars Amitabh Bachchan and
Aishwarya Rai Bachchan to corporates including DLF owner K P Singh and nine
members of his family, and the promoters of Apollo Tyres and Indiabulls to
Gautam Adani’s elder brother Vinod Adani. Two politicians who figure on the
list are Shishir Bajoria from West Bengal and Anurag Kejriwal, the former chief
of the Delhi unit of Loksatta Party.
From Mumbai ganglord the late Iqbal Mirchi,
the list includes scores of businessmen with addresses in nondescript
neighbourhoods in Panchkula, Dehradun, Vadodara and Mandsaur. Addresses of
individuals, in many cases, The Indian Express found out, led to physical
locations, but with no trace of the individual. Or, as in one case, belonged to
a tenement in a chawl in Mumbai. Not just individuals, a close scrutiny of The
Panama Papers by The Indian Express also reveals details of hitherto unknown
deals, in some cases involving the government, too.
These include cricket franchise deals and, in
several cases, linkages to those who have previously been under CBI or Income
Tax scrutiny. As per RBI norms, no Indian citizen could float an overseas
entity before 2003 — in 2004, for the first time individuals were allowed to
remit funds of up to $25,000 a year under the Liberalised Remittance Scheme,
and this limit stands at $250,000 a year now.
But while RBI let individuals buy shares
under LRS, it never allowed them to set up companies abroad, having clarified
it through an FAQ mid-way in September 2010. In most of the cases in The Panama
Papers, companies were set up long before the rules were changed and the
purpose, experts said, was to park foreign exchange in a tax haven. It was only
in August 2013 that individuals were allowed to set up subsidiaries or invest
in joint ventures under the Overseas Direct Investment window. Indeed, records
investigated reveal detailed correspondence between Indian tax authorities and
those in British Virgin Islands, Seychelles, Panama or other tax havens seeking
shareholder, bank account and asset details of offshore companies set up by
Mossack Fonseca for Indians.
It is revelatory that authorities in these
tax havens had no choice but to depend on Mossack Fonseca for information
since, unlike India, the government is not a repository of ownership details.
The Panama Papers come at a time when the Special Investigating Team (SIT) on
black money headed by former Supreme Court Judge M B Shah is finalising its new
action-taken report. The formation of the SIT was the very first decision taken
by the Narendra Modi Government in May 2014. The treasure trove of records was
accessed by Munich-based newspaper Suddeutsche Zeitung which a year ago
collaborated with the International Consortium of Investigative Journalists
(ICIJ) and, in turn, with over 100 media organisations to investigate its
contents.
In July 2015, The Indian Express signed an
agreement with ICIJ for being the Indian partner for The Panama Papers project.
Since then, a team of 25 reporters, led by the newspaper’s investigative team,
joined 375 journalists in 76 countries. Scouring electronic databases of
documents registered in tax havens, joining digital dots (emails, PDF and TIFF
files with one document sometimes yielding attachments with hundreds of pages
of correspondence, agreements and contracts), cross-referencing company data
with lists of names, The Indian Express reporters did field visits across the
country to check on addresses mentioned in these records.
The Indian Express asked each one named
whether they had informed RBI or the Income Tax department about these
companies. The results of that investigation — that begin in a series starting
today — tell a story that’s as much about draconian foreign investment laws as
it’s about glaring gaps in the regulatory apparatus. The Mossack Fonseca data
contains details of entities set up almost four decades ago from 1977 up to
those registered just four months ago, that is, December 2015. Clearly, it
covers the period when India began signing tax agreements with other countries
to accelerate cooperation on undisclosed and untaxed assets. And the years when
tracking black money has become the centre of political and economic discourse.
The worldwide expose also comes just six months after the 90-day “compliance
scheme” for declarations of offshore assets and accounts ended on September 30,
2015 and brought just Rs 3,770 crore from 637 declarants.
The window now
closed, strict penalties and a jail term have been announced for anyone found
to have undisclosed and undeclared foreign assets and accounts. The Panama
Papers is the third successive collaborative project done by The Indian Express
with the ICIJ on offshore investments. The first was in 2013, titled “Offshore
Leaks.” There were 612 Indians on that list which included two politicians who
were then Members of Parliament (including Vijay Mallaya) and several top
industrialists. The revelations led to several persons getting tax notices and
subsequently being prosecuted for non-declaration of the offshore companies.
The second ICIJ-The Indian Express
collaboration, under the aegis of the French newspaper, Le Monde, was published
in February 2015. It was called “Swiss Leaks” and contained data of HSBC
(Geneva) account holders — balances dating to 2006-07 — among whom there were
1,195 Indian account holders. Significantly, this was almost double of the 628
names given by the French authorities to the Indian government in 2011 and the
scope of the HSBC probe was expanded following the expose.
Given the humongous 2.6 tera byte dump size
of Project Prometheus — as the investigation was aptly named — the task was cut
out for the team. Tracing Indians in the database comprising over 11 million
files and 2,14,488 offshore entities was akin to searching for a needle in a
haystack. And all the giga bytes did not come in one go, forcing us to what
management experts call ‘fix the aircraft while it flies’. In all, the dump
finally threw up 36,957 India-related files.
Online tools were created to
unravel complex web-like linkages between individuals and multiple entities.
Internal mails of Mossack Fonseca and legal incorporation documents attached in
these revealed not only addresses and passports of individuals, but in some
cases also their source of wealth and the intent in setting up offshore
entities.
Source:indianexpress.com
0 Comments