Indian money in offshore entities: The ‘Paradise Papers’
This page is being updated regularly.
L-R: Jyoti Malhotra, Sandeep Singh, Jay Mazoomdaar
The International Consortium of Investigative Journalists and, |
Names have been arranged in the alphabetical order of the company’s name or the first- mentioned partner’s surname
About the Paradise Papers Investigation
From The International Consortium of Investigative Journalists
The Paradise Papers is a global investigation into the offshore activities of some of the world’s most powerful people and companies.
The International Consortium of Investigative Journalists and 95 media partners explored 13.4 million leaked files from a combination of offshore service providers and the company registries of some of the world’s most secretive countries.
The files were obtained by the German newspaper Süddeutsche Zeitung.
The Paradise Papers documents include nearly 7 million loan agreements, financial statements, emails, trust deeds and other paperwork from nearly 50 years at Appleby, a leading offshore law firm with offices in Bermuda and beyond.
From The Times of India
The documents also include files from a smaller, family-owned trust company, Asiaciti, and from company registries in 19 secrecy jurisdictions. The records range from complex, 100-page corporate transaction sheets and dollar-by-dollar payment ledgers to simple corporate registries of countries, such as Antigua & Barbuda, that do not publicly list names of company shareholders or directors.
As a whole, the Paradise Papers files expose offshore holdings of political leaders and their financiers as well as household-name companies that slash taxes through transactions conducted in secret. Financial deals of billionaires and celebrities are also revealed in the documents.
The Paradise Papers files include far more information about U.S. citizens, residents and companies than previous ICIJ investigations – at least 31,000 of them.
ICIJ collaborated with more than 380 journalists working on six continents in 30 languages. Many team members spent a year using online platforms to communicate and to share documents. Journalists tracked down court records, obtained financial disclosures of politicians in Africa, Europe, and Latin and North America, filed freedom of information requests and conducted hundreds of interviews with tax experts, policymakers and industry insiders.
The South Asian team
Jay Mazoomdaar (India)
Ritu Sarin (India)
Sandeep Singh (India)
Shyamlal Yadav (India)
Vaidyanathan Iyer (India)
Umar Cheema (Pakistan)
Namini Wijedasa (Sri Lanka)
The main story, as exposed by ICIJ/ Indian Express
Paradise Papers live updates: The Indian Express investigates the largest ever leak of financial data, two days ahead of the Government's "Anti-Black Money Day" on November 8 to mark the first anniversary of demonetisation.
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Paradise Papers: After tapping row, Nira Radia on board of two offshore firmsParadise Papers: After tapping row, Nira Radia on board of two offshore firms
The Paradise Papers, a cache of 13.4 million documents obtained by German newspaper Süddeutsche Zeitung and investigated by the International Consortium of Investigative Journalists (ICIJ) in partnership with The Indian Express, reveals how two firms Bermuda’s Appleby and Singapore’s Asiaciti Trust help the global rich and powerful move their money abroad.
Among the 180 countries represented in the data, India ranks 19th in terms of the number of names. In all, there are 714 Indians in the tally.
7.25 am: Welcome to our live blog on the Paradise Papers. The Indian Express investigation into the largest ever leak of financial data comes two days ahead of the Government’s “Anti-Black Money Day” on November 8 to mark the first anniversary of demonetisation.
7.30 am: Minister of State for Civil Aviation Jayant Sinha has responded to his name figuring in the Paradise Papers investigation. This is what he tweeted early this morning:
“Full details have been provided to Indian Express. These were bonafide and legal transactions undertaken on behalf of highly reputed world-leading organisations in my fiduciary role as Partner at Omidyar Network and its designated representative on the D.Light Board. All these transactions have been fully disclosed to relevant authorities through all necessary filings as required. After leaving Omidyar Network, I was asked to continue on the D.Light Board as an Independent Director. On joining the Union Council of Ministers, I immediately resigned from the D.Light Board and severed my involvement with the company. It is crucial to note that these transactions were done for D.Light as an Omidyar representative, and not for any personal purpose.”
8.00 am: Former Rajasthan chief minister Ashok Gehlot; Karti Chidambaram, son of former finance minister P Chidambaram; former Union minister Sachin Pilot; and, Ravi Krishna, son of former Union minister Vayalar Ravi, are linked to Ziqitza Health Care Limited which is being probed by ED and CBI for various economic offences.Ziqitza, in turn, raised money from Global Medical Response of India Limited which was registered in Mauritius on March 26 2008 by Appleby and classified as “high risk profile”.
For his part, Sachin Pilot said that once the company changed its status from a “non-profit” venture to a “for-profit” venture, he resigned from it and did so before he became a Member of Parliament in 2004. He said: “For under a year I was a Honorary Director with the company. This was in 2001. When they informed me that they have become a for profit company I resigned. I have never held a share in it, held a board meeting or signed any papers.”
On Sachin Pilot’s name figuring in the Paradise Papers, Congress said the ED and CBI are already investigating the Rajasthan ambulance.
9.00 am: BJP MP Ravindra Kishore Sinha, who founded the private secuirty firm SIS, heads a group which has two offshore companies. Records accessed by The Indian Express show that SIS Asia Pacific Holdings Ltd (SAPHL) and SIS International Holdings Limited (SIHL) are the two subsidiaries of SIS.
Sinha, however, did not mention this in his nomination for the Rajya Sabha election in 2014. But in documents of SIS (India) Limited filed before the Securities and Exchange Board of India (SEBI) on August 4, 2017, Sinha declared his interests in all these companies.
9.30 am: BJP MP Ravindra Kishore Sinha’s response to The Indian Express story: “These companies are indirect 100% subsidiaries of Security and Intelligence Services (India) Limited in which I am a shareholder. I have no direct interest in these companies except to the extent of my shareholding in Security and Intelligence Services (India) Limited. As these companies are indirect subsidiaries of Security and Intelligence Services (India) Limited, I am also a director in these entities. Due to the prevailing regulation in these countries, which require any company to have at least two shareholders, I hold 1 share each in these companies for which the beneficial interest has been declared in favour of Security and Intelligence Services (India) Limited and SIS International Holdings Limited, the 100% shareholders of SIS International Holdings Limited and SIS Asia Pacific Holdings Ltd respectively. These matters have been fully disclosed in the various filings with SEBI as a part of the IPO of Security and Intelligence Services (India) Limited.”
9.45 am: In the years when Veerappa Moily was Union Minister in the UPA Government, his son Harsha Moily floated a firm which received investments from a Mauritius-based firm, Unitus Impact PCC. His company Moksha-Yug Access Private Limited, received funds from MYA Unitus Impact Partners, one of the two cells of Unitus Impact PCC.
Harsha Moily’s response to The Indian Express story:
“Having founded MYA and led the company as its CEO since its inception in 2005, I have seen MYA experience growth as well as face significant challenges in operating an impact business in rural India. The dairy/ agri space is extremely volatile, but it is a critical sector for rural India and we worked hard to make our business model work.
MYA has always had a farmer-first approach, and our objective has always been to ensure that our dairy farmers be benchmarked with the best in the world in terms of productivity (quality and quantity of milk per cow) and that economic growth be balanced with human progress. With this primary objective, it was imperative that MYA raise external investment from professional investors in the impact investment space including by Unitus Impact PCC – MYA UIP, the investment vehicle set up by Unitus Impact to make investments into MYA (they led an investment round in 2011). Please also note that we have raised capital from a range of other professional institutional investors such as Unitus Equity Fund and Khosla Impact (both of whom originally invested in 2008) through their investment vehicles, with much of the overall equity investment into MYA having started even before my father became a Union Minister in UPA II.”
10.00 am: Documents accessed by The Indian Express show that funds amounting to over $1.5 billion were diverted using four offshore subsidiaries of United Spirits Limited India, a company formerly owned by wanted fugitive Vijay Mallya.
After Diageo group bought USL India from Mallya, it undertook a restructuring process to get rid of these three intermediate subsidiaries and so, effectively, ended up waiving the $1.5-billion debt owed by these subsidiary companies.
The $1.5-billion loan waiver and the novation seems to have resulted in Mallya taking away much more than the Rs 1,225 crore that Diageo reported to BSE – the amount actually works out to around Rs 10,000 crore going by Appleby documents.
10.15 am: Corporate lobbyist Niira Radia, who was at the centre of a controversy in 2010 over intercepted phone conversations that came to be known as the Radia Tapes and suggested that she used her proximity to some journalists and politicians to try and influence ministerial appointments in UPA II, was part of two offshore companies in Malta.
10.30 am: In a case of potential conflict-of-interest, the chairman of Fortis-Escorts, Dr Ashok Seth held shares in a Singapore-listed company that manufactures stents.
He bought 2,55,000 shares for $90,000 and sold them for approximately” Rs 1.03 crore. He made a profit of Rs 54 lakh on the purchase.
10.45 am: Bollywood actor Sanjay Dutt’s wife Dilnashin Sanjay Dutt, popularly known as Manyata, held several positions in a Bahamas-registered firm Nasjay Company Limited. A spokesperson for Manyata Dutt said: “As per the requirements of provisions of Income-tax Act, 1961, all the properties, company or body corporate or shares in any company are declared in the balance sheet.”
11.00 am: Electrical appliances company Havells India floated over 50 offshore subsidiaries, most of them in tax havens, since February 2000. In a bid to expand its business worldwide, Havells India Ltd set up Havell’s Holdings Ltd in the Isle of Man. It in turn invested EUR 141.25 million in Havells Malta that facilitated its global spread — 52 subsidiaries across Europe, Latin America and Asia.
12.00 pm: Bollywood veteran Amitabh Bachchan was a shareholder in a digital media company incorporated in Bermuda. He made the investment after hosting the first season of the TV show Kaun Banega Crorepati in 2000-01.
2.00 pm: We have our first reaction: The Congress attacked the Modi-led government for failing to unearth black money stashed abroad since coming to power. Addressing a press conference in New Delhi, Congress spokesperson Randeep Surjewala said: ” Modi government has so far not made public names of those who have stashed black money abroad.”
2.30 pm: The Congress, citing conflict of interest, has demanded MoS Jayant Sinha to step down from his position. They also demanded the government to file an FIR against him and order a detailed probe. 8.30 am: Karti Chidambaram told The Indian Express: “I was briefly a Non Executive Independent Director with the company and have never been a shareholder. And as far as I know Ziqitza Health Care never had any off shore operations. A company with off shore operations may have invested in them.”
3.00 pm: In reply to a question on the sons of former Congress union ministers figuring in the global index, Surjewala said the party is ready to face any probe. Former union minister Vayalar Ravi’s son Ravi Krishna and M Veerappa Moily’s son Harsha Moily figured in the list.
Indians’ offshore dealings: Indian Express’ cross-verifications
Paradise Papers: Names out in open; other Indians in the list | November 6, 2017 |Indian Express
Out in open: Other Indian company owners in the list | November 7, 2017 | Indian Express
A bunch of documents in the Bahamas registry show that Nasjay Company Limited was set up in the Bahamas, and Dilnashin Sanjay Dutt was appointed its Director, Managing Director, President and Treasurer in April 2010.
Several Indians have been listed in the Paradise Papers registries. A list of Indian company owners whose identities have been confirmed and addresses verified:
The posts below have been arranged in the alphabetical order of the company’s name or the first- mentioned individual’s surname
A
Venkata Narasa Reddy Attunuri, Partha Saradhi Reddy Bandi
Hyderabad
Offshore jurisdiction
Malta
Attunuri and Bandi are Directors at Hetero Drugs Limited, Hyderabad, which was incorporated on April 6, 1993. Its authorised share capital is Rs 10,00,00,000, and its paid-up capital is Rs 3,45,00,000. It is involved in the manufacture of pharmaceuticals and other chemical products. The company’s Annual General Meeting (AGM) was last held on September 29, 2016, and as per Ministry of Corporate Affairs records, its balance sheet was last filed on March 31, 2016.
The Malta registry data show that Attunuri and Bandi are directors of Hetero Malta Limited. They are also listed as the legal and judicial representatives of the company.
RESPONSE: “The offshore accounts were opened by Hetero Malta, a purely marketing company on behalf of Hetero Drugs. I am a Director in the company so my name appears. I do not know for what purpose it was set up. As far as I know, it is still active. The company has declared it in all its financial declarations. As far as I know, the company has taken all the required authorisations from various departments for opening the account,” Venkata Narasa Reddy Attunuri said.
Partha Saradhi Reddy Bandi said: “I am not aware of any offshore accounts in my name. If the company has opened any, it will declare if it feels the need. I am not in a position to say anything else.”
— SREENIVAS JANYALA, Hyderabad
Amitabh Bachchan / Jalva Media
Kaun banega offshorepati?
Jalva Media Ltd was set up in Bermuda in July 2000, Jalva-India tied up with IBM for content services
A YEAR after he hosted the first season of the TV show Kaun Banega Crorepati in 2000-01, Bollywood icon Amitabh Bachchan became shareholder of a digital media company incorporated in Bermuda in 2002. Till the introduction of the Liberalised Remittance Scheme in 2004, all investments abroad made by resident Indians required prior approval of the Reserve Bank of India. It’s not clear if the shareholding was disclosed to RBI.
Appleby records Bachchan and Silicon Valley venture investor Navin Chaddha as shareholders of Jalva Media Ltd on June 19, 2002. The company was set up in Bermuda on July 20, 2000 and dissolved in 2005.
One of the early digital ‘rich media’ start-up, Jalva Media Inc was launched by four young Indian entrepreneurs in California in January 2000. The Indian arm — Jalva.com India Pvt Ltd (later Jalva Media India Pvt Ltd) — came up in February, followed by a third company in Bermuda in July.
In July 2000, Jalva-India announced receiving $3.2 million in angel investment from leading Silicon Valley entrepreneurs including Navin Chaddha, then chairman and CEO of Biztro, a California-based business operations platform. Jalva also set a short-term target to raise another $15 million in venture finance. Jalva Media had already signed up for the live webcast of International Indian Film Academy Awards from the Millennium Dome in London. The company launched dekhofilm.com in October 2000 and tied up with IBM in June 2001 to provide “a complete content management solution for the media and entertainment industry.” Jalva also set up its Digital Media Innovation Laboratory in Mumbai.
A year after the IBM tie-up, Bachchan and Chaddha, one of the early investors, show up on Appleby records as shareholders in Jalva-Bermuda. Jalva Media soon ran out of steam. Urshit Parikh had already left to join Kuokoa Networks in November 2001. Gautam Anand left in September 2003 and Shailendra J Singh in July 2004.
On October 28, 2005, Appleby records show, a notice was published in The Bermuda Sun, stating that Jalva-Bermuda, listed as “bad debtor”, “shall stand dissolved”. Appleby had already terminated services to the company on January 14, 2004.
Jalva-India survived on paper till it opted for the ‘Easy Exit Scheme 2011’ of the Ministry of Corporate Affairs, for being “inoperative for the past six years due to the reason of business not being successful.” As a director, Tarun Arora completed the formalities.
In July 2005, California-based information technology and business process outsourcing company Caneum Inc executed an asset purchase agreement and acquired certain customer contracts from Jalva Media.
The website — jalvamedia.com — has a 2016 copyright stamp and a bare webpage with the words “Passionately Inspired” floating in the middle. All Jalva-Bermuda shareholders were unavailable for comment.
Ravish Bhadana, Kota; Neha Sharma, Mona Kalwani, Ghaziabad
Overseas jurisdiction
Malta
The parents of Ravish Bhadana live on the first floor of the family’s home in Kota. There are tenants on the ground floor. Ravish Bhadana’s whereabouts are not known.
In September 2011, Bhadana was named by the Delhi Police as the kingpin of one of the modules of a fake pilot licensing scam. The Delhi Police Crime Branch claimed to have unearthed at least four modules, and arrested over a dozen pilots, besides officials posted with the Directorate General of Civil Aviation (DGCA), and middlemen. Bhadana remained absconding.
The Malta registry records show him as Director/shareholder/judicial representative and legal representative of two firms, with separate registration numbers. In both firms, the same positions are also held by two Ghaziabad residents, Neha Sharma and Mona Kalwani. The shareholder of one of the companies incorporated by these two individuals is another Malta company named Mondo Tessile Holding Limited.
Bhadana, Sharma and Kalwani are Directors in DICI Exports, as per RoC documents registered at a Ghaziabad address. When The Indian Express visited that address, the owner of the house, Ajit Kumar Singh, said that the two women had been his tenants, and had moved out three years ago.
RESPONSE: Bhadana’s mother said that her son earlier lived in Jaipur and now lives in Delhi, but she does not have his phone number. “I talk to him whenever he comes. It has been a long time since he came here, he comes home every 4-6 months,” she said. She could not provide his address. She said that Bhadana did, indeed, pursue a course to train as a pilot, but did not work as one. Bhadana’s elder brother, Naveen Bhadana, a doctor in Bhilwara, said over the phone, “I haven’t spoken to him in a long time. If I speak to him, I will share your number.”
The Indian Express visited the listed addresses for Neha Sharma and Mona Kalwani in Ghaziabad, and was informed by neighbours that they had moved out several years ago.
— HAMZA KHAN, Kota and SHYAMLAL YADAV, Ghaziabad
Shashi Kaant Bhatnagar, Shalini Vijay Shrivastav, Mumbai
Overseas jurisdiction
Malta
Shashi Kaant Bhatnagar is a Director of Mumbai-based Inmetta Production Private Limited, Inmetta India Investment Services LLP and Bellpepper Animation Pvt Ltd. His wife Shalini is on the board of Inmetta India Investment Services LLP.
Shashi Kaant Bhatnagar’s name figures in the Malta registry as a Director of Inmetta Limited, a limited liability company (LLP) set up in July 2015. It was incorporated with a nominal share holding of Euro 1,200. In December 2015, the company requested an 18-month extension for filing accounts.
RESPONSE: Shashi Kaant Bhatnagar said: “Inmetta Ltd was incorporated in Malta by me through ownership of shares by Inmetta India Investment Services LLP, a firm in partnership of me and my wife incorporated in Mumbai. This Malta company is not an “offshore company” if we strictly go by use of legal terminology. This is a EU holding company. This is an inoperative company and we have not filed returns of the company in Malta also as the purpose of setting up stands defeated so far. The purpose was to raise investments from an investor group based out of Malta. It is only last month, having realised this investor interest may not work out, I have started to explore closing it now. We had an investment commitment from an investor group in June 2015 who requested us to form a holding company in Malta, which would eventually be holding subsidiaries in India, Spain and US. The company did not start operations and does not even have a bank account at present. It is in an inoperative status under governance by our company secretary Mr Dion Borg in Malta. We did not capitalise the company also. This is the reason for not declaring to any authorities; however, due to reasons of this company only we delayed filing returns of Inmetta India Investment Services LLP as if investments likely to happen would have happened, we needed to declare this in our returns. We don’t need authorisation to open a company overseas from RBI. But we need authorisation to capitalise a company before starting its operation or own shares in any overseas company with our capital transferred from India.”— EXPRESS NEWS SERVICE, Mumbai
Caparo/ Angad Paul
According to Appleby records, BVML is the holding company for Mytrah Energy India Limited (MEIL), incorporated on November 12, 2009 as Caparo Energy India Limited, which changed its name to MEIL on September 27, 2011.
Before he fell to his death from a London penthouse on November 8, 2015, Angad Paul, son of UK-based business magnate Lord Swaraj Paul, had taken the Mauritius route to invest in India, primarily in the wind energy sector, according to Appleby records.
In 2010 , four family companies based in the British Virgin Islands — Caparo Energy Capital Inc, Caparo Energy Holdings Inc, Caparo Energy Investments Inc and Esrano Overseas Ltd — formed a holding company Caparo Energy Ltd (CEL), based in Guernsey, which in turn formed a company in Mauritius called Caparo Energy Investments Ltd.
Appleby records show that the words Caparo Energy in the names of three BVI companies were replaced with Bindu Urja. In 2011, Caparo Energy Ltd was renamed Mytrah Energy Limited — MEL is listed at the London Stock Exchange. The Mauritius-based Caparo Energy Investments Ltd was renamed Bindu Vayu Mauritius Ltd (BVML).
When MEL was listed at the London Stock Exchange, Angad Paul was its Non-Executive Chairman and Ravi Shankar Kailas was Chief Executive Officer. Appleby records show Angad Paul was named PEP (politically exposed person) on November 9, 2015 — the day after his death.
According to Appleby records, BVML is the holding company for Mytrah Energy India Limited (MEIL), incorporated on November 12, 2009 as Caparo Energy India Limited, which changed its name to MEIL on September 27, 2011. The MEIL financial statement for 2015-16 recorded its turnover at Rs 2448.78 crore. The company’s present chairman is Ravi Shankar Kailas and it has 15 subsidiaries in India. MEIL has three step-down subsidiaries.
In Appleby records, a document dated May 24, 2010 states that the business purpose of the company is to be “an investment holding company of an Indian subsidiary which in turn will primarily be used to set up renewable fuel based power generation projects in India”.
Records show that the company will “be owned by Caparo Energy Capital Inc, Caparo Energy Investments Inc and Caparo Energy Holdings Inc”. These companies were incorporated in the British Virgin Islands and Angad Paul, Ravi Kailas and Alastair Cade became ultimate beneficial owners of the BVI companies. According to an Appleby document of September 26, 2014, the BVML is placed “High” in the risk rating of the companies.
In Appleby records, a note of BVML for financial year 2012-13 states, “Under the current laws and regulations, the Company (BVML) is subject to income tax in Mauritius at the rate of 15 per cent but is entitled to a tax credit for foreign taxes equivalent to the higher of actual foreign tax suffered and 80 per cent of Mauritius tax payable in respect of its foreign source income, thus reducing its maximum effective tax rate to 3 per cent. The Company (BVML) had no tax charge for the year ended March 31, 2013 as it had no taxable income.” There is a similar statement for the financial year 2013-14.
On October 15, 2013, Appleby employee wrote an email to his colleagues: “It is noted that the file consists of a high risk of round tripping and the risk profile of this client continues to be set to be high… Ravi Kailas is a B.O. of BVML (through Bindu Urja Capital Inc). Noted from the provided proof of address that his current permanent residential address is in India. However, also noted from professional reference letter from Gabhawala Chartered Accountants that Ravi Kailas is an NRI, residing in Canada.”
Referring to a loan from Infrastructure Development Finance Corporation (IDFC), Appleby recorded: “Also noted from an Option Agreement, that IDFC would also be exercising an option of 26 per cent on BVML. The probability of round tripping is very high given that IDFC (an Indian company) has issued capital to CEIL (Indian company) in exchange of shares pledged in MEL (holding company of BVML) and BVML.”
RESPONSE FROM MYTRAH ENERGY LTD:
R Somasundaram, Head, Strategic Affairs, Mytrah Energy Limited, Hyderabad, responds on behalf of Ravi Kailas:
Due to the tax treaty between India and Mauritius at that point in time, it was the preferred investment route for thousands of corporates, financial institutions, private equity funds and other business entities. All our companies have been duly incorporated in their respective jurisdictions as per applicable laws as well as duly registered/declared in India with RBI as well as tax authorities.
We are not aware of such a categorisation (of high risk by Appleby). We are not privy to the document you are referring to. We can more meaningfully comment if you can make available this document in your possession. We have had several loans from IDFC. Some of the loans are fully repaid and the rest are being serviced as per schedule.
We have changed the names of three of our companies once. Caparo Energy Limited was changed to Mytrah Energy Limited (MEL), Caparo Energy Investment Limited Mauritius was changed to Bindu Vayu Mauritius Limited (BVML) and Caparo Energy India Limited was changed to Mytrah Energy India Limited (MEIL). All the three name changes were done at the same time pursuant to the decision to establish the Mytrah brand as a common brand and also to avoid confusion and correlation with the Caparo Group. All the name changes were duly notified to all the regulatory authorities in respective jurisdictions including re-registration where necessary. Mr Ravi Kailas continues to be Director in BVML and Chairman of MEIL. There are no relations with late Angad Paul apart from their initial holding in the company through their family trust.
Subhash Chandra
Asked to provide the certificate, Appleby top brass decided against it. One email said Rory Gorman, then managing director of Appleby Fiduciary Business (Bermuda), “has an objection and is not prepared to sign the attached form”.
While Appleby showcased its services that facilitated loans for companies owned by Subhash Chandra to their prospective Chinese and Brazilian clients, it raised a red flag as well.
An Appleby internal memo in March 2014 said: “Please note the subject (Chandra) has provided a false declaration by answering no to question #6 of the Compliance form: ‘Have you ever been the subject of a judicial or other official enquiry’,” the compliance department pointed out, attaching two pdfs of news reports titled “Jindal extortion case: “Chargesheet filed against Subhash Chandra and two Zee editors” and “Zee vs Jindal: Court rejects Chandra’s plea for modification of order”.
A year later, in August 2015, Barclays Bank asked Appleby for proof of sources of funding of Veria and its ultimate beneficial owner.
The bank also sought a certificate from Appleby that the firm was “unaware of any activities” on the client’s part which led them to “suspect that the customer is or has been involved in criminal conduct or Money Laundering”.
Asked to provide the certificate, Appleby top brass decided against it. One email said Rory Gorman, then managing director of Appleby Fiduciary Business (Bermuda), “has an objection and is not prepared to sign the attached form”. His colleague Alison Dyer-Fagundo, then partner in Appleby Law (Bermuda), is quoted as: “I don’t think we should be doing these, I agree with Rory.”
RESPONSE from SUBHASH CHANDRA’S OFFICE
Asked to comment on the alleged “false declaration,” Subhash Chandra’s office said in an emailed response: “We are not privy to any records of Appleby and in fact no one is supposed to be privy to these as any such documents are supposed to be kept highly confidential between a law firm and their clients. You clearly seem to be going overboard if you or anyone has possession of such documents as that’s clearly in breach of confidentiality which will have its own consequences on Appleby and yourself/your firm.” Neither Rory Gorman nor Alison Dyer-Fagundo responded to emails.
Zee/ Essel Holdings Limited
The loan, Appleby records state, was “indirectly backed by 46 million fully paid up equity shares” of Zee held by Essel Holdings Limited (EHL), making prepayment necessary “upon fall in stock price of Zee by more than 40% since inception”.
Through a complex web of transactions, offshore companies of the Essel Group, promoted by Subhash Chandra, raised funds to repay debt and finance Veria Lifestyles, a venture he owns outside the Zee umbrella, by pledging promoter shares of Zee Entertainment Enterprises Limited (ZEEL), Appleby records show.
Appleby records show that a $62-million loan was taken from Credit Suisse “to finance existing offshore promoter debt” in 2013. This loan was given to SMTP Ltd (Mauritius) which, in turn, provided a convertible loan to Essel Holdings Limited (Mauritius), a company “indirectly wholly owned and controlled by” Chandra.
The loan, Appleby records state, was “indirectly backed by 46 million fully paid up equity shares” of Zee held by Essel Holdings Limited (EHL), making prepayment necessary “upon fall in stock price of Zee by more than 40% since inception”. This refers to the shares that Essel Holdings Limited, as one of the promoters, continues to hold in ZEEL since 2011.
BSE records of disclosures made by ZEEL regarding pledging of promoter shares since February 2012 do not include this pledging of 46 million shares in 2013. This $62-million loan, records show, was ostensibly meant to refinance a $55-million loan availed of by EHL three years ago.
In March 2010, EHL had acquired 21 million shares (then 4.85% of the paid up capital) in ZEEL from Delgrada Limited, a promoter company registered in Mauritius in 2000, for “nil consideration.” Delgrada is now Essel Media Ventures Limited. The same month, Deutsche Bank AG, Hong Kong Branch, gave a $55-million loan to EHL “secured by the company’s investment in ZEEL” and “repayable on 26 March 2013”.
Consider the financing of Veria. In 2002, it was launched in the US as a lifestyle TV channel and was, subsequently, repackaged as a “wellness” group comprising a TV network, an e-commerce web portal and retail outlets. Appleby records show that in 2010, the firm facilitated a $100-million loan from Credit Suisse AG, Singapore, for Borth Company Limited in British Virgin Islands. This loan was guaranteed by Delgrada for Borth to buy bonds of NatWell Synergies Investments Limited (BVI), the holding company for the Veria businesses.
Borth had the option to sell these bonds to Asia Today Limited (Mauritius) which operated from Hong Kong as a joint venture between Chandra and Star TV since the early 1990s and was wholly owned by ZEEL in 1999. Appleby also got Credit Suisse to extend a $100-million Letter of Credit facility to Asia Today “to guarantee the obligations of the Borth Company Limited.” This LC facility was guaranteed by ZEEL.
To refinance the $100-million loan to Borth, guarantor Delgrada took a $102.83-million loan on February 23, 2011. This loan was guaranteed by Erith International Limited, the holding company of Delgrada, and, later, by Winshire Holdings (Mauritius) Limited when it acquired 100% equity of Delgrada from Erith, and in the process Delgrada’s 10.73% equity in ZEEL, in April 2012.
Soon after the Essel Group companies, wholly owned by Subhash Chandra, arranged loans worth US$ 155 million, according to Appleby records, Veria International Limited was set up in Bermuda in October 2010 with NatWell Synergies Investment Limited (BVI) as its shareholder.
“Veria is a privately held company and has seen strategic investments of over US$200 million. I see it as a US$2 billion business in five years,” Chandra was quoted by Knowledge@Wharton in September 2009. Veria Living network renamed itself Z Living in October 2014.
At the centre of the wellness business, show Appleby records, NatWell Synergies Investment Limited (BVI) was also the sole shareholder of Natural Wellness Holding Corporation Limited (Bermuda) which, in turn, owned Natural Wellness Corporation Limited (Bermuda) and Wellness Bermuda Corporation Limited (Bermuda).
This structure, confirm records submitted to the County of Sullivan Industrial Development Agency in New York State, was in place till August 2015 and also covered two companies Natural Wellness UK Limited and Veria Lifestyle INC (USA) set up in 2007 and 2013 respectively. Subsequently, according to a Bermuda court notice on November 23, 2015, Natural Wellness Holding Corporation Limited (Bermuda) and Natural Wellness Holding Limited (Bermuda) merged with NatWell Synergies Limited (BVI). Wellness Bermuda Corporation Limited also merged with another BVI company Wellness Investment Holdings Limited which held stake in Veria International Limited since October 2011.
In 2014, Appleby noted that, following an increase in share capital, nine shares of Veria International Limited were issued at $1 per share with a premium of $10 million per share to Pan India Network Infravest Private Limited where Subhash Chandra owned 74.65% and his wife Sushila Goenka owned 25.35%.
RESPONSE from SUBHASH CHANDRA’S OFFICE
The Indian Express sent an email to Chandra listing the loans specified above. Asked if ZEEL disclosed the pledging of promoter shares to shareholders and regulators, Subhash Chandra’s office said in an emailed response: “We would like to mention that Dr Chandra is not an executive director nor holds any post in ZEE except for being a non executive Chairman. We would confirm that the companies (Delgrada and EHL) are Essel Group companies. We also confirm that all activities in these companies satisfy/comply with all regulatory aspects in their respective jurisdictions including India.”
Sanjay Chhabra
Appleby records show that Sanjay Chhabra’s Dolomite Restaurants and Sierra Nevada Restaurants Pvt Ltd are joint venture companies with UK-based International Market Management (UK) Ltd, which invested in these companies through its 100 per cent subsidiary IMM Associates Mauritius. Paradise Papers: The directors of Dolomite Restaurants are Sanjay Chhabra, Saurabh Khanijo and Jasper Timothy Mathew Reid.
Delhi-based restaurateur Sanjay Chhabra, owner of burger chains in India, entered into a joint venture with a UK firm which invested in India through Mauritius with the help of offshore legal firm Appleby.
Appleby records show that Chhabra’s Dolomite Restaurants and Sierra Nevada Restaurants Pvt Ltd are joint venture companies with UK-based International Market Management (UK) Ltd, which invested in these companies through its 100 per cent subsidiary IMM Associates Mauritius.
Dolomite Restaurants Pvt Ltd’s 50 per cent shares are with Carnation Hospitality and the remaining 50 per cent with IMM Associates Mauritius, according to documents dated March 31, 2015 in Appleby records. The directors of Dolomite Restaurants are Sanjay Chhabra, Saurabh Khanijo and Jasper Timothy Mathew Reid. Another UK-based director, David Coldwells Stewart, resigned from the position on April 1, 2016.
IMM Associates Mauritius was incorporated on May 2, 2014 in Mauritius as a 100 per cent subsidiary of International Market Management (UK) Ltd. IMM Associates also holds 50 per cent shares of Sierra Nevada Restaurants Pvt Ltd in which the remaining 50 per cent shares are with Rollatainers Ltd. Sanjay Chhabra and Saurabh Khanijo are directors of Sierra Nevada Restaurants Ltd.
Rollatainers was incorporated on February 14, 1968 in Delhi and its directors were Kolkata-based K Vishwanathan, Ramesh Bhargava, Nishit Bhargava and M K Sen and Delhi-based Motilal Bhargava and Somnath Nagpal.
Rollatainers’ 100 per cent subsidiary is Boutonniere Hospitality Pvt Ltd, which is based at Dharuhera in Rewari district of Haryana. Rollatainers holds beneficial interest in shares of Carnation Hospitality.
According to Appleby records, IMM Associates Mauritius and Rollatainers hold 20,00,000 shares each, at Rs 10 per share value, in Sierra Nevada Restaurants. In Dolomite Restaurants Pvt Ltd, IMM Associates Mauritius and Carnation Hospitality hold 19,99,971 shares each at Rs 10 per share value.
RESPONSE
Sanjay Chhabra did not respond to a questionnaire emailed by The Indian Express to IDs listed in RoC documents of Dolomite Restaurants and Sierra Nevada Restaurants.
Jasper Reids, director in both of these companies on behalf of IMM Associates, did not respond to emails and text messages from The Indian Express seeking comment.
D
Sunilkumar Khushalchand Desai
Mumbai
Offshore jurisdiction
Malta
Sunilkumar Khushalchand Desai, who lives in Savani Apartments in Ghatkopar West, confirmed that he is a Director at Sovika Aviation, Sovika Chemical and Golden Aviation. He is the CEO and Managing Director of Prashi Pharma, according to the firm’s web site. His son Manthan Desai is a Director. The firm, according to the web site, manufactures pharmaceutical products and exports them to several countries in Africa.
Another Desai family member, Kunal Desai, who is Director (Sovika Group), is in charge of a joint venture with Prashi Pharma, “to create a pharmaceutical production company in the name of Prashi Pharma Malta Ltd”. The web site states that a 4,000 sq m manufacturing plant is currently under construction in Malta.
Malta data reveal that Sunilkumar Khushalchand Desai and his two relatives are named as Directors, judicial representatives and legal representatives of three companies. Two other firms, Ramla Trading Ltd and Sovika Holding Malta Ltd are listed as shareholders of one.
RESPONSE: Desai said: “We do have some plants abroad, but they are not offshore companies.”
– For Indian Express, by SRINATH RAO, Mumbai
Kiritkumar Chimanlal Doshi & Hitesh Chimanlal Doshi
Mumbai
Offshore jurisdiction
Malta
Kiritkumar Doshi and Hitesh Doshi are shown as Directors, judicial representatives and legal representatives of a company whose number is listed in the Malta registry data. The shareholders are Cesare Bonetti India Pvt Ltd and Ecovis (Malta) TFC Ltd.
Hitesh Doshi, along with his brother Viren Doshi, is among the four directors of Waaree Khabiya Solar Ventures. Kiritkumar Doshi is listed as a Director on the web site of the Waaree Group. The web site describes the firm as a leading provider of solar streetlights, solar rooftops, solar water pumps and solar water heaters among other products.
According to the web site, the firm has a presence in 68 countries, with 26 sales offices in India and 8 abroad. The site says Hitesh Doshi is also president of the Mumbai-based philanthropic organisation Jain Education and Empowerment Trust.
RESPONSE: Hitesh Doshi and Kiritkumar Doshi were not available for comment at their addresses in Mahagiri Apartments in Kandivali East, Mumbai. Their family declined to provide any details.
– For Indian Express, by SRINATH RAO, Mumbai
DS Construction, ICICI Bank and Appleby
Appleby sent ICICI Bank Ltd, NBCC Place, New Delhi an invoice for $3026.41 on January 26, 2012. This invoice was for “professional services” provided by Appleby to ICICI with regard to “review of the documents” Facility Agreement.
Indian Express Records show that a Non-Disposal Undertaking (NDU) was signed in New Delhi between H S Narula, Elsingham Holdings Ltd and ICICI Bank Ltd (Bahrain Branch) on December 28, 2006.
Paradise Papers: Eros International in Appleby records on Indians in Isle of ManParadise Papers: Eros International in Appleby records on Indians in Isle of Man
Construction major DSC Ltd (DS Construction Ltd), which bagged several road and railway projects including the Delhi-Gurgaon Expressway, obtained a loan of $135 million from ICICI Bank in 2006. Of this, $100 million was disbursed within 20 days of the agreement, according to records of offshore legal firm Appleby.
DSC Ltd later defaulted on loan repayment and Appleby documents show that ICICI Bank took the advice of the legal firm on the outstanding loan amount — it was settled in 2016. DSC Ltd was incorporated on October 13, 1978 to acquire the businesses of M/s Thakur Enterprises, New Delhi and M/s DS Narula & Company, New Delhi. At the time it was being incorporated, Darshan Singh Narula and his four sons — Balbir Singh, Varinder Singh, Narinder Singh and Harpinder Singh — were its shareholders.
According to documents with Appleby, Elsingham-DSC Mauritius Private Ltd, one of the holding companies of DSC Ltd, borrowed $135 million from ICICI Bank Ltd on December 26, 2006. Of this, $35 million was disbursed on December 29, 2006; $10 million on January 9, 2007; and $55 million on January 16, 2007. In all, records show, $100 million was disbursed within 20 days of the agreement.
Records show that a Non-Disposal Undertaking (NDU) was signed in New Delhi between H S Narula, Elsingham Holdings Ltd and ICICI Bank Ltd (Bahrain Branch) on December 28, 2006. Another NDU was signed in New Delhi between British Virgin Islands-based Alphamatic Investments Ltd, Delhi Gurgaon Super Connectivity Ltd and ICICI Bank Ltd (Bahrain Branch) on December 28, 2006. Elsingham Holdings Ltd signed a Power of Attorney in Port Louis, Mauritius in favour of ICICI Bank Ltd (Bahrain Branch) on December 27, 2006.
A Lenders’ Agreement was signed on March 17, 2007 between ICICI Bank UK PLC and ICICI Bank Ltd (Bahrain Branch). It stated that ICICI Bank Ltd (Singapore Branch) was Arranger, Standard Bank (Mauritius) the Mauritian Security Agent and ICICI Bank Ltd (Bahrain Branch) the Facility Agent. The Depository Participant for the $135 million loan was Alankit Assignments, a Delhi-based company.
There was also an Amendment Agreement dated April 3, 2007 between Elsingham DSC Mauritius Private Ltd (Borrower), Elsingham Holdings Ltd, Elsingham Holdings Mauritius Ltd, DS Constructions Ltd, H S Narula (Coventantors) and ICICI Bank Ltd Bahrain Branch (as Facility Agent) in relation to the $135 million loan agreement dated December 28, 2006.
But when a problem arose in loan repayment, ICICI Bank began consulting Appleby on the issue. On February 7, 2011, records show, Abhijeet Das of ICICI Bank wrote to Deep Roy of Economic Laws Practice to “engage” him for “conducting a review of certain documents…”
ICICI Bank requested him to “conduct a review of the documents with regard to Facility Agreement and the various security agreements and to confirm to ICICI Bank the enforceability of the various securities/contractual comforts and to clearly indicate the steps required to enforce such security/contractual comforts in case of an event of default under the financing documents”.
Das made another request: “Issue a memorandum incorporating the views of the counsel in such other jurisdictions (as may be required) regarding the enforceability of the above mentioned security/ contractual comforts and the steps to be taken for enforcement of such security.”
Records show that two days later — February 9, 2011 — Roy wrote to Matthew Stocker of Appleby: “We have received a request for a fee quote from ICICI Bank Limited for a loan documentation review for two existing loan transactions and for preparation of a memorandum with the details of the enforcement steps in case of an event of default… Borrower is Elsingham DSC Mauritius Private Ltd. Elsingham Holdings Mauritius Ltd (EHML, which holds 90 per cent of the shareholding of the borrower) and Elsingham Holdings Ltd (EHL, a BVI company, which holds 100 per cent of EHML) have provided corporate guarantees…”
Accordingly, Appleby sent a three-page Memorandum to ICICI Bank Ltd, NBCC Place, New Delhi on May 4, 2011. It stated: “It is not necessary in order to ensure the legality, validity, enforceability or admissibility in evidence in proceedings of the obligations of the BVI Shareholder under the Subject Agreements that the Subject Agreements or any other document be notarised, filed, registered or recorded in the British Virgin Islands.”
Appleby quoted a Reciprocal Enforcement of Judgments Act, 1922 and advised, among other things, that a judgment may be registered under the Act where “the foreign court had jurisdiction in the matter and the BVI Shareholder either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process”.
For this memorandum, Appleby sent ICICI Bank Ltd, NBCC Place, New Delhi an invoice for $3026.41 on January 26, 2012. This invoice was for “professional services” provided by Appleby to ICICI with regard to “review of the documents” Facility Agreement; Elsingham Holdings Ltd, HS Narula, Alphamatic Investment Ltd, etc.
RESPONSE from DSC
DSC Ltd’s director Narinder Singh Narula said: “H S Narula is a British Citizen and is holding a British Passport. His investments are governed by British Laws. He does not have any income in India. Except for owning 10% shares i.e. 2500 shares of US$ 01 each (Rs 1,12,200) of Elsingham DSC Mauritius (Pvt) Ltd, DSC Limited does not own any assets or Companies anywhere outside India. Subsequent to Demerger, these 2500 shares are presently owned by DSC Engineering (Pvt) Ltd.
“DSC Limited has not taken any loan from any Bank outside India, including any Indian banks in Bahrain and Mauritius. H S Narula, who is a British Citizen, has no direct/indirect role/interest in Elsingham DSC Mauritius Private Limited, Alphamatic Investment Limited, Elsingham Holding Limited and Apollo Enterprises. Balbir Singh Narula is a Director of Apollo Enterprises Limited. However, he does not have any Shareholding and/or investment in Apollo Enterprises. Besides aforementioned, none of the other Narula family has any role/interest in above stated Companies.
“Elsingham DSC Mauritius Private Limited (previously known as Alphamatic Investments (Mauritius) Limited) was never a Holding Company of DSC Limited. Previously Elsingham Holdings Mauritius Limited was the holding Company, however presently Apollo Enterprises Ltd is the Holding Company. US $135 million loan was granted by ICICI Bank-Bahrain, Singapore & UK branches to Elsingham DSC Mauritius (Pvt) Ltd for the purposes of investment in the Infrastructure Projects/Companies in India. The said loan amount was invested by Elsingham DSC Mauritius (Pvt) Ltd in the Optionally Convertible Debentures (OCD) of DSC Limited. DSC Limited have as on date, already redeemed 97% of the said OCDs and now 03% is only balance.
“The entire loan of ICICI Bank has been settled by Elsingham DSC Mauritius (Pvt) Ltd and as on date there is no outstandings whatsoever towards ICICI Bank. The investment in 2500 shares of Elsingham DSC Mauritius (Pvt.) Ltd. has been duly reported to RBI through Authorized Dealer Bank by DSC Limited vide letter dated 15.12.2006.
“As regards OCD reporting to RBI, the same was duly done and the RBI had confirmed the same vide its order dated 21/7/2010. DSC Limited have duly reported the investment of 2500 shares and aforesaid OCD is in its Returns and Balance Sheets to all Authorities including Income Tax Department. H S Narula does not have any income from India, thus he is not required to file any Income Tax Return in India.”
Indra Durlabhji
Jaipur
Overseas jurisdiction
Malta
Indra Durlabhji, 72, is managing director of Lee Construction Pvt Ltd in Jaipur. Registry data show that along with five Mumbai-based Indians, he is a Director as well as judicial representative and legal representative of a company, which is not named.
RESPONSE: Durlabhji said: “There is Shyam Ruia’s Raptakos, Brett & Co. Ltd., where I am a non-working Director. We started a small branch in Malta in 2015-end, to study the possibilities of exporting to the European Union. We (Raptakos) are a pharmaceutical company and we make Threptin Biscuits, which are medical biscuits. However, not much has happened (at the Malta branch). We took permission from the RBI. As for IT returns, if there is a profit, it will be reflected in Raptakos’ (accounts).”
– For Indian Express, by HAMZA KHAN, Jaipur
Dilnashin Sanjay Dutt
Mumbai
Overseas jurisdiction
Bahamas
Dilnashin Sanjay Dutt is the wife of filmstar Sanjay Dutt. She is popularly known as Manyata. Before marrying Dutt, Manyata appeared in an item song in Prakash Jha’s 2003 film Gangaajal.
She is on the board of Sanjay Dutt Productions Pvt Limited. Apart from this, she is on the board of several companies including Diqssh Energy Pvt Ltd, Sparkmatics Energy Private Limited, Diqssh Realty Private Limited, Brick By Brick Realtors Private Limited, Duto Commodities Private Limited, Diqssh International Private Limited, Seventy MM Movies Private Limited and Transparency Entertainment Private Limited.
A bunch of documents in the Bahamas registry show that Nasjay Company Limited was set up in the Bahamas, and Dilnashin Sanjay Dutt was appointed its Director, Managing Director, President and Treasurer in April 2010. She appended her signature to the agreements, and her address appears as Bandra West, Mumbai. The 2010 capital of the company is shown as $ 5,000.
RESPONSE: A spokesperson for Manyata Dutt said: “As per the requirements of provisions of Income-tax Act, 1961, all the properties, company or body corporate or shares in any company are declared in the balance sheet.”
Emaar MGF Land / JP Morgan
Appleby’s Mauritius office went ahead with the assignment even though its own compliance department flagged a number of ongoing investigations into corruption charges against Emaar MGF in India.
Appleby records show that JP Morgan wanted the documents prepared for the share transactions vetted within three days.
Months before Emaar MGF filed for demerger, financial services major JP Morgan approached Bermuda law firm Appleby in September 2015 for legal assistance in selling over 7 million equity shares it held in the Indian realty developer to Hong Kong-based asset management firm SSG Capital Management, Appleby records show. SSG had already invested Rs 600 crore in Emaar MGF in January 2015. Dubai-based Emaar Properties PJSC and India’s MGF Development Ltd announced the decision to end their joint venture — Emaar MGF — through reorganisation and demerger in April 2016.
Appleby records show that JP Morgan wanted the documents prepared for the share transactions vetted within three days. Appleby’s Mauritius office went ahead with the assignment even though its own compliance department flagged a number of ongoing investigations into corruption charges against Emaar MGF in India.
In 2007, JP Morgan Mauritius Holdings II Limited (JPII) — a subsidiary of JP Morgan Chase & Co — picked up 7,237,704 equity shares in Emaar MGF. According to Appleby records, JP Morgan Mauritius Holdings VI Limited (JPVI), the parent company of JPII, financed the share acquisition through an interest-free loan of $24.67 million to JPII.
Subsequently, JPVI transferred its shareholding in JPII to its wholly-owned Mauritius subsidiary Indocean Financial Holding Limited (Indocean) along with all rights in the loan to JPII.
In September 2015, show Appleby records, JP Morgan proposed to transfer the 7,237,704 Emaar shares from JPII to Indocean which, in turn would transfer the shares of JPII to JPVI. Thereafter, the SSG group was to acquire Indocean
– ie, the Emaar shares — from JPVI.
While the 7,237,704 Emaar shares were then valued at US$2.5 million, show Appleby records, Indocean would pay JPII $1 in cash and the remaining price would be set off against “a certain amount of” the $24.67 million loan owed by JPII. According to Appleby records, the balance of the loan would be “forgiven” by Indocean.
“Given that Indocean will be transferred to SSG, it is crucial that no part of the loan be outstanding after closing of the sale of the Emaar Shares,” read the brief for Appleby, which was to ensure that “an unconditional and irrevocable release” be “entered into between JPII and Indocean.”
Underlining the urgency, in its first email on the assignment to Appleby on September 14, 2015, JP Morgan sought a fee quote “no later than 15 September 2015” and once approved, Appleby’s comments on the share transfer documents “no later than 17 September 2015.”
Under section 9.1(i) of the Income Tax Act, “all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India” are taxable in India.
Appointed as the Mauritian law advisor to facilitate the transactions, Appleby did a “world check” on the firms involved, on September 15. Its compliance department flagged these cases against Emaar MGF:
Feb 2008: Case registered by Delhi police for suspected involvement in land scam.
Dec 2009: Allegedly involved in money laundering scam.
Feb 2012: Chargesheet filed by CBI under Prevention of Corruption Act as accused in the Andhra Pradesh Industrial Infrastructure Corporation (APIIC)-Emaar properties scam.
June 2014: Office premises searched by Income Tax department for alleged tax evasion.
Asked to take a call, Appleby’s dispute resolution department held that these would not “affect the present engagement”. Approving the assignment worth $8,000-10,000 Malcolm Moller, head of Appleby’s Mauritius operations, wrote: “It should be ok.”
RESPONSE
A spokesperson of Emaar MGF Land Ltd stated: “JP Morgan has been a shareholder of the company since 2007, holding approximately 0.7 per cent equity shares. As per the records of the company, the said entities transferred these shares during 2015 and 2016. These transactions were secondary market transactions between the said entities, and the company has no role or financial involvement in such transactions, except recording the name of the shareholders in its records. No money was either paid by the company nor any money was received by the company due to such transactions. We are not privy to any documents relating to these transactions. Emaar MGF is a law abiding corporate citizen and has always operated itself in compliance with the law of the land.”
JP Morgan did not respond to questionnaires emailed by The Indian Express.
EROS International
Paradise Papers: According to the records, EROS International Plc, a holding company of EROS Group that was incorporated in Isle of Man on March 31, 2006, bought shares for USD 1290355.78 between February 24, 2009 and October 24, 2011 and earned USD 2781164.18 by selling them.
Eros Entertainment, Paradise Papers, ERos Paradise Papers, Bollywood, Paradise Papers, What is Paradise Papers, Indian Express Paradise Papers, ICIJ, Panama Papers, Offshore accounts, corruption, black money Paradise Papers: One document said EROS International Plc had a transaction value of GBP 22.5 million by placing of 15,625,000 shares at 176 p each.
Entertainment Major Eros is one of 12 companies named in a law firm’s email about Indian entities using the Isle of Man as a location to establish holding companies for listing in the Alternative Investment Market (AIM), records of Appleby show.
According to the records, EROS International Plc, a holding company of EROS Group that was incorporated in Isle of Man on March 31, 2006, bought shares for USD 1290355.78 between February 24, 2009 and October 24, 2011 and earned USD 2781164.18 by selling them.
Toby Ward, head of the London office of Isle of Man-based law firm Dickinson Cruickshank, which later merged with Appleby, wrote an email addressed to “Jones Tim” on August 22, 2007: “We have seen a number of Indian companies using Isle of Man as a location within which to base a holding company for listing on AIM. To date 12 companies either with substantial business interests or looking to invest in India have used the Isle of Man in this way.”
The email mentioned Hirco Plc, Trinity Capital Plc, Unitech Corporate Parks Plc in property investment; Eros International Plc and UTV Motion Pictures Plc in entertainment; and Eolvence India Holdings Plc and Origo Sino-India Plc in private equity.
On September 23, 2015, Appleby employee Alicia Cain wrote in an internal email: “Eros is an Isle of Man company. Some of its shares are held by a Jersey trust. I have been providing very limited input on the Jersey trust elements, but we have not been asked to assist further for approximate 3 weeks…”
According to Appleby documents, Eros International Plc was floated as “Integrated media and entertainment group that owns and distributes Bollywood content globally in a variety of formats.” One document said EROS International Plc had a transaction value of GBP 22.5 million by placing of 15,625,000 shares at 176 p each.
The red-herring-prospectus of EROS Group stated: “Eros International Plc which is engaged in the business of producing, commissioning, distributing and exploiting films in all formats globally, was incorporated as a limited company in the Isle of Man on March 31, 2006, under the Isle of Man Companies Act, 1931. Arjan Lulla, founder of the Eros Group, is honorary life president of Eros International Plc. The promoter of it is Beech Investments Limited (Isle of Man), which holds 68.8% of the issued share capital of Eros International Plc. Ganges Trust, a fully discretionary trust, holds 66.0% of Beech, through Eros Ventures Limited, a British Virgin Islands company in which Ganges Trust holds 100.0%.
The remaining shareholding in Beech is primarily held by Ganesh Trust, another fully discretionary trust. SG Hambros Trust Company (Channel Islands) Limited, Jersey are the trustees of the fully discretionary trusts, Ganges Trust and Ganesh Trust. Arjan Lulla is one of the discretionary beneficiaries of the Ganges Trust. Eros International Plc was listed on the AIM on July 4, 2006. The ordinary shares of Eros plc are presently listed on the AIM.”
RESPONSE
Amita Naidu, VP–PR, Eros International Media Ltd, responds: The promoter Kishore Lulla is a British Passport holder and an NRI for more than 35 years having moved out of India in the 1980s to set up international operations mainly in UK, USA, Middle East, Africa etc. for Bollywood films with Eros International group. Most of the revenues and profits of Eros International at the time also originated outside of India, hence after taking due tax advice, advisors recommended setting up an Isle of Man company to hold the business at the time of the 2006 AIM listing.
Kishore Lulla and his family and Vijay Ahuja and his family (all NRIs) are the beneficiaries of Beech and Eros Ventures which are discretionary trusts. Arjan Lulla and Sunil Lulla are not beneficiaries and have no role to play in Beech or the trusts. Sunil Lulla is the Managing Director of the Indian listed subsidiary Eros International Media Limited. Copsale (BVI) is a wholly owned subsidiary of Eros International Media limited and there are no promoter cross holdings. Eros Group has no role to play and has no interest in the trusts.
All the proceeds were received in the company in exchange for issue of new shares and the proceeds were applied in the film business.
Eros International Media Limited (NSE/BSE Indian listed entity) of the Group has transactions with Eros Worldwide FZ LLC (Dubai) which is a wholly owned subsidiary of Eros International Plc (Isle of Man) the ultimate holding company. These transactions related to the purchase and sale of films as film rights are exported. All the transactions are disclosed as per disclosure norms and all compliances with respect to RBI permissions and listing rules are complied with as applicable.
Essar/ Ruia
Loop: Huawei supplies, Kolkata loan
Under the MoU, Huawei would not take any legal action if Loop paid its entire dues — $8,28,456 — to Huawei by December 15, 2013, failing which Essar Global Fund Ltd would be liable to make the payment “promptly upon demand”.
Appleby received two letters from SREI Infrastructure Finance Ltd at the Cayman Islands address of Essar Global Ltd on October 30 and November 21, 2013. (Source: File)
Paradise Papers: Eros International in Appleby records on Indians in Isle of ManParadise Papers: Eros International in Appleby records on Indians in Isle of Man
The Essar Group provided corporate guarantee to Huawei International Pte Ltd that supplied telecom equipment, and to SREI Infrastructure Finance Ltd that loaned Rs 200 crore to Loop Telecom Limited, records of offshore legal firm Appleby show.
In an ongoing case related to the 2G scam, the CBI chargesheet claimed that Loop Telecom Ltd was a front company of the Essar Group and secured several bank loans on the basis of corporate guarantees by Essar.
Appleby received two letters from SREI Infrastructure Finance Ltd at the Cayman Islands address of Essar Global Ltd on October 30 and November 21, 2013. According to the letters, the Kolkata-based company provided Loop Telecom Ltd a loan of Rs 200 crore, which was backed by certain security interests and a guarantee by Essar Global Ltd, the holding company of Essar Group.
The first letter was a reminder that the loan — Rs 260.80 crore, along with interest — was due for repayment on November 1, 2013. Three weeks after the deadline, the second letter warned that default would invite legal action.
Appleby records also show that Essar Global Limited gave corporate guarantee to Singapore-based Huawei International PTE Ltd in September 2009, backing payment obligations of Loop Telecom Ltd for the supplies made under a contract between Huawei and Loop. After Loop delayed making some payments to Huawei due to a “tough phase” in business, the three companies, Appleby records show, held a series of discussions to reach an amicable settlement by executing an MoU in October 2013.
Essar accepted the terms “as a reaffirmation of its obligation under the guarantee dated 17 September 2009 on behalf of LTL and in favour of Huawei”.
Under the MoU, Huawei would not take any legal action if Loop paid its entire dues — $8,28,456 — to Huawei by December 15, 2013, failing which Essar Global Fund Ltd would be liable to make the payment “promptly upon demand”.
Set up in Cayman Islands in September 2005, Essar Global Ltd was renamed Essar Global Fund Ltd (EGFL) in March 2013.
In case of default or dispute, the MoU said, the issue would be referred to and resolved by arbitration in Singapore.
RESPONSE
In an email, an Essar spokesperson said: “Details relating to guarantees provided by Essar Global Fund Ltd to SREI and Huawei and the guarantee charges paid by the Khaitan Group to EGFL in this regard were provided to the investigating authorities at the time of investigation itself.
“The promoters of Essar and Khaitan Groups have a family relationship. Transactions between companies owned by Khaitans and Essar Global Fund Ltd are normal business/commercial transactions which are fully disclosed in public documents in India and abroad and are fully permitted under the laws of the land.”
In an email, Nalin Khaitan, Vice Chairman, Khaitan Holdings, said: “The transactions between Khaitan and Essar with respect to guarantees mentioned by you were at arm’s length, fully compliant with the law and have been fully disclosed to the honorable special court. The matter is presently sub-judice and therefore it would not be appropriate for us to comment further.”
A spokesperson for SREI said: “As a standard practice, we do not discuss client specific details in public. However, we can confirm that we had extended the loan and recovered our money. It would not be fair for us to comment further on this topic.”
Huawei International Pte Ltd did not respond to queries for comments.
Essar names Greenpeace and Unicef, they deny links
Ruia family trusts Triton and Virgo had a set of five companies each as beneficiaries — four owned by a family member from each branch of the Ruia family. The fifth beneficiary of the Virgo Trust, claim Appleby records, was UNICEF, and of the Triton Trust, Greenpeace International. Trust documents, however, show two companies — Wilderness Lodge Ltd and Horseshoe Ridge Ltd — as the respective fifth beneficiary.
“At this time, we are not aware of any relationship or affiliation between UNICEF and the Virgo Trust or the Wilderness Lodge Limited,” said Najwa Mekki, chief, Media Section, UNICEF.
Greenpeace in an email said: “Neither Greenpeace International nor Greenpeace India has any knowledge of ever having been named as a beneficiary of the Triton Trust, whether directly or through Horseshoe Ridge Limited. If they had done so, that would have been beyond our control and we would not accept any funds from such a source. The possibility that tax avoiders may be using the names of campaign groups is distasteful — our financial independence is critical to holding those in power to account.”
“Greenpeace International’s financial records go back to 2006. A thorough check showed that Greenpeace International has not received any money from Triton Trust or Horseshoe Ridge Limited. GP India has likewise done a detailed check of its financial records going back to 2006 and it does not find any contribution from the said entities — Triton Trust and Horseshoe Ridge Limited,” Greenpeace said.
Essar did not provide a specific reply to a question on Greenpeace and UNICEF.
Khaitan managed Ruia family trusts
Besides being co-settlor of Global Trade and Amber Trade trusts, Khaitan also owned Grand Delmore Investments Limited, a Cayman Islands company set up in January 2006, which became the sole beneficiary of the two BVI trusts.
According to Essar Group, EGFL is an investment fund managed by Essar Capital Limited and controls assets diversified across the core sectors of energy, metals and mining, infrastructure and services.
Appleby records investigated by The Indian Express show that through intricate and multiple layers, for five years since 2006, Ishwari Prasad Khaitan, promoter of Loop Telecom, managed two offshore family trusts of his brothers-in-law Sashi and Ravi Ruia of the Essar Group.
These two trusts in Cayman Islands owned Essar Global Limited, the holding company of Essar Group, and a bunch of other offshore companies.
Incidentally, in a case related to the 2G scam, countering CBI’s allegation that Loop was Essar’s “alter ego”, both Khaitan and the Ruias claimed that Loop promoters Ishwari Prasad Khaitan and wife Kiran Khaitan had independent sources of finance and were not in collusion with promoters of the Essar Group for acquiring 2G spectrum licences between 2006 and 2008.
Appleby records show the Khaitan-Ruias link during 2006-2011 when Khaitan owned four companies that managed the Ruia trusts.
“In line with a family arrangement made in 2005,” according to Appleby records, the Ruias set up two trusts in Cayman Islands in July 2006 to “settle a substantial part of the assets and interest of the family. equally into two parallel trust structures — one for the SNR branch The Virgo Trust and the other for the RNR branch The Triton Trust.”
SNR refers to Sashikant (Sashi) Nandkishore Ruia and RNR to Ravikant (Ravi) Nandkishore Ruia. The Triton and Virgo trusts held 100 per cent share in two Cayman Islands companies — Copper Canyon Holdings Limited and Kettle River Holdings Limited, respectively — which together owned Essar Global Limited, the group’s holding company set up in Cayman Islands in September 2005 and renamed Essar Global Fund Limited (EGFL) in March 2013.
According to Essar Group, EGFL is an investment fund managed by Essar Capital Limited and controls assets diversified across the core sectors of energy, metals and mining, infrastructure and services. The aggregated revenues of the Fund’s portfolio companies total $27 billion.
Four Cayman Islands companies with the same address served as Enforcer and Protector of the two trusts — Grand Escalada Investments Ltd and Astra Star Investments Ltd for The Virgo Trust; and, Grand Richmond Investments Ltd and Grand Pinnacle Investments Ltd for The Triton Trust.
While the two branches of the Ruia family held nominal shares — again through layered ownership — in the Enforcer and Protector companies of their respective family trust, it was Khaitan who owned all four controlling companies — first directly and then through two trusts in British Virgin Islands, Global Trade and Amber Trade.
Khaitan held 98 per cent share in each of the four controlling companies — Grand Escalada, Astra Star, Grand Richmond and Grand Pinnacle — when these were set up in April 2006. He transferred those shares to Appleby Trust (Cayman) Ltd, the trustee of Global Trade and Amber Trade Trusts, soon after the two BVI trusts were set up in May 2007.
Besides being co-settlor of Global Trade and Amber Trade trusts, Khaitan also owned Grand Delmore Investments Limited, a Cayman Islands company set up in January 2006, which became the sole beneficiary of the two BVI trusts.
A month after the two Khaitan-owned BVI trusts were put in place, Telecom Holdings (Cayman) Limited was set up in June 2007 under the ownership of the Ruia family trusts Triton and Virgo through Copper Canyon Holdings Limited and Kettle River Holdings Limited. In March 2008, all shares of Telecom Holdings were mortgaged to Standard Chartered Bank to secure an unspecified loan.
This intricately layered structure of ownership and control, according to an Appleby declaration to Standard Chartered Bank (Switzerland), was in place at least until October 2011.
In December 2011, the CBI chargesheeted Essar vice-chairman Ravi Ruia, directors Anshuman Ruia, Vikas Saraf, and Loop Telecom promoters I P Khaitan and Kiran Khaitan in a case related to the 2G scam.
Records show that on December 20, 2012, the Ruias set up a new trust, Iris, with all eight members from the two family branches and a “charitable & CSR” company, Cypresses Foundation Limited, as its beneficiaries. All shares held by Virgo and Triton trusts in at least five BVI, Cayman Islands and UAE companies were transferred to The Iris Trust. Appleby Trust (Cayman) Ltd that served as the trustee of Khaitan’s Global Trade and Amber Trade trusts became the trustee of The Iris Trust.
The urgency to give shape to the new structure was evident in an internal Appleby email of December 11, 2012: “Cypresses Foundation Limited is to be a company limited by guarantee with charitable objects to be formed today on an express basis, for which Appleby Trust will provide directors and will act as A Shareholder. The B Shareholder will be Essar Global Limited.”
John S Riches, a London-based wealth planner and “a confidante” of the Ruias, was chosen as Appointer of The Iris Trust and R&H Enforcer Limited, a Cayman Islands company, took charge as Enforcer.
While setting up The Iris Trust, the Ruias overhauled the two original trusts. Riches was also appointed Appointer in Virgo while London-based lawyer Peter Leach took the responsibility in Triton.
Appleby was instructed to liquidate the four companies that served as Protectors and Enforcers for Virgo and Triton, as well as their controlling trusts, Global Trade and Amber Trade owned by Khaitan, at the end of the financial year in March 2013.
RESPONSE:
In an email, an Essar spokesperson said: “The Virgo and Triton Trusts (‘Trusts’) were settled under the STAR laws of the Cayman Islands in 2006. The Trusts are discretionary trusts, and the beneficiaries of the Trusts include companies whose 100% shareholders are the family members of Mr Sashikant Ruia and Mr Ravikant Ruia. 100% equity stake in Essar Global Limited (now renamed as Essar Global Fund Limited) is indirectly held by the Trusts.
“The existence and structure of Trusts has previously been disclosed to the relevant regulatory authorities, as required. The prospectus of Essar Energy Limited (‘EEL’) filed with the UK authorities, which is available in public domain confirms such disclosure to the UK authorities. The Trusts have also been disclosed to the Reserve Bank of India.
“Further, the beneficiary companies of the Trusts, owned by Ruia family members, have also been fully disclosed by such family members in their respective income tax filings on an annual basis in accordance with the income tax provisions.. The Trusts have not made any substantive distributions to any beneficiary till date.
“The administration, control and management of the Trusts has been with the trustees of the Trusts, which are globally recognised independent and professional institutions of high pedigree. The Trusts, being discretionary trusts established under STAR laws, are by their very nature such that they are controlled by the trustees and not by the beneficiaries,” the spokesperson said.
In an email, Nalin Khaitan, Vice Chairman, Khaitan Holdings, said: “Please note that no one from Khaitan Holdings is beneficiary of these Trusts nor do we control these Trusts.”
FIITJEE/ Qatar’s Qinvest’s Mauritius-based QLearn
The Declaration of Trust dated July 16, 2015 by QLearn in favour of Ambit Capital Private Limited states: “The owner (QLearn) had agreed to sell the shares of the Company (FIITJEE) to the beneficiary (Ambit Capital) pursuant to the Share Purchase Agreement.”
Mauritius-based QLearn, a subsidiary of Qatar’s Qinvest, sold 19,52,907 shares of Indian coaching class giant FIITJEE for over Rs 36 crore to Mumbai-based Ambit Group in July 2015, according to records of offshore legal firm Appleby.
Since the Ambit Group is an investee company of Qinvest (Qinvest has substantial stakes in Ambit), the 2015 transaction between QLearn and Ambit Capital Private Limited amount to sale of shares between its own companies.
In Appleby records, there is a declaration by Qinvest dated July 16, 2015: “We shall procure that QLearn, our wholly owned subsidiary, shall take all steps and actions and execute all documents as required pursuant to the share purchase agreement dated 24 April 2014 by and between us, Ambit and QLearn and the Deed. We shall also ensure that QLearn remains our wholly owned subsidiary until such time as the Shares (as defined in the Deed) are transferred to Ambit or to a person nominated by Ambit.”
The Declaration of Trust dated July 16, 2015 by QLearn in favour of Ambit Capital Private Limited states: “The owner (QLearn) had agreed to sell the shares of the Company (FIITJEE) to the beneficiary (Ambit Capital) pursuant to the Share Purchase Agreement.” The Declaration states that Ambit Capital had transferred an amount of Rs 36 crore to QLearn as consideration for the purchase of shares of FIITJEE from Qlearn.”
Qinvest, according to its website, is “Qatar’s leading financial services firm and, with operations across the Middle East and Europe, is one of the most prominent Islamic financial institutions in the region.” Qinvest LLC Board members include Jassim Bin Hamad Bin Jassim Jabor Al-Thani of the Qatar royal family. Since it holds 26 per cent stake in Ambit Group, Directors of Ambit Holdings include Tamim Hamad A. Aziz Al-Kawari, CEO of Qinvest LLC, and Bernard Barbour, Managing Director of Qinvest LLC.
Licensed by the Qatar Financial Centre Authority in April 2007, Qinvest is authorised by the Qatar Financial Centre Regulatory Authority. Its shareholders include Qatar Islamic Bank and other institutional investors, as well as high-net-worth individuals. The firm has authorised capital of USD 1 billion and paid-up capital of USD 750 million.
The Ambit Group has at least nine companies under different names — all company names start with Ambit, and have the same Mumbai address.
Appleby records show that Sumeet Singh of Shardulchand Mangaldas sent an email to Malcolm Moller of Appleby on August 4, 2015 for legal advice: “Our client is currently proposing to undertake a transaction which inter alia requires analysis of certain issues under Mauritius law documents and Mauritius law. “ FIITJEE was founded in 1992 by Dinesh Kumar Goel to train students for competitive entrance examinations for engineering institutions, especially Indian Institutes of Technology (IITs). Currently, the company has over 50 centres in India, and abroad, mainly in Bahrain and Qatar.
QInvest did not respond to requests from The Indian Express for comment.
Response from a spokesperson for Ambit Capital:
Ambit Group’s investment in FIITJEE was made in April 2014 for an amount of Rs. 36 crore. This was duly reported in tax returns and publicly disclosed in the audited balance sheet. The said transaction was made through an authorized dealer, in strict compliance with FEMA and RBI guidelines. The said transaction is not a related party transaction, as defined in Indian accounting standards.
Response from a spokesperson for FIITJEE:
You are hereby requested to expressly disclose your authority for executing any such enquiry/ investigation. Any attempt to have fishing enquiry and getting the vital information in highly deprecated. As per the understanding of the company, the system is in place and system is sufficiently empowered and competent to check and ensure the compliance as per law. It is brought to your notice that the company has taken a serious note of your e-mail as the same amounts to violation of privacy. It is to inform you that all the information which are required to be in public domain are already disclosed to the competent authorities/ authorities concerned.
G
GMR Group
Bought plane, sold it in two weeks at loss
For, within a fortnight, GADL sold this plane to a US-based aircraft sales and acquisition company Avpro Inc. for $23 million — thereby incurring loss of $4.5 million in its books.
Appleby documents show that even as GMR group incurred a loss of .5 million, its transactions were structured in a manner that they escaped the VAT.
Appleby records investigated by The Indian Express show that GMR Airport Developers Limited (GADL) International, a GMR Group group company registered in the Isle of Man, purchased a Falcon 2000 aircraft on December 9, 2013 — a 10-seater passenger plane — from France’s Dassault for $27.5 million setting off a series of curious transactions.
For, within a fortnight, GADL sold this plane to a US-based aircraft sales and acquisition company Avpro Inc. for $23 million — thereby incurring loss of $4.5 million in its books. Records show that 10 months after it purchased the Falcon aircraft, Avpro put it up for sale at $26.5 million or around $3.5 million above the price at which the US company purchased it from GADL International.
Appleby documents show that even as GMR group incurred a loss of $4.5 million, its transactions were structured in a manner that they escaped the VAT (Value Added Tax) payment obligation on the aircraft purchase and sale deal.
Documents available with Appleby show that GADL purchased the plane with money coming from “an Indian company connected to” GADL. This is corroborated by the GMR group, which, in a response to queries sent by The Indian Express, admitted that “temporary assistance was given by another GMR group company and the dues were settled immediately on sale of aircraft by GADL International”.
Since the transaction involving GADL, registered in Isle of Man, and Dassault (in France), was an “intra-community” supply by virtue of both the destinations being in EU, it traveled free within the EU without payment of any VAT.
Appleby records reveal that GADL did show a VAT charge of 20 per cent under the the EU’s VAT regime but was able to recover it, leading to no actual VAT payment to tax authorities. “The VAT charge and recovery are effectively contra entries on the same VAT return and no actual VAT is paid to any tax authority — provided that the purchaser (GADL) goes onto make taxable supplies with the asset purchased,” said the advice from an Isle of Man tax advisory hired by GADL, ICM Tax Consultants. This advisory is part of Appleby records.
That’s why within a fortnight of the purchase from Dassault, when GADL sold the aircraft to US based Avpro Inc., no VAT was paid because the sale took place “outside the scope of EU VAT”.
The tax consultants working on the scheme argued that “the sale of the aircraft in the US would be a supply that would allow GADL to be considered to be ‘in business’ and would therefore allow for the input VAT recovery on the initial acquisition of the Aircraft as purchased from Dassault”.
In Sep 2014, the Falcon 2000 was publicly put up for sale by Avpro priced below market at $26.5 mn.
GMR’S RESPONSE:
In the changed business scenario in India and overseas, the group decided to rationalise its fleet and hence negotiated with Dassault to shift to smaller aircraft Falcon 2000 at a price of USD 27.5 Million. However, the business prospects of chartering were not conducive for profitable deployment of new aircraft in India and hence finally the group took a call to cancel this booking.
“Dassault has not agreed for any amicable solution and hence it was decided to explore opportunities to sell the aircraft after taking delivery…the group has no option but to take delivery and sell in the market in Dec 2013 to avoid forfeiture of $11 mn of advance paid to Dassault. As flying the aircraft into India, getting it registered and then selling would have been a cost option in terms of time and costs, we explored ways to sell overseas without bringing this aircraft into India. In line with this plan, aircraft was purchased by overseas company and sold to buyer soon after taking delivery. Thus we could reduce the loss to only $4.5 mn instead of forfeiture of $11 mn.
Asked how Avpro could put it up for sale at a higher price, the spokesman said: “We cannot comment on the activities of Avpro as we do not have any business dealings with them other than sale of this aircraft…The sale by Avpro was almost 10 months after their purchase from us and in the international market saddled with huge inventory of aircraft up for sale because of stagnant market, some variations in prices are possible over a period of time.”
“The losses incurred by the group on account of sale of aircraft was disclosed in respective company and incorporated in the consolidated accounts of the listed entity. There was no requirement for separate reporting in any Indian company as the loss is incurred in the overseas entity. Finally we wish to inform you that all the above transactions were fully reflected in our books of accounts and annual reports which were filed with the respective regulatory authorities like ROC, RBI, GoI etc. in India and other respective places in the globe.”
Dassault did not response to queries sent by The Indian Express. (Full response indianexpress.com)
28 offshore firms set up to drive expansion
Looking to repay loans taken by GMR Holdings (Malta), the group instructed Appleby officials to change the nature of funds while transferring it from one group entity to another.
Appleby documents reveal that GMR Group also executed or sought execution of transactions from the Bermuda law firm that would allegedly help it avoid tax.
AS PART of its global business expansion plans in infrastructure and energy, the GMR group created a web of companies that involved setting up at least 28 entities across 10 jurisdictions, including Mauritius, the Isle of Man, Spain, Singapore and Malta. These entities were then structured as step-down subsidiaries of GMR Holdings Private Ltd (India).
Appleby documents reveal that GMR Group also executed or sought execution of transactions from the Bermuda law firm that would allegedly help it avoid tax; convert inter-company loans across jurisdictions into compulsory convertible debentures avoid transfer pricing issues; and, in several instances, change the nature of funds (debt to equity and vice-versa) when they were transferred from a subsidiary in one jurisdiction to another.
In 2008, GMR Infrastructure (Malta) Ltd — a subsidiary of GMR Holdings Pvt Ltd (India) — acquired 50 per cent stake in Intergen, a US-based power company through a series of entities and step-down subsidiaries in Mauritius, Cyprus, the Isle of Man, Malta and the Netherlands. The acquisition was routed through GMR Holding (Malta), which took a loan of $837 million of which $637 million was refinanced from Axis Bank Singapore.
However, when the GMR Group decided to prepay a loan of $100 million to Axis Bank in April 2010, it made direct payment to the bank’s Singapore branch from GMR Mauritius, a subsidiary of GMR Holdings India.
The documents include an instruction from a GMR group official to Appleby for passing dummy accounting entries into four companies across three jurisdictions.
“This prepayment has to be done by April 6, 2010. Considering the number of working days available from now (March 29, 2010) to April 6, it may not be practical to route the US$100mn from Mauritius to Cyprus to Isle of Man to Malta. Hence, we are proposing to make this payment directly from GMR Mauritius to Axis Bank Singapore. However, the entries would be passed in the books of Accounts of Cyprus and Isle of Man companies as though the funds are received from respective parent companies and for Malta this transaction has to be recorded as if the funds were received as CCDs from GMR Energy Global Limited GEGL and repayment of Short Term Loan was made. We would be transferring US$100MM from India to Mauritius by tomorrow. Once the payment is made I will send you the copy of the swift message from Mauritius and you can make appropriate entries in IOM books,” states the instruction contained in Appleby records.
This is one of several instances of innovative accounting and change in nature of funds done by the GMR group in the period between 2009 and 2012 where it was looking to expand its global operations through its presence in Isle of Man.
“GMR Group has a larger emphasis on the business plans for Isle of Companies and these companies would eventually become larger in size in holding investments and centralizing all our business development activities and fund raising initiatives for the group business outside India. Hence, I am of the opinion that the team would gear up to shoulder more responsibilities and be prepared to take up any business proposal with open mind,” a GMR Group official said in a letter to Appleby in January 2010.
Records show that the Group moved for alleged tax avoidance in other jurisdictions. GMR held 40 per cent stake in ISG International Airport Turkey through GMR Infrastructure Ltd India (35 per cent) and GMR Spain (5 per cent). Records show it decided to move the holding with the Spain entity to a company registered in Malta to benefit from a favourable tax treaty.
“The benefit of investing in ISG, Turkey through MALTA Company will be that Turkey and Malta have favorable tax treaty whereas there is no tax treaty between Isle of Man & Turkey. In case investment is direct from GAGL, Isle of Man to ISG Turkey and in future, if GAGL Isle of Man disposes of its stake in ISG, Turkey, there will be a tax implication in Turkey since there is no tax treaty between the two countries. In the absence of a tax treaty, the Turkish rules will apply,” a GMR official wrote to Appleby.
To achieve this, the Group decided to set up a company in Malta and identified an existing company i.e GMR International (Malta) Ltd, a 100 per cent subsidiary of GMR Infra Mauritius Ltd. The company was later named GMR Airports (Malta) Ltd.
In another instance, looking to repay loans taken by GMR Holdings (Malta), the group instructed Appleby officials to change the nature of funds while transferring it from one group entity to another.
In January 2011, a GMR official wrote to Appleby, stating that while GMR Infrastructure Global Ltd (GIGL, IOM) “will receive $6mn” from its immediate holding company GMR Infra (Cyprus), “the money needs to be treated as share application money and should be transferred to GHML as a contribution to CCD by GEGL which is a step down subsidiary of GIGL (IOM)”.
“These funds are required by Malta to service the interest on the loan taken,” said the GMR official.
Experts say financing the operations with debt often results in meaningful reduction of the overall tax rate applicable to the operation. Also, in many jurisdictions, repayment of invested capital (in the form of debt principal) and interest payments is free of withholding tax if the investment qualifies as a debt instrument.
In another instance, GMR Infra SOCIEDAD (GMR Spain) granted an inter company loan to GMR Energy Global Limited, Isle of Man (GEGL), but the money was utilised by GEGL (IoM) among other purposes, for its investment in GMR Malta. While the outstanding inter-company debt was approximately
EUR 27 million and the loan carried an interest rate of Euribor (Euro Interbank Offered Rate, a daily reference rate, published by the European Money Markets Institute).
On this transaction, records show, a GMR official told an Appleby official that GEGL was not in a position to service the interest / repay the loan. The GMR official stated: “Such an outstanding amount along with the fact that the interest rate charged is low will, in the long run, create transfer pricing issues in Spain. Accordingly we are contemplating a restructuring exercise to convert the outstanding loan into CCDs, which will be converted to equity in due course.”
RESPONSE FROM GMR GROUP:
At the outset, we would like to emphasize that GMR group conducts its business in conformity with legislative requirements with transparency to achieve best possible returns to the investors. The entire overseas set-up was done keeping in view various investments in infrastructure projects in overseas the group was planning to undertake, considering the optimum ways to meet the financing needs and to meet the local regulatory requirements. Due care is taken to ensure the resultant investments are well in line with permissible regulations both domestically and in overseas.
GMR Group is\was having business entities in various jurisdictions like Turkey, Singapore, Indonesia, Nepal, Philippines, etc. The business of infrastructure where separate business entities need to be set up for each project/activity on account of concession agreements, multiple partners necessarily need large number of companies. The entity in Mauritius is the first level subsidiary through which all overseas investments are done by listed entity. In view of specific needs to cater to the investment in Intergen BV, we had to set up Isle of Man and Malta entities which are in the process of closure post Intergen divestment. Currently, we do not have any entity in Spain. The Singapore entity is involved in the construction of airport terminal along with our partner in Philippines. All these entities are set up in line with extant regulations governing investments, tax treaties, and full disclosures are made to respective authorities on the activities of these entities regularly.
The investment in Intergen NV was made through an entity in Malta as Intergen is set up as a company in that jurisdiction and because of the Netherlands preference for investments from Europe over other countries, we had to necessarily do the investment in that way. The investment was done through step-down subsidiaries taking into account our existing overseas subsidiary at Mauritius through which we have to make all overseas investments as per RBI regulations, the existing tax treaty agreements between Mauritius and ultimate country of investment, ie., Netherlands and the future plans of listing of this entity in overseas exchanges for which Isle of Man was preferred in between.
As you may be aware, Intergen NV is a well-diversified utility company registered in Netherlands having generation facilities in Netherlands, UK, Mexico, Philippines, Australia totaling 8,000 MW with another 4,600MW in development. We acquired 50% stake in this company and other shareholder was Ontario Teachers Pension Plan Board. As mentioned, the entire investment was made in line with the above structure.
As regards payment to Axis Bank, the same was done by GMR entity in Mauritius directly as the entity in Mauritius was the ultimate overseas holding company in charge of the investment and considering the need to close the loan on due date to facilitate completion of investment transaction. There is nothing unusual in the transaction and such direct remittances do happen many a time to save on the time and costs involved. As long as all the entities involved accept the completion of transactions, there is no irregularity or violation of any law. The direct payment was resorted to as the loan to Axis Bank was to be paid on 6th April, 2010 as per notice already served and sending the funds through all the companies involved would have delayed the remittance as each transfer would have taken one business working day considering USD remittance and we would have missed the payment due date.
It is not correct to say GMR group has transferred ISG investment to a group company in Malta to evade taxes in foreign jurisdiction. The re-organisation of shareholding was done to rationalize the overseas chain of companies post our Intergen divestment. As we understand, Turkey and Malta do not enjoy a favourable tax treaty compared to Turkey and Spain and ultimately Malta Revenue Authorities have confirmed our tax status in year 2014.
There are occasions on which the nature of funds transferred from one entity to another entity is changed subsequent to transfer of funds. These were primarily cases of miscommunication or on account of changes proposed in the capital structure which are in line with local jurisdictional laws.
Restructuring of investments do happen because of change in business requirements like fresh investments, divestments which warrant reclassification of investments in subsidiaries. Also, we may have to reclassify investments based on local laws which need to be complied with like Income Tax and Corporate Laws governing debt and equity. The Group has followed all relevant laws and regulations in conducting its business including investments.
GMR Group is/was having operations in various countries and at times making investments from different companies in various jurisdictions becomes necessary considering the availability of funds at that particular point of time and time involved in transferring money from one country to another country. There is no complexity in these transactions and required documentation for each of these transactions was done before completion of remittances. It is common for directors in charge of individual companies to raise certain questions before taking up a transaction and sufficient support is always provided for. In view of investments in different jurisdictions and different partners, we need to necessarily maintain different holding companies to facilitate encumbrances by various financing banks and at times the jurisdiction of holding company do depend on banks’ compliance requirements also.
Anil Gupta, Vinod Poddar, Laxmi Cement Udyog
Records show that Appleby’s compliance team and the Royal Bank of Scotland (RBS), which agreed in principle to open an account for Plutus International, sought details on the sourcing of wealth to be channelled through the proposed BVI and IOM companies.
Two Indian business families approached offshore legal firm Appleby through a UK-based intermediary to set up a company in the Isle of Man to acquire the shares of a Nepal company and finance its cement manufacturing plant via the offshore route. But they failed to meet ‘due diligence’ requirements, and Appleby eventually terminated the engagement.
In October 2012, Bristol-based law firm TLT Solicitors sought Appleby’s services in setting up a holding company in offshore financial centre Isle of Mann for its client, Laxmi Cement Udyog Pvt Ltd (LCUPL), a company that was incorporated in Nepal in 2009 and owned land and limestone mines, for a proposed cement plant.
Appleby was also told to open a bank account for the proposed company in Isle of Man, which would receive a $8-million loan from a yet-to-be-formed company in British Virgin Islands and finance the cement plant in Nepal through “on-lending”.
Appleby records show Anil Gupta was to be the 70 per cent stakeholder in the proposed company in the Isle of Man while the remaining 30 per cent would be with Vinod Poddar. Anil Gupta is the owner of agrochemical major Ambey Group. Vinod Poddar inherited Govind Rubber Ltd after ownership of the family-owned Siyaram Group was restructured.
Anil Gupta’s son Archit Gupta was to be the sole Indian director and Appleby was asked to provide two local directors for the proposed company to be regarded as a tax resident of Isle of Man. Appleby applied for incorporating ‘Plutus International Limited’ and named the two director companies, Pokhara Controllers Ltd and Kathmandu Managers Ltd.
However, records show that in early reviews Appleby’s compliance department flagged several issues, including ownership of the Nepal company.
Vaibhav Gupta — records show he introduced himself as a member of Anil Gupta’s family — informed Appleby that the shares of LCUPL were allocated “in favour of Nepalese people” because a Nepal company required at least 20 per cent local shareholding to be financed by a Nepal bank.
“Once the IOM company is incorporated, this company would engage into a share purchase agreement with our people back in Nepal in order to make LCUPL a fully owned subsidiary of the IOM company,” Vaibhav Gupta said, adding that the clients had general power of attorney from the Nepal shareholders.
On the rationale for setting up an offshore holding company, Vaibhav Gupta said there was no income and withholding tax at the IOM level. “However, there is a withholding tax of 15% at the Nepal level which we need to pay as dead loss on remitting the interest and principal payment to the IOM company in respect of the debenture issued by LCUPL to IOM company. We are only concerned about the tax implications at the IOM level as the rest would be taken care by our Indian and UK solicitors,” he wrote.
Records show that Appleby’s compliance team and the Royal Bank of Scotland (RBS), which agreed in principle to open an account for Plutus International, sought details on the sourcing of wealth to be channelled through the proposed BVI and IOM companies.
Vaibhav Gupta said the investor was “company/group managing HNI (high net worth individual) money” and the loan would be preconditioned on receipt of a proper Source of Funds document from the investor’s bank. He said the clients were unable to provide any document before incorporation of the Isle of Man company since the loan agreement would be “between the Investor’s BVI SPV (special purpose vehicle) and our IOM company specifically incorporated to execute the loan arrangement and act as the holding company for our Nepalese Company.”
But Appleby and RBS were not convinced. Among Appleby’s concerns were:
“We will also need to consider the regulatory issues around the on-lending.”
“We will need full info on the individual(s) behind the funding corporate
– interesting that this has yet to be incorporated.”
“There are obvious jurisdictional issues in respect of the underlying Nepal entity. In addition the location of the Shareholders is High Risk and we will require details of their source of funds/wealth.”
“Seems that lime mining/concrete making in a country like Nepal might include all sorts of bribery issues.”
The RBS was more worried about the Indian clients and their funding. “Nepal is not an issue. The gentlemen, being Indian, will ensure that the entity is considered high risk. You would need to evidence an understanding of the SOF (source of fund) within the bank account application form,” RBS told Appleby.
As Appleby waited for details from the client, a ‘world check’ threw up a few ‘negative hits’ that could not be ruled out “as they didn’t include DoB”. This prompted a note from a staff: “What would you suggest I do on these? Can’t really go out and ask are you this guy because we know what the answer will be ‘No’. Then what do we do?”
The solution offered was to check the clients’ passports for middle names. But no middle names were included.
After three months, in February 2013, Appleby decided to close and archive the case for six years, serve a disengagement notice, keeping in record that the relationship did not proceed due to “non-provision of CDD” (customer due diligence).
“We are writing to you after noting that as it has been some time since we last corresponded. It would appear from our records that the information and documentation requested was not forthcoming and as such we never performed any of the agreed services. We therefore consider our Letter of Engagement… terminated,” Appleby wrote to Vaibhav Gupta and Vinod Poddar on February 27, 2013.
However, a month later, Gupta and Poddar were back as Appleby clients. On March 27, 2013, Appleby (Seychelles) wrote to Appleby (Isle of Man) “regarding hits obtained in our conflict check” among existing clients. It was advised that “the instruction was allowed to lapse” because “the client was unable to provide documentation and information to satisfy our due diligence requirements”.
Appleby (Seychelles) recorded: “Preparing legal opinion on Ananta International Limited in relation to entry into facility agreement with Virgin Infraa Investments Inc.” Few details are provided on this in available Appleby records but it drafted share-pledge documents and provided legal opinion to Gupta and Poddar in May 2013.
RESPONSE
Anil Gupta and Vinod Poddar did not respond to multiple emails and phone calls from The Indian Express seeking comment. Responding to an emailed questionnaire from The Indian Express, Archit Gupta wrote that he would “provide all information”. In a subsequent email, he wrote that he was “not in town” and would “revert by next to next week”.
Shailesh Haribhakti
Mumbai
Overseas jurisdiction
Malta
Shailesh Haribhakti is a chartered accountant and the chairman of D H Consultants Pvt Ltd. According to the website of D H Consultants, Haribhakti, as the managing partner of Haribhakti & Co, is involved in Auditing, Risk Advisory Services and Tax Services. He also serves on the board of over 10 Indian companies, and chairs 10 audit committees.
According to registry data, he is one of the 36 shareholders of Astonfield Renewable Resources Ltd, having 150 ordinary shares.
RESPONSE: Haribhakti said, “I have not registered any entity in Malta and have never been to Malta… On being appointed an Advisor on a solar power initiative in India, I was allotted a very small number of shares in the holding company in Malta… I have resigned from the advisory role. Since then there has been no contact with the Indian entity as well. Of course the insignificant sum paid was from my tax paid resources, remitted through an authorised dealer. This was well below the RBI threshold for annual spend.”
Havells’ offshore firms
In 2007, Havells India registered a firm in Isle of Man which became key investment vehicle
ELECTRICAL APPLIANCES company Havells India floated over 50 subsidiaries beginning February 2000, most of them in tax havens, to acquire a global footprint through acquisitions and tie-ups, Appleby records show. Havells India is promoted by Qimat Rai Gupta (photo) and his family, which purchased the Havells brand in 1971. The brand was named after its first owner Haveli Ram Gupta.
In the 10 years leading up to 2015-16, revenues of Havells India Ltd (HIL) grew almost eight times from Rs 1,681 crore in 2006-07 to Rs 7,714 crore. On February 9, 2007, HIL set up an entity in Isle of Man called Havell’s Holdings Ltd — an investment firm that served as its vehicle for its overseas expansion. Havells India funded Havell’s Holdings which, in turn, invested EUR 141.25 million in Havells Malta that facilitated its global spread — 52 subsidiaries across Europe, Latin America and Asia.
Havell’s Holdings, whose share capital is GBP 116.95 million, is fully owned by Havells India Ltd. The Indian company’s board has, in the past, had high-profile retired bureaucrats including Adarsh Kishore, former finance secretary, and S K Tuteja, former MSME secretary.
Havells India is listed in India, with the public holding 37.44 per cent shares and the promoters retaining the balance 62.56 per cent shares. The promoters comprise three groups: QRG Enterprises Ltd (30.4 per cent); Ajanta Mercantile Ltd (11.01 per cent) and the Gupta Family (21.15 per cent). QRG stands for Qimat Rai Gupta, the group’s patriarch.
The subsidiaries also borrowed individually from international and Indian financial institutions. For instance, Havell’s Holdings Ltd had a facility agreement of EUR 40 million from DBS Bank, New Delhi. Havells Netherlands Holdings, a subsidiary of Havells Malta Ltd, borrowed EUR 12 million as per a facility agreement dated March 14, 2013 from Standard Chartered. Havells Sylvania Europe Ltd too borrowed Eur 77.5 million from ICICI Bank, Standard Chartered, Frankfurt Branch and HSBC Bank plc as per a facility agreement of May 24, 2012.
Havells acquired SLI Sylvania’s lighting business in 2007 for $300 million using debt and internal accruals but in December 2015 sold 80 per cent of its Malta subsidiary, which was the holding company for all overseas operations, to Inesa UK Ltd, a firm owned by Chinese company Shanghai Feilo Acoustics Co Ltd for EUR 138.4 million.
Four indirect subsidiaries were not to be involved in the sale consideration. These were: Thai Lighting Asset Company Ltd (and its subsidiary Havells Sylvania Thailand Ltd), Havells Sylvania Brazil Illuminacao Ltda, Havells USA Inc and Havells Sylvania Illuminacion Chile Ltda.
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Response from Havells India:
Havells India Limited acquired the global Lighting business of Sylvania which was present across Europe, Latin America and Asia in April 2007. The investment was committed with a view of business expansion with global presence. To facilitate such acquisition and its financing, we established the Holding companies as is the norm for such overseas ventures. The 50-odd subsidiaries were already part of the Sylvania Holding structure due to business presence in 40-odd countries and thus part of the acquisition. The key purpose for establishing Havells Holdings limited was financing and holding of Sylvania assets. The holding structure of Sylvania was duly filed with the Reserve Bank of India as per extant regulations.
The tax has been duly paid in the respective jurisdiction as may be applicable. The business of Sylvania, its performance over the period is all in public domain. The business was successfully managed for over 7 years but because of the disruption in the lighting industry with the invasion of LED and the low growth phase across Europe and Latam (Latin America), it was decided to release the resources and management bandwidth from such geographies and focus on domestic market. The stake sale in Havells Malta to INESA was to facilitate the smooth transfer of the Sylvania entities to the purchaser. The entire transaction at Havells Sylvania is to facilitate bonafide business transactions in accordance with local regulations and practices.
Hinduja Group: took trust route to waive debt
In the case of Hinduja Group, Appleby worked during 2014-15 to replace Jersey-based Rozel Trustees (Channel Islands) Limited and Novatrust Ltd as the trustee for The Acorn Trust.
The Hinduja Group, with revenues of over $25 billion and employing 100,000-plus people, effectively utilised a “trust” structure and its opaqueness to waive over $78 million in debt to a group holding company despite the trustees pointing out that the act would benefit the Hinduja family members, Appleby records show.
Initially hesitant to sign off on the holding company’s accounts, the trustees, eventually, agreed after extracting an indemnity bond from Prakash Hinduja protecting them from any future damages. Legal advice stating that the waiver of the debt would not be construed as an aggressive tax-avoidance scheme was also furnished to the trustees.
Records show that documentation of the loan was created between June 30, 2007 and December 3, 2007. Appleby had pointed out, records investigated by The Indian Express show, that once the loan was waived by the Hinduja family trust called The Acorn Trust, the holding company, headquartered in Luxembourg, AMAS Holding SPF, would recognise the profit in its financial statements.
This profit would be available to be distributed to the shareholders. AMAS Holding’s entire shareholding is with The Acorn Trust whose beneficiaries are the Hinduja family.
In the case of Hinduja Group, Appleby worked during 2014-15 to replace Jersey-based Rozel Trustees (Channel Islands) Limited and Novatrust Ltd as the trustee for The Acorn Trust. This information came to light because the takeover got delayed and “frustrating” for the Hinduja Group, with existing trustees creating a demand for an indemnity for the loan waiver. In email exchanges, both the Hinduja Group and Appleby guess this might have been the case as they to expedite the process.
On May 12, 2015, Appleby facilitated setting up of another trust, The Pine Trust, for the Hinduja family. The beneficiaries of the trust are Ajay P Hinduja, Kamal P Hinduja, Sareeta S Hinduja, Sadhna Gopichand Hinduja, Sanjay Gopichand Hinduja, Dheeraj Gopichand Hinduja, Vinoo Srichand Hinduja and Shanu Hinduja. The protector for this trust is also Protectus Anstalt, the same as that for The Acorn Trust.
In its internal file notings, Appleby said: “Hinduja brothers remain some of the most powerful people in the world linked with US Presidents and numerous US politicians — hence linking PK as a PEP,” it said. According to a statement from the office of P P Hinduja, Chairman, Hinduja Group of Companies (Europe), received today: “The Hinduja Family, descendant of late P D Hinduja, comprises mostly of members who are overseas citizens of Indian origin for almost 100 years. They have global investments in multiple jurisdictions. They are fully compliant with the laws and regulations in each geography where they operate.”
Information collated from various exchange of mails and records show that The Acorn Trust, set up on June 14, 1990, sits at the top of the Hinduja Group’s structure. It came formally under the Appleby fold in January 2015 (there is a letter of engagement dated January 22, 2015 to the trustees of the Acorn Trust spelling out the basis to provide services). Its settlor is Prakash Parmanand Hinduja, the third of the four Hinduja brothers. Its beneficiaries are relatives of the four brothers – Srichand, Gopichand, Prakash and Ashok.
A Liechtenstein foundation, Protectus Anstalt, is the Protector of the Trust. The Trustees are Rozel Trustees (Channel Islands) Limited. The Trust’s only unlisted investment is in AMAS Holding SPF, which is fully subscribed to by the trust. The Acorn Trust holds 10,000 shares of CHF 400 each, amounting to $346,330 at cost. It has $124.41 million in the capital account, also termed as ‘Beneficiaries Funds’.
Records show that Prakash Hinduja, born in Mumbai, is a Swiss national, but a Monaco tax resident. Srichand and Gopichand are UK citizens, and Ashok is an Indian citizen. There is huge to-and-fro within the Appleby compliance team about the status of the Hinduja brothers, but eventually, they settle to term the whole family as PEPs (Politically Exposed Persons). Records show the holding structure of the group’s flagship in India — Ashok Leyland Ltd, the country’s second largest commercial vehicle manufacturer after Tata Motors. It also has other interests in sectors such as oil, power, banking and finance, etc.
The umbrella investment company for all its Indian ventures is also AMAS Holding SPF. SPF essentially is in the nature of a Private Asset Management Company. SPFs can hold financial investments – shares, bonds and derivative instruments. They cannot take part in commercial transactions.
SPFs obviously have huge tax advantages. They do not pay corporation tax, municipal tax or wealth tax. Further, they do not have to pay capital gains tax or withholding tax on interest payments.
There is no clear picture about the value of the entire investments or holdings of AMAS Holding SPF. AMAS Holding SPF holds 100 per cent of Machen Development Corporation, a Panamanian entity, which in turn holds 100 per cent of N.N.Investments B.V., a Netherlands company.
Both these companies, too, are holding/ investment companies, with no other commercial activity. The shareholding of Machen Development Corporation is 100 shares which were transferred to AMAS Holding SPF of Luxembourg on April 22, 2014. MDC initially had ‘Bearer’ shares allotted on March 3, 1986.
The second mega layer in the The Acorn Trust super-structure is Gulf Oil International Ltd (GOIL), another holding company in Cayman Islands. The shareholding in GOIL is split between AMAS Holding SPF (56.4%) and N.N.Investments (43.6%). All the Gulf Oil brand companies across the world including India, UK, Middle East — except the US, where the Hindujas sold Gulf Oil to Chevron a while ago – seem to be under this Cayman Islands company.
Hindustan Times Group/ Go4i.com
Paradise Papers: The annual report of Hindustan Times Limited for 2003-04 lists Go4i.com (Bermuda) as a subsidiary and shows that the company did not have any shareholding in the Bermuda-based entity.
The Hindustan Times Group owned by the Bhartias set up a company in Bermuda, Go4i.com (Bermuda) Ltd, through HTBC Ltd, which is one of the three shareholders of the offshore entity, Appleby records show. The other two shareholders of Go4i.com (Bermuda) Ltd are Swaminn Investments, registered in Cayman Islands, and Indocean Internet Holding (Bermuda) Ltd, the records show.
HTBC Ltd has its registered office in Mumbai and is owned by HT Interactive Media Properties, which has its registered office at Hindustan Times House, Kasturba Gandhi Marg, New Delhi.
The annual report of Hindustan Times Limited for 2003-04 lists Go4i.com (Bermuda) as a subsidiary and shows that the company did not have any shareholding in the Bermuda-based entity.
Registrar of Companies (RoC) documents between 2004 and 2016 make no mention of the Bermuda entity — there is no further update in subsequent years on the status and business of the offshore company.
Appleby documents show that Shobhana Bhartia, chairperson of the Hindustan Times Group, and her son Priyavrat Bhartia are directors of the Bermuda entity and also of HTBC Ltd.
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The other officials at Go4i.com (Bermuda) Ltd include Manisha Gupta, Piyush Gupta, Anil Ahuja, Rajan Kohli, Hiren Patel and Ravi Seth among others.
Piyush Gupta and Anil Ahuja were also directors in Go4i.com (India); Rajan Kohli was executive president, Hindustan Times Ltd in 2003-04; Ravi Seth was director (finance) of Hindustan Times Ltd in 2003-04.
The directors of Go4i.com (India) include Virendra Kumar Charoria who is also a whole time director of The Hindustan Times Ltd along with Shobhana Bhartia, Priyavrat Bhartia and Shamit Bhartia.
The Hindustan Times Ltd is the holding company of HT Media Ltd (listed entity in India) and holds 69.5 per cent stake in the listed entity. Its annual report shows that in the financial year ended October 31, 2003, Go4i.com (Bermuda) registered a loss of USD 701,634 (Rs 3.15 crore), and of USD 861,265 (Rs 4.1 crore) in the previous year. However, there are no details of the business and the revenue of the company over the two-year period.
Into the business of providing content, including wireless access protocol technology, RoC documents accessed on Go4i.com (India) show it is a subsidiary of Go4i.com (Mauritius) Ltd. Go4i.com (India) Ltd got registered in March 2000, with majority shares ( 99.92%) owned by Go4i.com (Mauritius) Ltd as of March 31, 2016, RoC records show.
RESPONSE FROM Shobhana Bhartia’s office:
Go4i.com (Bermuda) was formed after taking all requisite approvals as a JV between Swaminn, Indocean Internet Holdings (co-Investors) and HTBC Ltd (a 100% step down subsidiary of The Hindustan Times Limited) to undertake internet and other allied business. The business was subsequently wound up in 2004 after taking all necessary approvals.
Jindal Stainless/ Jargo and Vavasa Investments
Request for nominee directors was in relation to a loan of $35 million provided by Credit Suisse AG Singapore to the two offshore companies
WHEN GLOBAL law firm Linklaters Singapore Pte approached Appleby in 2013 to appoint two nominee directors on two Mauritius-based companies of Jindal Stainless Group — Jargo Investments and Vavasa Investments — the offshore service provider decided against going ahead with the appointments.
Reason: the compliance manager of Appleby raised a red flag that since the beneficial owner (Abhyuday Jindal) was of Indian nationality and investments were being made in India, there is the risk of ‘round tripping’.
“We need to be careful on any potential round tripping issue (it appears that the beneficial owner is from India and investments have been made in India), as such we might need to ensure that the company has the necessary approval from the revenue authorities in India,” the compliance manager wrote.
The proposed appointment request was in relation to a loan of $35 mn being provided by Credit Suisse AG Singapore to the two Jindal Group Companies.
Appleby documents show that it identified its employees Malcolm Moller and Gilbert Noel to serve on the board of two Mauritian companies — Jargo Investments Limited and Vavasa Investments Limited — for the term of the facility agreement that Credit Suisse AG Singapore was providing these two companies for four years.
The shareholding pattern of various Jindal Group companies filed with Bombay Stock Exchange show that in 2013, Jargo and Vavasa were part of the promoter group entities of JSPL, JSW Steel, Jindal Stainless Ltd and Jindal Saw Ltd, among others.
According to the Facility Agreement available, the two companies in Mauritius were acting as borrowers for Jindal Stainless Global Ltd, a company incorporated in Bahamas (Ultimate Beneficiary being Abhyuday Jindal, son of Ratan Jindal) and were borrowing $35 million from Credit Suisse AG Singapore Branch under the facility.
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The document states that the money was to be utilised towards refinancing of existing loans of “any member of the group”.
Natasha Hardowar-Bissessur, compliance manager at Appleby, further alerted about a WorldCheck finding on one of the investee companies in October 2012 and pointed out that a charge sheet was filed by the CBI for alleged involvement in an illegal mining scam.
World-Check is a tool used by banks and other entities to do a screening or due diligence on individuals and companies that they deal with as it lists out high risk individuals and companies.
While the four Jindal brothers — sons of O P Jindal — took over management responsibilities of different businesses after their father’s demise in a helicopter crash in 2005, they continued to have cross-holding in their brother’s company. It was only in 2015 that the four brothers — Prithviraj, Sajjan, Ratan and Naveen — initiated a plan to unwind the cross-holdings in their companies. The Jindal Stainless Group’s turnover for FY17 was Rs 16,500 crore.
Response from Jindal Stainless:
Jargo Investments and Vavasa Investments were part of the promoter group of Jindal Stainless Limited. However, they do not currently hold any shares of Jindal Stainless Limited and have not held shares of Jindal Stainless Limited since September 2014.
Based on enquiries made by us, Jargo Investments and Vavasa Investments did not raise funds for or on behalf of Jindal Stainless Limited and raised funds for their own purposes. There is therefore no question of round-tripping.
Jargo Investments and Vavasa Investments have always had directors on their board and have at all time complied with Mauritian law requirements. Appleby’s representatives were appointed to the board of Jargo Investments and Vavasa Investments from March 2013 to January 2017.
Jargo Investments and Vavasa Investments have made necessary disclosure in accordance with the applicable laws.
Jargo Investements and Vavasa Investments did not raise funds for on behalf of Jindal Stainless Limited and raised funds for their own purposes, which had nothing to do with Jindal Stainless Limited. Based on enquiries made by us, Jargo Investments and Vavasa Investments have not made any investments in India with the funds they have raised. Incidentally, Mr Abhyuday Jindal was a non- resident at the time Jargo Investments and Vavasa Investments raised funds.
Jindal’s $2-mn dues to Argentina firm
The arbitration was for payment due to Ultrapetrol for the work it did as a contractor engaged by JSPLM for its business in Bolivia.
In March 2015, Ultrapetrol SA, registered in Argentina, approached Appleby for advice on enforcing a London arbitral award against JSPLM Ltd.
APPLEBY DOCUMENTS show that Ultrapetrol SA, a service provider to Jindal Steel and Power Limited (JSPL) in Bolivia, obtained an arbitral award in London in 2015 against Jindal Steel and Power Ltd Mauritius (JSPLM), a 100 per cent subsidiary of JSPL, related to dues of approximately $2 million.
In March 2015, Ultrapetrol SA, registered in Argentina, approached Appleby for advice on enforcing a London arbitral award against JSPLM Ltd. Documents show the arbitration was for payment due to Ultrapetrol for the work it did as a contractor engaged by JSPLM for its business in Bolivia.
Ultrapetrol had asked Appleby on the avenues available to enforce of the arbitral award against the assets of Jindal outside Mauritius. It further asked for the procedures that needed to be followed for winding up of Jindal in the event the arbitral award remains unsatisfied.
Appleby suggested that since Mauritius is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), a ruling by a foreign tribunal against a local company may be recognised and enforced by the Supreme Court of Mauritius.
It further said that while the court may exercise its discretion to turn down the enforcement of an arbitral award at the request of the party against whom it is invoked. But, it pointed out, the UK is a party to the New York Convention and that an arbitral award obtained in London was capable of being recognised and enforced in courts there.
However, Appleby noted, the winding-up procedures of a Mauritian company were governed under the Insolvency Act 2009. Therefore, a liquidator appointed pursuant to the Act will not be able to take control of assets of Jindal outside the jurisdiction of Mauritius, Appleby said.
Later in 2015, a report by MinterEllison, a legal and consulting firm based in Australia, said that a Federal Court of Australia, where Jindal has business interests, has ordered that the foreign arbitral award against JSPLM be enforced and that “the non-appearance formed the basis for an order by default”.
RESPONSE
Jindal Steel and Power responds: The matter pertains to JSPL’s Bolivia project, where UltraPetrol SA was engaged as a contractor for regular course of operations. In 2012, the company had to withdraw from Bolivia project. All matters between subsidiaries of JSPL and UltraPetrol SA stand amicably resolved and settled.
Luv Kalra & Swapnil Chaturvedi
Lucknow
JAYDEEP CHAKRAVARTY
Overseas jurisdiction
Malta
Registry data show the three businessmen are listed together in two companies registered in Malta. While the name of one company is not listed, the other is called Articq Media Ltd. This entity was incorporated in 2013 as a limited liability company with a nominal share capital of EUR1,200. Jaydeep holds 150 shares; the other two Directors hold 225 shares each. The company filed returns up to December 2015. The division of shares is identical in the second company.
RoC data show Jaydeep runs Aneek Solutions Pvt Ltd in India. Luv Kalra and Swapnil Chaturvedi, who live in Lucknow, are Directors of Fivered Tech Pvt Ltd and Club Empire Tech Pvt Ltd, both registered in Kolkata. Club Empire Tech was incorporated in 2015, and Fivered Tech this year.
RESPONSE: Jaydeep Chakravarty said: “I incorporated the company around four year ago along with my two friends. My stakes in the company were only 25 per cent. The purpose of this company was to do business in the marketing sector in European countries. But this did not work, and since then I have not made any transaction.” Chakravarty said he did not take permission from the RBI, and has also not declared the company in his I-T returns.
Luv Kalra said, “Since no business has been done so far, I have not mentioned it in our income-tax returns. We have not taken authorisation from the RBI.”
Swapnil Chaturvedi said, “We have not done any business before incorporating these two firms.”
– For Indian Express, by MANISH SAHU, Lucknow and SHYAMLAL YADAV,
Javed Ali Khan/ Siam Capital and Investments
HIGHLIGHTS
Leaked documents, however, don't have any mention of Javed Ali Khan's remuneration of benefits during this tenure as shareholder-director of SIAM
Khan said his BVI offshore account had been opened on the instruction of the then owner of the money exchange
RAMPUR (UTTAR PRADESH): A 59-year-old NRI clerk working in a money exchange company in Dubai has a modest two-story house at a nondescript town in Rampur district of Uttar Pradesh, but "has made it" to the list of the 714 Indians mentioned in the Paradise Papers.
Javed Ali Khan, a resident of 42, Najju Khan Khair in Rampur, a constituency represented by Samajwadi Party leader Azam Khan, figures in the list at a time when business magnates, politicians and Bollywood celebrities are under the scanner for shareholding interests in foreign companies.
According to the list, Khan had become director and shareholder of a firm, Siam Capital and Investments Ltd, on November 10, 2003. The firm, which has its registered address at Portellius Trustnet Chambers, PO Box 3444, Road Town, Tortola British Virgin Islands (BVI), had investments from 18 companies, including Muchiri Catherine Nyambura and Zetland Corporate Services Ltd, based in the Caribbean Islands.
The leaked documents of the Paradise Papers, however, don't have any mention of Khan's remuneration of benefits during this tenure as shareholder-director of SIAM. Khan quit from Siam board on August 22, 2006.
Khan told TOI over phone from Dubai that his BVI offshore account had been opened on the instruction of the then owner of the money exchange."I have been working in a company, Wall Street Exchange, in Dubai as a clerk since 2000. In that year, the company was owned by a Mumbai-based businessman, Arif Patel. I had signed the papers to be part of the BVI firm on his instructions. I was told that Siam would give loans to our company. I never operated this account. I am a law-abiding citizen and will never conceal anything from the income tax department," Khan said. When asked whether he knew that he was being made director of Siam when at the signing the papers, Khan refused to comment on the query.
When TOI visited Khan's residence in Rampur, his mother, sister and nephew and cousins were at the house, and they said Khan had last visited them a month ago for a family wedding. "I don't own a property in India. I earn 6500 Dirham a month in Dubai," Khan said, adding that he had gone to the Gulf around 25 years ago.
Alpana Kumari, Anjna Kumari, Archna Kumari
Muzaffarpur, Patna
Offshore jurisdiction
Bermuda
The documents show Holtec International Ltd was incorporated in 2005 and moved for liquidation in 2007. As per the documents, the company is engaged principally in designing, manufacturing and construction of storage systems for spent nuclear fuel.
Three daughters — Alpana Kumari, Anjna Kumari and Archna Kumari — of retired Chief Engineer Mahendra Singh are said to be associated with the company. According to Mahendra Singh, who lives in Patna and spoke on behalf of his daughters, Archna’s husband is a “DIG outside Bihar”, and Alpana and Anjna are schoolteachers in Muzaffarpur. Archna is the chairperson of the Bihar-based DMC Trust, which works for the uplift of poor children. DMC Trust gets “occasional funding” from Holtec International Ltd, Mahendra Singh said. Alpana and Anjna are both members of DMC Trust. Mahendra Singh said Holtec does some work related to nuclear power and is still in existence, but he said his daughters had never visited Bermuda. He wondered how their names could figure in a list of people associated with the company.
RESPONSE: Mahendra Singh said neither he nor his daughters have anything to do with Holtec International Ltd. The company belongs to his nephew, he said. “My nephew K P Singh is a US citizen. He left India in 1968,” he said. Singh said he did not have the phone number or email address of his nephew, with whom he has not spoken for years.
On Archna mentioning her father’s address of Lohianagar, Kankerbagh, Patna, Singh said his daughters use his name only for the purposes of communication. On his daughters’ association with DMC Trust, Singh said: “Being associated with a trust has nothing to do with the company. None of my three daughters have worked for or were associated with Holtec.” Singh said he did not have Archna’s contact details.
— SANTOSH SINGH, Muzaffarpur, Patna
SNC-Lavalin (booked by CBI in 2008 Kerala case)
SNC-Lavalin is a Montreal-based engineering major, which was first implicated in a financial bribery case booked by the CBI in 2008 in which Kerala Chief Minister Pinarayi Vijayan had been named. Vijayan was cleared in August this year.
SNC-Lavalin is a Montreal-based engineering major, which was first implicated in a financial bribery case booked by the CBI in 2008 in which Kerala Chief Minister Pinarayi Vijayan had been named. (Source: WikiCommons)
A Canadian engineering and construction company, which has been the subject of corruption probes in India and abroad, used Appleby to register a new company and further its interests in bidding for projects of the National Highway Authority of India (NHAI), Appleby records show. SNC-Lavalin is a Montreal-based engineering major, which was first implicated in a financial bribery case booked by the CBI in 2008 in which Kerala Chief Minister Pinarayi Vijayan had been named. Vijayan was cleared in August this year.
The case related to SNC-Lavalin being contracted by the Kerala government for renovation and modernisation of hydro-electric power stations at allegedly exorbitant rates when Vijayan was the state’s Power Minister. The government also got funding from the company for a cancer hospital in North Kerala. In its chargesheet, the CBI estimated that alleged corruption had caused a loss of around Rs 370 crore to the exchequer.
This SNC-Lavalin case was back in the headlines when the CBI challenged the 2013 reprieve given by the Special CBI Court to Vijayan and six others. In August this year, the Kerala High Court validated the clean chit given to the Chief Minister with Harish Salve appearing for him. It is not yet known if the CBI will challenge the reprieve in the Supreme Court.
In 2015, the company was in fresh controversy over allegations of pay-offs to family members and officials who worked for Libyan leader Muammar Gaddafi. In 2015, Riadh Ben Aissa, a former executive of the company, revealed details of bribes and lavish gifts allegedly given to Gaddafi’s son, Saadi Gaddafi, and claimed that SNC-Lavalin’s top brass knew about these deals to win contracts in Lybia. In 2013, as many as 115 SNC-Lavalin companies were blacklisted by the World Bank for bidding for any of its global projects.
A March 2015 Appleby Compliance Risk Review Report notes that the World Bank’s action was a “conditional non-debarment” and that SNC-Lavalin Mauritius would be required to meet certain conditions to continue to be eligible to participate in Bank-financed activities.
Other actions against the company for a bridge contract in Bangladesh; investigations undertaken by the RCMP (Royal Canadian Mounted Police) and a debarment by the Asian Development Bank (ADB) are also listed. Interestingly, the 2015 Compliance Report notes how Appleby received letters from the NHAI (in April and May 2013) “requesting for clarifications on the Company’s claimed net worth” and asked if the company had responded to them.
Details have emerged from records that even as it became mired in these controversies, SNC-Lavalin remained focused on doing business in India and used Appleby to that effect.
In 2010, the SNC-Lavalin Group announced that it had taken a “significant stake” in Rayalseema Expressway Limited (REL), a consortium of companies to build and operate National Highway 18 for the NHAI connecting Cuddappah and Kurnool in Andhra Pradesh.
SNC-Lavalin registered a new company named SNC-Lavalin Mauritius Ltd with Appleby appointed as Company Secretary in 2008. The company, documents show, is stated to be jointly owned by SNC Lavalin SAS and SNC-Lavalin Europe SAS. A resolution passed by Directors of SNC-Lavalin Mauritius said that they wanted to bid for a project announced by the NHAI and had signed a Joint Bidding Agreement with Piramal Roads Infra Pvt Ltd (PRIL).
Details of the NHAI project are listed in the Resolution dated April 16, 2012 passed exclusively for the company to bid for an NHAI tender for four/six-laning of the Bhavnagar-Veraval Section of NH-8E in Gujarat. According to a 2014 Business Plan prepared by Appleby, the company picked up a 10% interest in Piramal Roads Infra Private Limited as well as a 36.9% interest in Rayalseema Expressway Private Limited.
Interestingly, according to latest NHAI records, while SNC-Lavalin is not one of the contracted firms for the Bhavnagar-Veraval section, it is listed as the contractor or consortium partner for several other highway construction projects. The NHAI’s May 2017 funding list shows SNC-Lavalin first was contracted in 2001 for constructing a 66-km stretch in Rajasthan between Bhilwara bypass and Chittorgarh.
The other projects listed for the company in partnership with other firms are: six-laning of the Gurgaon-Kotputli-Jaipur highway in 2009; four-laning of the New Mangalore Port in 2005 and a section of the Ghaziabad-Aligarh highway in 2011.
Despite detailed queries sent to SNC Lavalin’s media unit in the company’s prescribed forma a fortnight ago, no responses were received. No replies were also received to repeated reminders sent to the company by The Indian Express.
M
Vijay Mallya and Diageo's $1.5-billion debt waiver
Paradise Papers investigated by The Indian Express show that after he sold his United Spirits Limited India (USL) to the Diageo group in 2013, Diageo approached a London-based law firm Linklaters LLP to undertake a massive restructuring exercise to simplify the complex group structure created by Mallya.
WANTED IN India for debt default and alleged financial irregularities as detailed in the recent Serious Frauds Office report, Vijay Mallya may have some more explaining to do. Paradise Papers investigated by The Indian Express show that after he sold his United Spirits Limited India (USL) to the Diageo group in 2013, Diageo approached a London-based law firm Linklaters LLP to undertake a massive restructuring exercise to simplify the complex group structure created by Mallya.
One reason for the complexity of the holding structure, records show, appears to have been aimed at a single objective — allegedly diverting funds through USL Holdings Ltd (BVI), an entity in a tax haven (British Virgin Islands); and three subsidiaries in the UK. These were USL Holdings (UK) Ltd; United Spirits (UK) Ltd and United Spirits (Great Britain) Limited (UK).
Documents from Appleby, which worked with Linklaters on the restructuring, show that funds amounting to over $1.5 billion were funnelled, as debt, into these four subsidiaries over a period of seven years till 2014.
Two years after they took control of United Spirits, Diageo undertook a restructuring process to get rid of these three intermediate subsidiaries and so, effectively, ended up waiving the $1.5-billion debt owed by these subsidiary companies.
That’s not all. As part of the restructuring, records show, Diageo also absolved Watson Limited, an entity owned by Mallya in his personal capacity, of its dues to a USL group company to the tune of 4.4 million pounds (around $5.8 million) through an exercise called novation — substituting one party in a contract with another, or replacing one debt or obligation with another.
The $1.5-billion loan waiver and the novation seems to have resulted in Mallya taking away much more than the Rs 1,225 crore that Diageo reported to BSE – the amount actually works out to around Rs 10,000 crore going by Appleby documents.
While Diageo approached Linklaters LLP for the restructuring process, the law firm in turn approached Appleby and sought assistance in getting authorisations for the Mauritius-based Watson Ltd to complete the transaction.
Appleby documents confirm Diageo’s intent: “the purpose of the Reorganisation is to settle the inter-company loan balances.”
This is also corroborated by a stock exchange disclosure made by USL after the Diageo takeover. Diageo’s internal probe conclusively found that funds had been diverted between October 2010 and July 2014. “These improper transactions identified in the additional inquiry involved, in most cases, the diversion of funds to overseas and Indian entities that appear to be affiliated or associated with USL’s former non-executive chairman Vijay Mallya,” USL said in a stock exchange notice in July 2016.
While USL maintained that the company Board has directed the management to pursue recovery from the relevant companies and individuals and undertake any action including legal and regulatory as deemed necessary, the company ultimately seems to have waived the loan.
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When asked by The Indian Express on why it had waived the loan, a Diageo spokesperson said that as per March 31, 2015, it had granted interest-free loans in foreign currency amounting to Rs 4,941 crore and Rs 4793 crore in 2014 to USL Holdings Limited (BVI), a subsidiary, for acquisition of long term strategic investments.
The spokesperson added that a majority of this loan formed part of the company’s net investment in the subsidiaries. “As the borrowing entity had no operating income/cash flows to repay, the settlement of these loans was neither planned nor likely to occur,” she said.
“Accordingly the company has made adequate provisions and appropriate disclosures in its Annual Report for FY 2015-16 and FY 2016-17. The loans were given during the period of FY 2007-08 till FY 2014-15.”
Asked how much money was siphoned off by Mallya, the Diageo spokesperson said: “…Inquiry prima facie revealed instances of actual or potential fund diversions amounting to approximately Rs 913.5 crore as well as other potentially improper transactions involving USL and its Indian and overseas subsidiaries amounting to approximately Rs 311.8 crores that has been intimated to the Bombay Stock Exchange (on) July 09, 2016.”
On why the USL Group decided to “novate” payment obligation of Watson Ltd (GBP 4.4 million due to be paid to USL Holdings UK Ltd) even though Watson Ltd was not a USL Group company, Diageo cited a para from the 2016 Annual Report.
This talks of USL entering into a settlement agreement with Mallya pursuant to which he resigned from his position as a director and chairman of the Company and of the boards of its subsidiaries.
Pursuant to this settlement, USL undertook to Mallya that it shall not bring a civil claim for money, damages or specific performance against the counterparties in relation to matters arising out of the initial inquiry mentioned therein.
Dilip Mehta, Russell Mehta (Rosy Blue)
The principal figures from the family in Appleby records are Dilip Mehta and his nephew Russell Mehta, who are among the top brass of Rosy Blue, one of the world's leading diamond companies.
Records show that Rosy Blue took Appleby’s help to intercede in a bank fraud that targeted one of its offshore entities.
The Mehtas, the prominent Indian diamond business family, have figured on every black-money list obtained by the government or revealed by the ICIJ-The Indian Express investigation so far — Liechtenstein, British Virgin Islands, HSBC Geneva and Panama Papers. They show up in Appleby records as well.
The principal figures from the family in Appleby records are Dilip Mehta and his nephew Russell Mehta, who are among the top brass of Rosy Blue, one of the world’s leading diamond companies. Dilip Mehta, the youngest of three brothers, was chosen by his father Arun Mehta to launch the Antwerp unit of Rosy Blue and divides his time between Belgium and Dubai.
Records show that Rosy Blue took Appleby’s help to intercede in a bank fraud that targeted one of its offshore entities. They also show that Rosy Blue reached an out-of-court settlement in September 2010 that involved assurances of payment of up to $14 million.
The dispute involves Red Oak Operations Ltd, incorporated by Rosy Blue in the British Virgin Islands (BVI), and bank accounts opened by it in UBS Bank, Singapore — several court documents, financial records and settlements are part of Appleby records.
Court records show that in 2005, Red Oak opened a UBS account for dealing in foreign exchange trade. The allegation is that a senior UBS employee, identified in Appleby records as Kale Jagdish Purushottam, indulged in illegal transfers, causing losses to the account.
The final legal settlement states: “Jagdish has acknowledged that he had sometime between 2007 and 2009 carried out certain trades in respect of the account in breach of duty owed to the customer which had cause and/or contributed to the customer sustaining net losses in excess of $14,000,000.” It stated that the UBS official has to pay back $14,007,468.38 to the account in staggered payments between 2010-2011.
The records also include a second legal dispute between Jagdish Kale and Dilip Mehta, who is named as defendant along with Red Oak, with Barclays Bank listed as the claimant. In this case, according to an order of the of the Eastern Caribbean Supreme Court, Virgin Islands, Kale faced the allegation of forging some documents for bank transfers done in 2010.
Records show that Kale’s “contact person” from the family was Russell Mehta because “it was convenient for Mr Kale to visit/speak with Russell Mehta, whereas Dilip Mehta was based in Antwerp and Dubai”. The records include copies of remittances through Barclays Bank in the names of two other companies, Global Investments Overseas Ltd and Star Blue Investments International Ltd.
Earlier, several members of the Mehta family had figured on the Liechtenstein list, in which they were found to have made deposits in two trusts in the LGT Bank. Some members of the family also figured among the 612 Indians who had invested in the British Virgin Islands (BVI).
On the HSBC Geneva list, they were among 77 businessmen linked to the diamond industry — six members of the Rosy Blue clan collectively had deposits totalling $53.63 crore, for the year 2006-2007, with Dilip Mehta’s account showing a balance of $8,770,617.
In the Panama Papers — The Indian Express published a series of investigative reports in 2016 based on data of offshore entities set up by Panamanian law firm Mossack Fonseca for over 500 Indian nationals — 24 entities linked to Rosy Blue were registered in Seychelles, British Anguilla and Mauritius.
RESPONSE from DILIP MEHTA
I am not an Indian national and have been a non-resident since 45 years. Red Oak Operations Ltd is a non-Indian company. These are my private and personal matters.
I am not aware of what documents and information you are referring to and as such, cannot comment on their authenticity and reliability. The communications with Appleby are a subject matter of client-attorney privilege.
Appleby was retained by me and Red Oak Operations Ltd in relation to matters involving a loss arising to Red Oak from unauthorised trading by a banker on its bank account. The matters have since been settled amicably and are subject to a confidentiality and non-disclosure agreement.
Fahim Azir Maniar, Mumbai
Offshore jurisdiction
Malta
Aim Retail Holdings Limited was set up in Ireland in 2011 and operated as an “overseas company” (OC) through a branch in Malta. As per Maltese laws, all fiscal benefits granted to companies incorporated or resident in Malta are also extended to Maltese branches of foreign companies.
According to the Maltese registry, Fahim Azir Maniar, an Indian resident identified by his passport number and a central Mumbai address, was appointed director of Aim Retail Holdings Limited on October 23, 2013. According to registry data, Maniar also became the legal and judicial representative of the company.
Earlier, in January 2013, corporate service provider Exco had informed the Malta Financial Services Authority about withdrawal of services to Aim Retail Holding Ltd. In February 2013, Sam Anthony, an Indian passport holder living in Dublin, Ireland, was appointed director in the company.
RESPONSE: Over the phone, Fahim Maniar said he ran a balloon business, and had set up no offshore entity in Malta. Subsequently, Fahim Maniar’s younger brother, Naeem Maniar, a citizen of Ireland, established contact by email, and gave a detailed response to questions asked by The Indian Express. Naeem Maniar said he had moved to Ireland in 1984, when he was 15 years old.
“Fahim Maniar of Doodhwala Complex is my elder brother, and is one of the three Directors of my Malta registered entity (the other two Directors are both Maltese citizens, and residents of Malta),” Naeem Maniar said in his email.
“Fahim Maniar is on the board representing my interest, and has been a Director of my Malta entity since 2010…
“I can also confirm to you, I am the 100% beneficial owner of the Malta entity. Malta entity represents my business interest in Ireland, and is tax registered in Ireland and Malta with the respective authorities.
“I can also confirm to you, Malta entity, has no connections with India, has never carried on any trade in India, or with any Indian citizen or Indians national and as such has no requirement, legislative or otherwise to register its interest in India.”— RASHMI RAJPUT, Mumbai
Kalanithi Maran
In the share subscription agreement signed by the companies, as well as in the FIPB application, NDTV News Limited is listed as a shareholder/signatory.
On February 2, 2017, the Special CBI Court in New Delhi discharged all accused in the Aircel-Maxis case, stating that there was no documentary evidence to substantiate allegations and oral submissions. The 424-page order of judge O P Saini and hundreds of more pages of submissions, clarifications and internal company documents now form part of Appleby records since Astro, the Malaysian company implicated in the case, sought its legal advice during the six-year-long course of the case.
Dayanidhi Maran was Telecom Minister in the UPA government. The principal allegation of the CBI was that the $122 million that a subsidiary company of Astro paid for taking a 20% stake in a company of Dayanidhi’s brother, Kalanithi Maran, was quid pro quo for the purchase of stake by another Astro-linked company, Maxis, in Aircel Televentures Ltd, another telecom firm.
According to the FIR, T Ananda Krishnan is the common promoter of Astro All Asia Networks as well as Maxis Communications. Also, it stated, a company Usaha Tegas, a Malaysian investment company, of which Ananda Krishnan is chairman has substantial shares in both the companies and Ralph Marshall is director in all three firms.
However, countering these allegations, the court ruling stated that “perception or suspicion are not enough for criminal prosecution… the perception or suspicion is required to be investigated and supported by legally admissible evidence, which is wholly lacking in this case”.
The case collapsed in court two years after the Enforcement Directorate (ED) had attached properties and assets of the Marans valued at Rs 742 crore.
Appleby documents reveal behind-the-scenes transactions. Records show that Appleby prepared a document on May 22, 2012, when Astro was anticipating that a Letter Rogatory would be filed by the CBI to Malaysia government. The Appleby document dated April 22, 2015 states that they “have been instructed by directors of South Asia Entertainment Holdings Ltd to carry out a due diligence on the investments made by the latter in Sun Direct TV and confirm that the investments are made in accordance with the laws of Mauritius”.
The Due Diligence report prepared by Appleby mentions that the investments into Sun Direct were to the tune of $166 million and were made for downstream investment opportunities in the pay TV market in India.
This document explains the structure for Astro’s investment via Astro Overseas Limited (AOL), a company incorporated in Bermuda, and registered as a foreign company in Malaysia. AOL, in turn, wholly owns South Asia Entertainment Holdings Limited (SAEHL), which is also incorporated in Mauritius and was the signatory for the joint venture which subscribed for 20% of shares in Sun Direct.
The CBI, in its FIR, alleged that Astro’s initial $122 million investment in Sun Direct in 2007 was not genuine and constituted an “illegal gratification” paid to benefit Dayanidhi Maran in return for the then Union Minister allegedly coercing Aircel’s Sivasankaran into selling his stake in the telecom firm to Maxis.
What is revealing is the fact that in the share subscription agreement signed by the companies (dated January 10, 2008) as well as in the FIPB application, NDTV News Limited is listed as a shareholder/signatory. NDTV is shown to have a 1.09% stake in the company in the share subscription agreement but a 2.39% shareholding when the company applies for a 20% FDI investment.
The shareholding of the other partners is listed as the follows: Sun holds the majority stake of 86.85%; Kalanithi Maran himself 0.32%; a company by the name of A H Multisoft 11.74%. It is NDTV’s corporate office address in the Okhla Industrial Area, which is given in the documents.
Incidentally, Appleby data also contains correspondence between Astro’s top management and the CBI, and the exchanges begin shortly after the agency filed its FIR in the case on October 9, 2011. The role of Appleby in the correspondence is evident. In one exchange dated May 22, 2012, it elaborates how — in view of queries sent by the CBI — there was need to hold urgent board meetings of the Astro companies involved and that Appleby representatives should be present at the Board meeting.
In fact, the first in the bunch of letters written by Astro officials to the CBI is by its then chairman Haji Badri Masri — it is also marked to then CBI director AP Singh — in which he distances himself from the allegations, categorising their investments in India as “legitimate commercial and business transactions”.
In another communication, dated March 21, 2012, to the then CBI director, the then Astro chairman boasts about how their investment in Sun Direct was one of the largest FDI inflows in India in the DTH sector. Masri adds that in May 2011, Astro was in the final stages of making a further investment of $125 million in Sun Direct in order to increase their stake from 20% to 35%. He adds: “Astro has in fact restrained itself in undertaking further financial and business commitment on account of the ongoing investigations and the consequent uncertainty.”
Response from NDTV:
In order to understand NDTV’s entry into FM radio in the right perspective, it is firstly important to recognise that NDTV News invested into radio companies as early as 2005, well before Sun TV/ Kalanithi Maran entered into the radio business. Secondly, NDTV News only entered as a minority shareholder as the main aim was to produce and broadcast independent and credible news on FM radio if and when it would be permitted under the regulations. Thirdly, it is important to recognise that with the aim of doing news on radio in mind, NDTV News was always a minority shareholder, NDTV News’ shareholding was less than 3%. Fourthly, NDTV News exited the radio companies in 2009, much before CBI commenced enquiry into Astro, etc. Finally, every step that NDTV News took was declared publicly to all the relevant authorities and was 100% kosher in every respect.
The foray into the radio news business in 2005 by the NDTV group was a natural progression. At that point of time, the NDTV group was contemplating entering into space of airing news and current affairs programmes on radio in anticipation of policy changes permitting radio companies to enter into news business. It is factually correct that NDTV News gave a loan of Rs 8.26 crore. This loan was pursuant to shareholder’s obligation in which the shareholders of SAFL were to contribute to the funding requirement either through equity participation or through loan in proportion to their shareholding in SAFL. There was no ‘acquisition’ of 33.89 lakhs shares by NDTV News in SAFL, the existing loan was converted into 33.89 lakhs shares.
It is incorrect to say that NDTV News dealt directly with Kalanithi Maran or Sun TV. NDTV News entered into the radio business much before Kalanithi Maran and Sun TV entered the radio business, as it offered a business case to allow for NDTV’s news content to reach a wider audience as and when news and current affairs content production by private companies was allowed for radio broadcast.
Subsequently, a consortium of Astro and Arjun Rao group (promoters of Value Labs), who were the majority shareholders in the radio business, wanted to scale its existing radio business by partnering with Sun TV and Kalanith Maran for a pan-India radio business, NDTV News as a small minority shareholder entered into the aforesaid agreement because the majority shareholders wanted to do so. Further, note that the agreements were entered into with Sun TV and Kalanithi Maran who was not a politician — Kalanithi Maran was an established businessman with an expansive, diversified media business across India.
When the majority shareholders of SAFL — a consortium of Arjun Rao group (promoters of Value Labs) and Astro entered into an understanding to be a part of larger pan-India radio business, NDTV News perforce had to also do the same, being a minority shareholder. Once again, note that NDTV kept a small stake in this radio business solely because the agreement gave NDTV the first right to do independent news on FM radio stations if and when the government allowed news on private FM radio.
Also, all these agreements were made after making complete disclosures and therefore, to imply that there was something unethical about having a timely stake in the radio business seems to be an effort to tarnish NDTV’s reputation for no reason. In any event, the government did not permit radio companies to enter into news business and therefore, NDTV News exited the radio companies in 2009. As regards your question of disclosure of this investment in income tax computation, as per every professional and our understanding of income tax laws, investments made are capital in nature does not enter income tax computations. NDTV News filed its annual tax returns, fully as per law.
Please note that NDTV News exited agreement and was no longer part of the FM radio company long before there was any CBI enquiry into Sun TV-Astro which makes it clear that NDTV’s exit and the CBI enquiry had no connection at all. The cost of radio business in India was demanding — cost of music library licenses and annual radio license costs and other financial demands of the radio business in India, required significant funding. Most importantly, with uncertainty around any change in the radio policy concerning airing of news & current affairs content by private radio broadcasters and the funding requirements of the SAFL radio business, a commercial decision was taken in ordinary course to exit in 2009.
Harsha Moily/ Mauritius-based Unitus
Harsha Moily’s firm received investments from subsidiaries of Unitus Group to promote microfinance measures
IN THE years when Veerappa Moily was Union Minister in the UPA Government, his son Harsha Moily floated a firm which received investments from subsidiaries of the Unitus Group, a clutch of funds to promote microfinance. Unitus Group has several investment vehicles including funds such as Unitus lab; Unitus Equity Fund; Unitus Capital; Unitus Seed Fund and Unitus Impact, registered in Seattle and Bangalore.
Appleby reports show that Mauritius-based Unitus Impact PCC — the company was incorporated by Appleby as a Protected Cell Company in February 2012 — has only one shareholder, Unitus Impact Partners LLC.
The PCC has two cells: Kinara Unitus Impact Partners — till 2014, it had not begun to transact and its shares have not been subscribed; and, MYA Unitus Impact Partners, which has invested in Harsha Moily’s company, Moksha-Yug Access Private Limited. An Appleby report notes that its sole subscriber to the shares of the cell is UIP MYA LLC.
A March 2012 “client screening check” by Appleby states that Harsha Moily has been listed as a PEP (politically exposed person) since his father was (then) the current Union Cabinet Minister for Corporate Affairs.
Notarised records that form part of Appleby data show Harsha Moily (in 2012) holds 37.24 % of the Moksha-Yug Access India Private Limited shares (31.97 lakh); Mauritius Unitus Corporation holds 26.33% of the shares (22.61 lakh); Vinod Khosla 17.37% ( 14.92 lakh shares) and the MYA Employee Stock Trust 7.29 % (6.26 lakh shares).
According to the company’s website, besides Harsha Moily, the firm’s investors are Unitus Equity Fund, an equity fund affiliated with Unitus Inc; Khosla Impact Fund, founded by Vinod Khosla and Mark Straub and Unitus Impact, a venture capital firm that invests in companies building supply chains and distribution systems aimed at the working poor. In Appleby records, this is the background of Moksha-Yug Access Private Limited: “The Company is engaged in the rural supply chain solutions business. It involves organising the rural producer base, establishing the procurement network in rural areas and establishing market linkages with downstream players in the value chain.”
Appleby data reveals that while MYA Unitus Impact partners has just one shareholder — UIP MYA LLC — this shareholder in turn has a share subscription agreement with Unitus Impact PCC in March 2012, thereby completing the chain. The 2014 compliance report notes how, “a share subscription agreement dated 15th March 2012 could be seen between Unitus Impact PCC and UIP MYA LLC. However, no resolution approving this agreement could be seen…” Also that, “no verification of BO (beneficicary owner) and Declaration of Source of Funds Form could be seen for UIP MYA LLC” and that no proof of investments could be seen.
While MYA stands for Moily’s company’s name Moksha Yug Access, it is important to note that all the companies linked to the Unitus Impact PCC have the name MYA in it. Appleby documents show that Unitus Impact PCC passed a written resolution and established a Cell 1 account for the purpose of investing in shares of Moksha Yug Access and according to an agreement dated March 15th, 2012, the shares were purchased for $ 736,270 by Unitus Impact MYA LLC.
Even as there are 14 shareholders in UIP MYA LLC, the July 2014 compliance report states that the shareholders’ percentage shareholding is very minimal and thus hints towards unnamed individuals or entities that own majority shareholding. While documents suggest that the money was to be invested in India, the compliance report seeks an undertaking from the promoter stating that the company, Unitus Impact PCC will not be using funds sourced from India.
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Response from Harsha Moily:
Having founded MYA and led the company as its CEO since its inception in 2005, I have seen MYA experience growth as well as face significant challenges in operating an impact business in rural India. The dairy/ agri space is extremely volatile, but it is a critical sector for rural India and we worked hard to make our business model work.
MYA has always had a farmer-first approach, and our objective has always been to ensure that our dairy farmers be benchmarked with the best in the world in terms of productivity (quality and quantity of milk per cow) and that economic growth be balanced with human progress. With this primary objective, it was imperative that MYA raise external investment from professional investors in the impact investment space including by Unitus Impact PCC – MYA UIP, the investment vehicle set up by Unitus Impact to make investments into MYA (they led an investment round in 2011). Please also note that we have raised capital from a range of other professional institutional investors such as Unitus Equity Fund and Khosla Impact (both of whom originally invested in 2008) through their investment vehicles, with much of the overall equity investment into MYA having started even before my father became a Union Minister in UPA II.
Investments into MYA by all investors and my own shareholding are in the public domain and relevant filings have been done with Registrar of Companies and the Reserve Bank of India. The funds were used by MYA in implementing a difficult, but important, business plan in the dairy business and in compliance with all applicable laws. Annual filings (including audited financial statements) by MYA have also been periodically made with the concerned regulatory authorities, and the same is available in the public domain.
A personal note. My father being a prominent politician, and a man whose integrity I have always been proud of, it’s not surprising that I would be labeled as a Politically Exposed Person (PEP). However, he has never been involved or interfered in the management, operations or fund raising activities of MYA. MYA has been a professionally managed company following standards of corporate governance and transparency. Engaging with the dairy farmer every day (sometimes multiple times) has been one of the most fulfilling things I have done – and certainly one of the most important economic and emotional connections I have ever had with rural communities.
As a final thought, I would reiterate that, apart from investment capital received from professional institutional investors (who invested in different rounds after independently conducted due diligence on the company by quality legal an accounting firms), MYA has no association with any offshore entities. The fact that my father was a Union Minister in 2012 has no correlation with MYA securing investments from Unitus Impact. The investments have come from Unitus Impact (and indeed other investors) based on their assessment of MYA, the opportunity and their investment philosophy.
Network 18 Group
Paradise Papers: Appleby data reveal earlier links of the Network 18 Group to four offshore entities — three of which have been listed in balance sheets by the company as subsidiaries.
In 2007, US media conglomerate Viacom entered into a 50-50 joint venture with Raghav Bahl’s Network 18 to set up Viacom 18 which, in turn, launched various subsidiary companies that were incorporated by Appleby in different tax havens, records show. The Network 18 Group saw a change of ownership in 2014 when Managing Director Bahl sold out through a debt vehicle to Reliance Industries which, through various firms, has a 75% holding in the company.
Appleby data reveal earlier links of the Network 18 Group to four offshore entities — three of which have been listed in balance sheets by the company as subsidiaries. Appleby records identify one subsidiary as Roptonal Ltd, registered in Cyprus and described in the annual report as a wholly owned subsidiary of Viacom 18. Another is shown as The Indian Film Company, also a wholly owned subsidiary of Viacom 18, registered in Guernsey.
Appleby records show that Bahl, as Director, handled the affairs of the two other offshore companies and submitted applications with Appleby for their de-registration. The first application is for Network 18 Holdings Ltd which, on April 19, 2012 passed a special resolution. On April 30, 2012, another application was filed for the company in Cayman Islands, where it was registered in 2006, to be de-registered “by way of continuation” in Mauritius.
The profit and loss statement attached with the application from Appleby to the Registrar of Companies in Cayman Islands states that for the year ending 2011, the balance in accounts of Network 18 Holdings Ltd was $22.8 million. The applications and affidavits were signed by Bahl. The second company for which the de-registration process was undertaken by Bahl was Web 18 Holdings Ltd. This company, also registered in 2006, made a request to Appleby on September 18, 2012, for being taken off the registry of Cayman Islands and shifted “by way of continuation” to Cyprus.
Response From Raghav Bahl:
The overseas companies mentioned by you were set up/ migrated in due compliance with applicable laws for undertaking international media operations of the Network18 Group. Due disclosures regarding set-up etc. of these companies were made by the Network18 Group in the financial statements of the relevant years. Also, do note that post the transfer of ownership of Network18 Group (July 2014), I am not associated with these companies in any manner.
MV Nordlake, Cyprus, limits its liability through offshore companies
On January 30, 2011, INS Vindhyagiri, entering the Mumbai dockyard, was involved in a collision with MV Nordlake, a Cyprus-flagged container carrier which was moving out of the harbour.
Weeks after the Indian Navy blamed the MV Nordlake for the sinking of its frigate INS Vindhyagiri in 2011 and sought over Rs 1,000 crore in damages, the owner of the merchant vessel approached offshore legal firm Appleby to set up “8 Isle of Man companies to hold 8 vessels” to “limit liability” and ringfence assets.
On January 30, 2011, INS Vindhyagiri, entering the Mumbai dockyard, was involved in a collision with MV Nordlake, a Cyprus-flagged container carrier which was moving out of the harbour. INS Vindhyagiri caught fire and capsized. The Indian Navy’s First Information Report blamed the collision on MV Nordlake which rejected the charge . On February 23, 2011, an admiralty court formally placed MV Nordlake under arrest. The Indian Navy claimed Rs 1,058.54 crore in damages. MV Nordlake sought release by depositing a surety of Rs 46.87 crore, the value of the ship as assessed on April 7, 2011.
At this juncture, Appleby records show, the owner of MV Nordlake approached the law farm on May 5, 2011through a lawyer in Germany Ulf Bertheau of Cyrus Ross, an association of law firms in Europe by to inquire about setting up eight companies in the Isle of Man to park one vessel each to “limit liability” in case of any adverse verdict. “The UBO (ultimate beneficial owner) is Mrs Christiane Scola. Reference website ‘rnkeo.com’, which has been newly designed after the accident of the ‘Nord Lake’, which has capsized a frigate in India after a collision on 30th of January 2011. This event prompted the enquiry for new Companies by the client is looking to limit liability and ring fencing assets,” Appleby’s ‘New Businesses’ records state.
Christiane Scola was wife of Klaus E Oldendorff, founder of the Reederei Nord Group in the 1960s. The couple emigrated to Limassol, Cyprus, in 1987. Christiane Scola took charge of the business after her husband’s death in 2003 and handed over shares of the group companies in equal parts to her two sons in 2013. She died in 2014.
Appleby records also underlined “utmost confidentiality” of the client’s details: “The client comes from a family well known to Simon i.e. the heirs of the late brother of Henning O. They have split their companies in the early 60s, this is of utmost confidentiality and you should not mention at all the names vice versa.” Appleby records do not reveal if the company went ahead and incorporated companies in the Isle of Man, an offshore financial centre.
In March 2012, Bombay High Court allowed the release of MV Nordlake on the ground that an admiralty court cannot ask the vessel-owner to deposit a sum higher than the cost of the arrested vessel as surety even if the damages sought are greater.
In April 2012, the Supreme Court refused to stay the High Court order, ruling that the value of the bail required to secure the vessel’s release cannot exceed its value.
In August 2012, the Central Information Commission ruled that details of the inquiry and the status of the case would not be revealed under the Right To Information (RTI) Act to safeguard India’s national security. Subsequently, claims were brought in London on behalf of MV Nordlake. In January 2016, the London High court assigned 60 per cent responsibility for the collision to MV Nordlake.
When contacted, Ulf Bertheau said in an email: “I am not aware of what you are referring to. Nevertheless, as you will appreciate my professional duties do not allow any comment to your mail.”
In an email, Reederei Nord said: “The Nordlake was released by the Indian authorities after about 12 months of arrest in exchange for security payment in cash to the courts of India (in the amount of the vessel’s value of about USD 8 million). The court case about the question of the final responsibility for the damage is still pending in India. Any potential liability is covered by our security payment and the vessel’s insurance. “There is only one court judgment from London in the wider context of this case. This case, however, has no further relevance in relation to the Indian frigate, and the English judgment is not binding in India either.
“We do not work with any lawyers on or about the Isle of Man and we do not know the law firm you mentioned. All our ships fly EU flags and all offices of our company group businesses are located and registered in EU countries, except for a marketing office in Asia. We pay all taxes in the EU as obliged by law.
“We have worked with the lawyer Mr Bertheau in other matters in the past, but our business relationship has been terminated some years ago. We did not appoint Mr. Bertheau for any matter concerning the Nordlake case in India. Mr. Bertheau was also not handling the Isle of Man flag case as described above.
“Many mediators, lawyers and other “specialists” approached us after the prominent collision of Nordlake and offered a variety services and had very proactive ideas, all unsolicited. But none of them received an appointment from us, other than Ince & Co in London. This law firm represents our interests in India.”
The Indian Navy is yet to respond to queries.
Ulf Bertheau said in an email: “I am not aware of what you are referring to. Nevertheless, as you will appreciate my professional duties do not allow any comment to your mail.”
Reederei Nord, owner of Nordlake, said in an email: “The NORDLAKE was released by the Indian authorities after about 12 months of arrest in exchange for security payment in cash to the courts of India (in the amount of the vessel’s value of about USD 8 million). This security amount was determined by the rules of an international treaty for the definition of liability at the sea.
2. Our ship had not suffered any significant damage by the collision, only paint scratches. The master had been detained onboard for several months by the Indian authorities, without a court hearing. But he was finally released, after involvement of the German consul. He is in pension now. The colliding frigate (built in 1978) sank a few days after the collision. This sinking was ultimately caused by the fire-extinguishing water while she was alongside the navy terminal.
3. The court case about the question of the final responsibility for the damage is still pending in India. Any potential liability is covered by our security payment and the vessel’s insurance. There is only one court judgment from London in the wider context of this case. As owners of NORDLAKE, we had sued the owner of a Greek container ship, which was also involved in the collision with the frigate but could escape unrecognized at the time. This case however, has no further relevance in relation to the Indian frigate, and the English judgment is not binding in India either.
4. We do not work with any lawyers on or about the Isle of Man and we do not know the law firm you mentioned. The only case in which we had dealings with the Isle of Man was about 15 years ago when we had transferred a container ship (NORDBALTIC) from the ships registry in Cyprus to the ships registry Isle of Man for operational reasons. That ship had been be re-registered in Cyprus ships registry a few years ago and since then, we had no contact with any institution on the Isle of Man.
5. All our ships fly EU flags and all offices of our company group businesses are located and registered in EU countries, except for a marketing office in Asia. We pay all taxes in the EU as obliged by law.
6. We have worked with the lawyer Mr Bertheau in other matters (documentation of ship sales) in the past, but our business relationship has been terminated some years ago. We did not appoint Mr Bertheau for any matter concerning the NORDLAKE case in India. Mr Bertheau was also not handling the Isle of Man flag case as described above.
7. It might be worth mentioning that many mediators, lawyers and other “specialists” approached us after the prominent collision of NORDLAKE and offered a variety services and had very proactive ideas, all unsolicited. But none of them received an appointment from us, other than Ince & Co in London. This law firm represents our interests in India and against the aforesaid Greek vessel.
8. We can assure you that since the 53 years of the existence of the shipping company NORD, we have always paid all taxes, bank debts and liabilities etc. on time. Further, we take the social responsibility towards our employees on land and the seafarers very seriously and we consider ourselves as one of the best ship operators in Europe.
9. We would also like to point out that we do not allow you to publish personal names, neither of the Oldendorff family, nor Scola, nor mine or any other employees. None of these persons is a person of public interest and we would ask you to respect that.
Narinder Pal, Mala Arora
Doctor couple Narinder Pal and Mala Arora are listed as shareholders of WorldCare Limited (Bermuda), a company set up in June 1996.
Pal and Arora are listed as shareholders of WorldCare Limited (Bermuda), a company set up in June 1996.
Paradise Papers: Before winding it up, Cognizant waived loans to its Isle of Man entityParadise Papers: Before winding it up, Cognizant waived loans to its Isle of Man entity
Faridabad-based doctor couple Narinder Pal and Mala Arora have been running an IVF centre in Sector 14 since the mid-1990s. Dr Arora is an gynaecologist while Dr Pal is an anthologist, a specialist in treatment for the male reproductive system. Pal and Arora are listed as shareholders of WorldCare Limited (Bermuda), a company set up in June 1996.
According to Appleby records, WorldCare Limited (Bermuda) is an “investment Holding Company which renders services in the field of telemedicine and remote medical diagnosis”. The other Indian on the list of several shareholders of WorldCare Limited (Bermuda) is Anil Kaul, who is listed with a Delhi address.
Records show WorldCare Limited (Bermuda) as the beneficial owner of The Dubai Wellness Centre Limited, a company incorporated in Isle of Man in 2006. It is also a shareholder of two other Isle of Man companies — WorldCare Wellness International Limited and WorldCare Autism Centres Limited.
When contacted, Narinder Pal denied any knowledge of WorldCare Limited (Bermuda). He and Mala Arora did not respond to subsequent emails seeking comment. Anil Kaul is not among the current tenants at the Vasant Vihar address listed in his name on Appleby records. Staff at the address said they did not know anyone by that name.
Ankitkumar Pramukhbhai Patel, Ahmedabad; Mohammed Iqubal Khan, Gurdamakhurd, District Saran, Bihar
Offshore jurisdiction
Malta
Ankit Patel is the son of BJP leader Bhavnaben P Patel, the councillor of Ghatlodia ward of Ahmedabad Municipal Corporation. Bhavnaben lives in Abhinandan Cooperative Housing Society in Ghatlodia.
Iqubal was not available at his home in Bihar’s Saran, but spoke over the phone subsequently. He said he does farming and small jobs for a living.
Malta registry data show Patel and Khan as Directors, legal representatives and judicial representatives of a Malta company whose registration number is available, but whose name is not. Khan is also recorded as a shareholder of the Malta company.
RESPONSE: Asked about Ankit, Bhavnaben said: “He stays abroad.”Informed about the company that her son owned in Malta, she said, “That company was closed many years ago. He has not been to Malta since 2006. Earlier. he went on a tourist visa for seven days, and then on a student visa.” Bhavnaben declined to provide any more details about the company, or Ankit.
Iqubal Khan said he had gone to Malta in January 2002 as a “worker” at an offshore company called “Mechanical Limited”, returned to his village in early 2007, and had not gone back. A fellow villager accompanied him, he said, and “at least 35 (other) people” had gone to work as welders, fitters and technicians. He said he had got a contract from a government hospital to provide technicians from India for the construction of its new building. However, he had not incorporated the company, and he had no idea whether those who had done so had sought the RBI’s permission and filed I-T returns, he said. “From whatever little I know, one cannot open an offshore company without mentioning his I-T returns and later declaring his association with the company in his subsequent I-T returns. One also needs a local resident to start an offshore company,” Khan said. He repeatedly denied any direct association with the offshore company, which he said was still in existence.— AVINASH NAIR, Ahmedabad and SANTOSH SINGH, Chhapra
Prasad V Potluri
Indian subsidiaries also invested in Jagati Publications Ltd, owned by Y S Jagan Mohan Reddy
Prasad V Potluri was involved in politics, software, analytics, power and real estate before shifting over the last five years to film financing, media and entertainment. Hyderabad-based Potluri entered the big league after his offshore entity in Mauritius, Platex Ltd, borrowed $258 million with Deutsche Bank acting as the facility agent.
Documents with Bermuda law firm Appleby show that Platex, an investment holding company held entirely by Potluri, was used by him as a vehicle to acquire a majority stake in his India-listed company, PVP Ventures Ltd. Filings by PVP Ventures Ltd with the Bombay Stock Exchange show that Platex holds 54.12 per cent in the Indian company.
Appleby records show that Deutsche Bank syndicated the loan to Citadel Equity Fund Ltd and Spinnaker Capital LLC. Initially, Platex borrowed $225 million by entering into a share pledge agreement on December 22, 2006 — Potluri was the ‘pledgor’, DB Trustees (Hong Kong) Ltd the ‘pledgee’ and Platex the borrower. The loan amount was increased to $258 million in March 2008.
Records show that the money was used to invest in real estate projects through PVP Ventures Ltd’s subsidiaries, which also invested in Jagati Publications Ltd, a media firm owned by Y S Jagan Mohan Reddy, YSR Congress chief and son of former Andhra Pradesh Chief Minister YS Rajasekhara Reddy.
PVP Ventures Ltd’s annual report for 2010-2011 state that Potluri was questioned and his offices searched by the CBI following an investigation ordered by the Hyderabad High Court into investments in Jagati Publications Ltd. Potluri was named as an accused in the CBI FIR, which alleged that he received land as a quid pro quo for investing in Jagati.
According to PVP’s latest annual report for 2016-17, it invested Rs 130.97 crore in Jagati. Till 2015-16, it didn’t make any provision for this unquoted investment. But in 2016-17, the latest annual report shows, it provided Rs 112.78 crore towards diminution in value of this investment.
Appleby records show that when Platex was raising funds from lenders, Potluri entered into a guarantee agreement with the offshore entity. They show that Citadel Equity Fund Ltd approached courts in India to prevent Potluri and his companies from allegedly stripping the PVP Ventures Ltd and its subsidiaries of their assets in November 2009.
According to Appleby documents, the facility was secured by a fixed and floating charge over the assets of Platex under a deed dated December 22, 2006, a pledge over all shares of Platex and a personal guarantee of Potluri. The terms required payment of 50% of the outstanding and $10 million in premium in December 2009. The balance amount was to be paid in December 2010. But the lenders moved the court in May 2010, having failed to secure repayments. Platex, the lenders alleged, had not been meeting its interest payment obligations since June 2008.
According to complaints made by the lenders in the Supreme Court of Mauritius, the conduct of Platex belied assurances “after it came to light that some of the Indian subsidiaries had disposed of significant assets to third parties without obtaining the requisite approval of the lenders and utilised the proceeds without consulting them”. They further instructed the Facility Agent to declare an Event of Default under the Facility Agreement in November 2009 and accelerate the facility, making it immediately due and payable.
The lenders were also keen that Platex convert part of the debentures due for conversion by January 2010 — 27,255 out of 40,644 — into redeemable convertible preference shares and not equity. This provided them an easy way to repatriate cash generated through sale of assets in PVP to Platex. If converted into equity, there would be very few or limited means in which cash in PVP Ventures may be repatriated to Platex.
But the annual report of PVP Ventures Ltd shows that 1.34 crore shares were issued to Platex upon conversion of 27,355 FCDs of Rs 100,000 each at a conversion price of Rs 204 per share in terms of the scheme of amalgamation during 2010-11.
PVP Ventures Ltd has a string of subsidiaries which operate in the real estate, media and entertainment space. In 2016-17, the consolidated profits of the company stood at Rs 8.93 crore on a consolidated total income of Rs 156.66 crore.
Its annual report for the year lists four wholly-owned subsidiaries — PVP Corporate Parks Pvt Ltd, PVP Global Ventures Pvt Ltd, PVP Media Ventures Pvt Ltd and Safetrunk Services Pvt Ltd. It has majority stake in two subsidiaries, New Cyberabad City Projects Private Ltd, Picturehouse Media Ltd. And, four step-down subsidiaries, Adobe Realtors Pvt Ltd, a wholly-owned subsidiary of PVP Global Venture, and PVP Capital, PVP Cinema Pvt Ltd and Picturehouse Media Pvt Ltd, Singapore, which are wholly-owned subsidiaries of Picturehouse Media Ltd.
According to records, the capital market regulator SEBI has fined Potluri and his companies to the tune of Rs 30 crore for alleged non-disclosure under takeover and insider trading regulations. This includes a penalty of Rs 15.15 crore on Potluri and PVP Global Ventures Private Ltd, a wholly owned subsidiary of PVP Ventures Ltd. Both these orders have been challenged by the company and are pending at the Securities Appellate Tribunal, according to its latest annual report of 2016-17.
Separately, auditors Brahmayya & Co of PVP Ventures Ltd have qualified the company’s financial statements of 2016-17 and invited shareholders’ attention to investment of Rs 560.5 crore in a few subsidiary companies. “…the erosion in the net worth of these subsidiary companies, their dependence on the holding company to continue as a going concern, absence of cash flows, delay in commencement of projects…indicate the existence of material uncertainty in recoverability of net carrying value of investments,” the auditor noted.
Response from Platex Ltd:
1. Was Platex Ltd, a company incorporated in Mauritius used as a vehicle to invest in PVP Ventures Ltd?
Ans Yes, Platex Ltd., was the vehicle formed to invest in PVP Ventures Pvt. Ltd. Upon formation, the funds that were raised from lenders vide facility agreement dated 22.12.2006, $207 million which is in INR 886.44 crores in 2007-08, against which PVP Ventures Pvt Ltd has issued 88,644 FCDs of Rs. 1,00,000 each with coupon rate of 14.5%. Subsequently, issued FCD’s were converted as mentioned below to equity shares of PVP Ventures Ltd
2. Are you the sole shareholder in Platex Ltd?
Ans – Yes, Prasad V. Potluri is the sole and 100 percent shareholder of Platex Ltd. The share capital of Platex Ltd is 5415000 ordinary shares of USD 1 each. Mr. Prasad V. Potluri holds the same. (Certificate no 2 & 3)
3. Did Platex Ltd raise $258 million ($225 million in December 2006 and another $33 million in March 2008) from Deutsche Bank AG?
Ans– Platex has raised a total of $258 million in two tranches through facility agreement dt. 22.12.2006 and subsequent agreements
4. Were these funds fully deployed was equity in PVP Ventures Ltd?
Ans– $207 million which is in INR 886.44 crores is invested in PVP Ventures Ltd i.e, PVP has issued 88,644 FCDs of Rs. 1,00,000 each with coupon rate of 14.5%. Part of the funds were paid as fees to advisors and interest costs. In addition the second tranche of $33 Million were deployed by Platex Ltd., towards the acquisition of an indirect minority interest in a Power Plant controlled by Lehman Brothers.Private Limited utilised the FCDs proceeds as follows:
Money paid by PVP Energy Private Limited towards take over and purchase 3,54,53,587 (61.25%) equity shares of SSI Limited
5. Are AMB India Investments LLC and Spinnaker Capital LLC the new lenders (with the $258 million facility now being transferred to them)?
Ans– To the extent of $158 million, the facility was transferred from Citadel Equity Fund Ltd to AMB India Investments LLC vide transfer certificate dated Dec 16, 2009. Attached is the amended facility agreement.
6. Did you provide guarantee to Platex Ltd when the latter borrowed these moneys?
Ans –Mr. Prasad V. Potluri is personal guarantor in addition to the security provided to lenders by Platex Ltd., as per Guarantee agreement dt. 22.12.2006
7. Were part (Rs 130.97 crore) of these borrowings also used to fund Y Jagan Mohan Reddy’s company Jagati Publications?
Ans –The investment made in Jagati Publications were not from borrowings of Platex Ltd. The investments made are from the internal sources of PVP Ventures Ltd. As mentioned, the investments were part of a broader strategy to enter into the media and entertainment industry. The group now is a leader in the South Indian entertainment and media space.
8. Did Platex Ltd default over repayments as per the agreement with lenders who claim Platex has not been meeting its interest obligations since June 2008?
Ans– Post the bankruptcy of Lehman Brothers in September 2008, the development plans of the acquired asset of PVP Ventures Ltd., popularly known as Binny Mills in Chennai was stalled by the development partner Unitech Ltd. At which time, management discussed with lenders to provide additional capital as committed for the acquisition of a power plant which was discussed and approved earlier. The investors and lenders Owing to the distress in the financial markets around the world were not in a situation to fund further.
9. What is the status of the Supreme Court of Mauritius hearings on this case; the lenders alleged that some of the Indian subsidiaries of PVP Ventures had disposed of significant assets to third parties without obtaining the requisite approval of the lenders and utilised the proceeds without consulting them?
Answer – Request to review the entire case filed in the Supreme Court where in Platex Ltd., along with Prasad V. Potluri made a counter claim against the investors. The claim not only stated the lenders were SECURED creditors and had adequate security for their loans and furthermore have not delivered funds for future progress plans of the company as approved by them. Platex Ltd has obtained a favourable ruling and pursuant to which, the lenders settled the matter. Court order dt 02.02.2011 is attached for your reference.
10. What’s the status of the CBI investigation of PVP’s investment in Jagati Publications, the venture of Y S Jagan Mohan Reddy?
Answer: In reference to your inquiry on Jagathi Publications, we are one of the few shareholders that received a clean chit from CBI as filed by them via a memo in CBI court. In addition, I have neither heard nor dealt with Appleby anytime during my career over the past 20 years. When Platex Ltd was formed, the residing agent was Multiconsult Ltd in Mauritius. All the financial statements of Platex Ltd., are filed with the regulators in Mauritius and available in the public.
Nimmagadda Prasad, associate of Y S Jagan Mohan Reddy
Prasad was named in the fourth of 11 chargesheets filed by CBI between 2012-2014 for favours allegedly taken during the tenure of Y S Rajasekhara Reddy as Chief Minister of Andhra Pradesh.
Paradise Papers: Eros International in Appleby records on Indians in Isle of ManParadise Papers: Eros International in Appleby records on Indians in Isle of Man
Apppleby’s records show details of financial transactions related to Nimmagadda Prasad, an industrialist from Andhra Pradesh who was arrested in May 2012 as an accused in one of the clutch of cases filed by the CBI against YSR Congress Chief, Y S Jagan Mohan Reddy, an investigation by The Indian Express reveals.
Prasad, who was also named in the “Bahama Leaks” published by the ICIJ-The Indian Express in September 2016, and his brother were found to have floated 28 offshore firms in the Bahamas. But none was then linked to any alleged quid pro quo with politicians in his state for which he spent 17 months behind bars.
Appleby records now connect new dots between Prasad, the Ras Al Khaimah Investment Authority (RAKIA, Ras Al Khaimah is one of the seven emirates that make up UAE); Vanpic (Vodarevu and Nizampatnam Port Industrial Corridor), the company which got 15,000 acres for an industrial corridor; and Lebanese-Swiss national Khater Massad who was Chief Executive of RAKIA and along with Prasad signed all agreements of the Vanpic project.
While Prasad was accused by the CBI, Khater Massad was arrested at the Jeddah Airport in September 2016 on allegations of embezzling $1.5 billion in connection with a project in Georgia. The arrest warrents were issued by the Ras Al Khaimah Government and Massad was given a prison term of 15 months in absentia.
Prasad was named in the fourth of 11 chargesheets filed by CBI between 2012-2014 for favours allegedly taken during the tenure of Y S Rajasekhara Reddy as Chief Minister of Andhra Pradesh. According to the 177-page chargesheet, filed on August 13, 2012, an estimated 22,000 acres were allotted to Prasad in alleged violation of rules and regulations and despite objections from the State Finance Department.
And that as quid pro quo for land concessions, Prasad invested to the tune of Rs 854 crore in companies owned by Jagan Reddy. In 2014, assets of both Y S Jagan Mohan Reddy and Prasad were seized or attached by the Enforcement Directorate. The same year, the Andhra Pradesh Government cancelled the land allotment to Vanpic.
During bail hearings for Prasad in May 2013, the CBI told the court that of the money invested in Jagan’s companies, Rs 140 crore was routed from various Mauritius-based companies into India to be allegedly diverted into companies of Y S Jagan Mohan Reddy. These include Jagathi Publications and Bharathi Cements Corporations Pvt Ltd.
Records show that Appleby administered these Mauritius-based companies incorporated by Prasad and his associates around the same time their deal with RAKIA was being finalized.
Among Appleby data are revealing due diligence documents and overview reports that trace alleged money flows into a complex web of companies and and highlight gaps in accounting practices.
There are reports by Appleby in January 2015 of two Mauritius companies RAK Vision Ltd and RAK Infra Holdings Ltd, both incorporated as private companies in 2008, with a listed purpose to make investments in infrastructure projects in India.
One ‘’overview’’ report prepared by Appleby states that in 2008, RAKIA transferred $110 million to these two Mauritius companies and the “funds were progressively transferred to Indian companies and transferred to related parties to Nimmagadda Prasad.”
Of this amount, $40 million was transferred by RAKIA to RAK Vision and $70 million to RAK Infra. The last transfer of $10 million was done by RAKIA to RAK Infra in 2009.
RAKIA, which had 100% holding in RAK Infra Holdings Ltd, transferred shares worth $71.25 million to Vanpic Ports in June 2009 and shares worth $3.255 million to Prakasam Airport Private Limited (PAPL, a company in which RAK Infra has also invested) in November 2008.
Similarly, Appleby’s report for RAK Vision Ltd shows that from November 2008 to June 2009, lakhs of shares of the company were transferred from the Mauritius companies into three Indian entities linked to Nimmagadda Prasad — Vanpic Shipyard Private Limited; Vanpic Projects Private Limited and Genexx Enpower Corporation Private Limited.
Records also reveal that in August 2013 — months after Nimmagadda’s arrest — Appleby received a letter from the Financial Services Commission (FSC) of Mauritius which stated, “The FSC took note of reports that appeared in relation to Mr Prasad Nimmagadda and of the investigations conducted by Indian Authorities which revealed that Mr Nimmagadda routed money from Mauritius based companies into India. The funds were then diverted and invested in several Indian companies.”
The FSC also wanted to know what “internal checks” had been put on the companies. Appleby data reveals that even before the CBI chargesheet was filed, on July 5, 2013 the Mauritius Revenue Authority (MRA) sent a letter to RAK companies informing them about a request from Indian tax authorities asking for details on their shareholdings and investments made in the Vanpic Group of Companies.
Appleby notes that one of the Directors of RAK Infra Holdings Ltd replied to the MRA informing them that the company had indeed subscribed for shares for a total consideration of $71.25 million in Vanpic Ports.
Response by Nimmagadda Prasad:
“Rak Investment Authority (RAKIA) is the investment arm of Government of Ras Al Khaimah (GoRAK), one of the seven emirates of United Arab Emirates (UAE). GoRAK and the erstwhile Government of Andhra Pradesh (GoAP) entered into an agreement in 2008 on G2G (Government to Government) basis to develop Port and Port based industrial corridor (Vanpic Project) in a socially, economically backward region of Andhra Pradesh. Matrix Enport Holdings Private Limited was chosen by RAKIA as its local partner to execute the project. I am a promoter of Matrix Enport Holdings.
RAKIA planned the investment through Rak Infra and Rak Vision, its Mauritius subsidiary companies considering the tax treaty between India and Mauritius. These companies are controlled and managed by RAKIA.
As a non-resident Indian, I have incorporated separate companies in Mauritius in 2007-08, which still exist. The purpose of these companies is to raise strategic investments for Vanpic Project. However due to global economic meltdown in 2008, I was not successful in inviting strategic investors for the Vanpic Project.
The CBI filed chargesheet in August 2012 and the charges are yet to be framed and consequently trial has not yet commenced. In the meanwhile, based on the CBI chargesheet, Enforcement Directorate provisionally attached certain personal properties and the Vanpic Project properties. PAO is under contest before the appellate authorities.
RAKIA contributed about $120 Million towards its share capital in various Special Purpose Vehicle (SPV) companies of Vanpic Project namely, Vanpic Ports Private Limited, Vanpic Shipyard Private Limited, Genexx Enpower Corporation Private Limited, Vanpic Projects Private Limited and Prakasam Airport Private Limited (PAPL) through its Mauritius subsidiaries namely, Rak Infra and Rak Vision in compliance under automatic FDI route of FEMA regulations. Necessary returns were filed in this behalf with RBI by the investee companies…The FSC raised certain queries in 2012 and we have replied to the same. There is no revert from them since then. I am pursuing the legal remedies in relation to the CBI case. Since the matter is sub-judice, I will not be able to comment further.”
Gautam Radia, Anil Salgaocar, Shanmuga Rethenam, Ajay Singhvi
Six years before his death in 2016, mining baron Anil Salgaocar partnered son-in-law Gautam Radia and Malaysian investor Shanmuga Rethenam to enter iron ore sector in Swaziland.
Six years before his death in 2016, mining baron Anil Salgaocar partnered son-in-law Gautam Radia and Malaysian investor Shanmuga Rethenam to enter iron ore sector in Swaziland
In 2010, six years before his death, mining baron Anil Salgaocar partnered son-in-law Gautam Radia and Malaysian investor Shanmuga Rethenam to enter iron ore mining in Swaziland, records of offshore legal firm Appleby show.
For the Swaziland venture, Salgaocar set up Eltina Limited in the British Virgin Islands but it ran up huge losses within two years of its operation. Salgaocar passed away in Singapore in 2016 and the project was expropriated. Currently, there is a legal battle on among stakeholders in courts of Swaziland, Canada, France, Seychelles and Singapore — the records do not contain the current status of the legal wrangle.
Records show Shanmuga Rethenam approached Anil Salgaocar through Gautam Radia in 2010 on the availability of iron ore in Swaziland. Within a year of negotiations, the Southern Africa Resources Ltd (formerly Salgaocar Resources Africa Ltd) was formed with Rethenam as sole shareholder “with a view to transfer 80 per cent of the shares” to Salgaocar Asia Pte Ltd (SAPL), a Singapore-incorporated company which is part of the Salgaocar Group.
SG Iron Ore Mining (Pty) Ltd (formerly Salgaocar Swaziland (Pty) Ltd) was incorporated on September 30, 2010 with Southern Africa Resources Ltd holding 50 per cent of shares in SG Iron Ore Mining (Pty) Ltd. Twenty five per cent shares of SG Iron Ore Mining (Pte) Ltd were held by the King of Swaziland and 25 per cent by the Swaziland government. Under the terms, the King of Swaziland was given an advance loan of $10 million.
Records show that in March 2012, Gautam Radia arranged for transfer of 80 per cent of the shares in the Southern Africa Resources Ltd to his name and held them in a trust for Anil Salgaocar — Rethenam now held 20 per cent of the shares.
This Swaziland project was for recycling iron dumps of the Ngwenya mine left behind by Anglo American, from which iron ore was extracted, and sold to countries that included China.
Salgaocar’s affidavit in the High Court of Swaziland stated that to commence the Swaziland project, he injected funds through various channels: SAPL to Southern Africa Resources Ltd $800,000 for 80 per cent shareholding in Southern Africa Resources Ltd; SAPL to Southern Africa Resources Ltd — $3000,000 loan for setting up and starting operations of the iron-ore mine in the Kingdom of Swaziland; Eltina Limited to SG Iron Ore Mining (Pte) Ltd — $10,000,000 as advance payment for iron-ore cargo; and, Eltina to Southern Africa Resources Ltd — $ 9,600,000 as loan.
On April 28, 2011, records show, SG Iron Ore Mining (Pte) Ltd filed an application for a mining licence with the Minerals Management Board (MMB) of the Kingdom of Swaziland. Mining and dispatch of product started on October 21, 2011 to Maputo Port in Mozambique.
In October 2013, Rethenam informed Radia that SARL was in “great financial distress”, that the company had an operating bank balance of less than $0.5 million, and that SARL did not have sufficient funds to pay its creditors. Radia responded to Rethenam in an email, stating he was surprised that the financial position of SARL had deteriorated to such an extent, as SARL had recently posted a profit of over $30 million.
Records show Radia also said that Rethenam owed the company at least $2.6 million due to funds that Rethenam diverted from SARL for personal use or to third-parties. Responding to this, Rethenam said some of the funds diverted from SARL were used for the purpose of refurbishing an aircraft for HMK (King of Swaziland).
Rethenam had appointed Nirmal Rajaram as Chief Financial Officer of SARL. On October 23, 2013, records with Appleby show, Radia sought information on Rajaram’s background as part of his role as SARL chairman. Rethenam responded with an email the same day to both Rajaram and Radia wherein he stated that Rajaram should not respond to Radia’s request for information and recommended that Rajaram resign as CFO. Rajaram did that subsequently.
As the dispute escalated through 2014, records show that Rethenam attempted to isolate Radia from the business affairs of SARL.
Radia attempted to obtain SARL’s financial information from the company’s accountant, PricewaterhouseCoopers LLP, Singapore. PWC did not provide him the information, saying its engagement was with the company and it took its direction from the SARL management.
Records show that Salgaocar, too, was not getting along with son-in-law Radia. In an affidavit, filed in the High Court of Swaziland in November 2014, Salgaocar said, “Gautam without my knowledge started taking hostile steps against me. Gautam entered into an agreement on or about March 2014 to sell 80 per cent of the shares held by him in trust for me in the 2nd Defendant (Southern Africa Resources Limited) to Shan (Shanmuga Rethenam) who was financed by Glencore International AG. Shan (Rethenam), in anticipation of Glencore International AG financing the purchase of shares from Gautam, went ahead to apply for change of name of the 1st Defendant to SG Iron Ore Mining (Pty) Ltd (from earlier name Salgaocar Swaziland (Pty) Ltd) in April 2014. This proposed change of name came to my knowledge in June 20I4.”
But on March 10, 2014, records with Appleby show, Rethenam and Radia reached an agreement to settle their dispute pursuant to which Rethenam would buy out Radia’s interest in SARL and the Shareholders Agreement would be terminated. In addition, Radia resigned from SARL’s Board of Directors.
At the same time, Rethenam was negotiating a deal with Glencore International to invest in SARL and SG Iron and signed a term sheet with them on March 21, 2014. Rethenam and HMK (King of Swaziland), were banking on this deal to be a life changing event for them, records show. But this deal fell through.
In May 2014, Ajay Singhvi became involved in the dispute. Described as a mutual friend of both Radia and Rethenam, Singhvi offered to act as an informal mediator. Both Radia and Rethenam agreed. As part of that process, on June 25, 2014, Radia and Rethenam transferred their shares in SARL to AWMPL or Ace Worldwide Management Pte Ltd, with 80 per cent of the shares to be held in a trust for Radia and 20 per cent in a trust for Rethenam.
AWMPL was to hold the shares in trust until such time that the dispute could be settled. At the same time, Ajay Singhvi was appointed CEO of SARL to SARL’s Board of Directors in June 2014 and Rajaram resigned as Director. By then, SARL and SG Iron were in financial distress, which strained Rethenam’s relationship with HMK (King of Swaziland), records show. Rethenam fell ill and even agreed to sell his house in Singapore and his Bentley car to inject funds into SARL, records show. He did sell the Bentley, not the house.
On August 21, 2014, the Swaziland government issued an order that no more iron ore should be sold. In January 2015, the SARL sent a notice for arbitration before the World Bank’s ICSID, requesting compensation of more than $141,000,000, plus other damages and interest.
Full response:
Gautam Radia, Sameer Salgaocar (son of late Anil Salgaocar), Shanmuga Rethenam, Ajay Singhvi and the Government of Swaziland were approached for comments. Only Radia and Singhvi responded.
Gautam Radia: “I was a shareholder of Southern Africa Resources Limited, Seychelles (SARL) along with Mr Shanmuga Rethenam (“Mr Rethenam”), a citizen of Singapore. I purchased my shares from Mr Rethenam directly and paid for these using my savings bank account in India. At all times during which I was a shareholder, Mr Rethenam and I were the only two Directors and the only two shareholders of SARL. I was a Non-Executive Director of SARL, Mr Rethenam was Director and President. SARL ceased doing business in Quarter 3 of 2014. I sold all my shares in SARL in December 2014 and remittance from the sale of these SARL shares was received in my Indian bank account.
Seychelles was chosen as the domicile base for the Africa operations because of its proximity to Mozambique and Swaziland. As you are aware, Swaziland is land-locked and the logistics business of SARL required operations in Mozambique, Swaziland and Singapore.
I was not a Director of SG Iron (Proprietary) Limited, Swaziland at any time. I was not a Shareholder of SG Iron (Proprietary) Limited, Swaziland (“SG Iron”) at any time. Mr Rethenam was Executive Chairman and President of SG Iron from inception until liquidation. Mr Rethenam had special veto rights granted to him by the Kingdom of Swaziland. SG Iron was not permitted to undertake any excavation of minerals from the ground. The lease was restricted to above ground dump clearance. These dumps only contained mining rejects accumulated when the mining operations were conducted from 1960’s until 1983 when the mine was permanently shutdown. SARL owned 50% of SG Iron. A Liquidator was appointed by the High Court of Swaziland to liquidate SG Iron in October 2014. The company’s liquidation was completed in February 2015 by an Order of the High Court of Swaziland. The crash in the prices of iron-ore in the period March 2014 till October 2014 killed the future business prospects of SG Iron. The prices for SG Iron’s product crashed about 50% in 5 months which led to SG Iron’s liquidation.
I was not a Director of Eltina Limited. I was not a Shareholder of Eltina Limited. The only shareholder and director of Eltina Limited was Non-Resident Indian/s. I have had no interests in Eltina. So far as I know, Eltina purchased low grade iron-ore from SG Iron and sold it onward into China.
I was not a Director or a Shareholder of Salgaocar Asia Pte Ltd, Singapore. I was not a Shareholder of Salgaocar Asia Pte Ltd. I have had no interests in Salgaocar Asia Pte Ltd, Singapore.”
Ajay Singhvi: “I am a friend of Mr Gautam Radia and had met Mr Shanmuga Rethenam a couple of times since 2011. When the two of them had differences and problems had escalated to a point of breaking in SARL, I was parachuted in to try and help manage the company and resolve the differences. I got involved with SARL in June 2014 and was appointed co-CEO and Director of SARL on June 24, 2014. One of the main reasons for the precarious condition of the company was when Mr Rethenam’s efforts to get Glencore to invest in SARL failed in May/June 2014. Mr Rethenam then introduced me to multiple investors to try and raise funds for the company. In the meantime, in June 2014, Mr Radia had started arbitration proceedings against Mr Rethenam. In addition, Mr Rethenam wanted his “SG” name in the companies so we decided to rename the companies to SG Iron and Southern Africa Resources Limited. I resigned as CEO of SARL on September 4, 2014. On December 8, 2014 I acquired 80% shareholding in SARL from Mr Radia because there were liquidation proceedings going on in Swaziland and I truly believed that SARL would be able to recover some of the money from the liquidation and that would give me a decent return on my investment.
I am in no way related to and/or associated with SAPL and Eltina. SARL had 50% shareholding in SG iron Ore. However, I was never a Director or Shareholder of SG Iron.
I am not at all involved with Eltina. From what I know, Eltina was not involved as a shareholder or in the management of the Swaziland project. SG Iron managed the operations in Swaziland. SARL managed the logistics for iron ore of SG Iron operating from Mozambique, Swaziland and Singapore. As far as I am aware, Mr Darshan Jhaveri, an NRI based out of Hong Kong and Singapore is the owner of Eltina and Eltina had a long-term contract to buy Iron Ore from SARL and SG Iron Ore.
I am not in dispute with these gentlemen as a group (Radia, Rethenam and King of Swaziland). On January 22, 2015 Mr Rethenam had sent a notice of arbitration to bring a claim under ICSID (part of the World Bank Group) to the Kingdom of Swaziland. This was done by Mr Rethenam without a Board meeting and without proper board consent of SARL. At that time, SARL did not have money to pay lawyers. There was no further action taken with regards to this matter, and arbitration proceedings were never instituted.
My dispute with Mr Rethenam was in 2014 in the Seychelles with regards to the constituency of the Board of SARL. However, that matter no longer exists since SARL itself has been struck off by the Financial Services Authority of the Seychelles.
In 2015, the late Mr Anil Salgaocar filed a case in the Seychelles with respect to the validity of the ownership of shares of SARL. However, that matter never progressed any further and in other separate international litigation proceedings where both Mr Rethenam and Mr Radia were involved, Mr Salgaocar’s allegations were rejected.
In early 2015 on behalf of SARL, I had to intervene in a dispute between Mr Rethenam’s SG Air Leasing and the King’s corporate entity Inchatsavane Company (P) Ltd in the Canadian Supreme Court. The issue was with regards to reimbursement of costs to SG Air for refurbishment of an Aircraft (Case File No. CV-14-519022). The reason SARL intervened was because Mr Rethenam had taken money from SARL in his personal capacity and used it towards the refurbishment of the aircraft, and SG Air did not disclose these facts in the Canadian Courts. I had to protect SARL’s interests.
I am a citizen of the United States of America and was living in the USA till I moved back to India in financial year 2009/2010 to take care of my father. My involvement in these matters you discuss started only in June 2014 with the aim to help two friends solve their issues and to try and help salvage SARL and get it back on its feet. Unfortunately, I was not able to salvage the situation and the last shipment of iron ore from Swaziland/Mozambique was in August 2014. In October 2014, the Kingdom of Swaziland appointed a liquidator to liquidate SG Iron and in April 2017, the Financial Services Authority of the Seychelles moved to strike off SARL from the register of companies in Seychelles.”
Niira Radia/ offshore companies in Malta
Radia also figured in the Panama Papers — she had established an offshore firm, Crownmart International Group Limited, in the British Virgin Islands in 1994.
Corporate lobbyist Niira Radia, who was at the centre of a controversy in 2010 over intercepted phone conversations that came to be known as the Radia Tapes and suggested that she used her proximity to some journalists and politicians to try and influence ministerial appointments in UPA II, was part of two offshore companies in Malta.
Malta registry documents investigated by The Indian Express show that Radia was director, legal and judicial representative in Suez La Vallette Limited, incorporated in Malta in April 2012; and Pegasus International Advisors Limited, incorporated in Malta in August 2011.
Radia was “removed” from Suez La Vallette Limited in August 2014 and “resigned” in February 2014 from Pegasus International Advisors Limited. Scrutiny of documents show that the two firms repeatedly changed their names.
Pegasus International Advisors Limited, documents show, changed its name to SLV FG Technopolo Limited in May 2014. Suez La Vallette Limited, incorporated as Pegasus Management Services Limited, changed its name to Suez La Vallette Limited in May 2014. In November 2015, Suez La Vallette Limited again changed its name to Suez Holdings Limited.
The declared “Objects” of Pegasus, according to documents available on Malta registry, are sweeping: “to provide advisory, operational, logistical and consultancy services and assistance to banks, financial institutions, corporate and unincorporated bodies and authorities as well as private persons for the promotion and development of their businesses… to run the business of ship managers and operators, ship owners.”
Paradise Papers, Paradise Papers India, What are paradise papers, paradise papers names, ICIJ investigation, Tax havens, offfshore accounts, Appleby papers, Appleby data hack, indian express investigation, appleby, Radia’s links to Pegasus International Advisors Ltd in Appleby records.
The website of Suez La Vallette Limited states: “We are a Maltese holding company actively involved in Africa and Latin America.”
Incidentally, in March 2014, the Serious Fraud Investigation Office (SFIO) told the Supreme Court that it was going to prosecute Radia’s Vaishnavi Group companies for alleged violation of the Companies Act. The SFIO sought permission from Ministry of Corporate Affairs in February 2014 itself — when Radia “resigned” from Pegasus International Advisors Limited — to prosecute these companies.
Radia also figured in the Panama Papers — she had established an offshore firm, Crownmart International Group Limited, in the British Virgin Islands in 1994.
When contacted, a spokesperson for Niira Radia said: “Following the closure of the communications business, Ms Niira Radia had accepted appointment as a Director in a Maltese company i.e. company registered in Malta, M/s Pegasus International Advisors Ltd. in 2011. This was part of her endeavour to be an emerging market specialist with a network spread across the BRICS countries, Africa and other economies.
“However, due to personal reasons including an acute health condition, Ms Radia was unable to undertake any work or make any contribution to the company. Accordingly she resigned from the company as a Director in 2014. Ms. Radia did not have any financial interests in the aforesaid company and has neither drawn any salary or material benefits during her period of association with the company. The pertinent disclosures in this regard have been made to the relevant authorities. Ms Radia is not associated with M/s Suez La Vallette Ltd in any manner.
Shyam Madanmohan Ruia & Amay Shyam Ruia
Mumbai
The Ruias of Essar have been listed under E/ Essar
Offshore jurisdiction
Malta
The data do not contain the name of the offshore entity, but provide its registration number. Along with four other Indians, Shyam Ruia and Amay Ruia are shown as its Directors, as well as the legal and judicial representatives of the company. Shyam Ruia, 70, is chairman of the BSE-listed Bombay Oxygen Corporation Ltd (BOCL). He has an MA from Cambridge, and was inducted into the board of BOCL in August 1968 as a Director. He is also a Director of several other companies, including Raptakos, Brett and Company Limited, KMR Trading Investment Company Private Limited, M Ramnarain Private Limited, etc.
Amay S Ruia, 30, is Shyam Ruia’s son. Amay is a director at BOCL. He is also chairman of BOCL’s Corporate Social Responsibility Committee, and a member of its audit committee, stakeholders’ committee and risk management committee.
RESPONSE: Shyam Ruia said: “There is no offshore company or entity. Raptakos, Brett is an unlisted company involved in the pharmaceutical and nutraceuticals business for over 70 years. We were registered in accordance with the Companies Act. Raptakos, Brett has a branch office in Malta, opened in 2015 to open avenues for exports to the EU. We have been exporting to various countries in Southeast Asia and Africa for over 30 years. The branch office has been opened with requisite permission from RBI. Raptakos, Brett is owned and managed by the Ruia family.”
S
Sanmar Group
Appleby documents show that after being acquired by Sanmar Group, TCI planned to utilise $70 million from the BNP Paribas loan to acquire a 50 per cent stake in PCL, and another $140 million to fund the repayment of the ICICI Bank loan for the acquisition of TCI.
The BNP Paribas loan did not materialise due to the 2008 global financial meltdown, Appleby records show. (Source: Reuters)
In 2007, Chennai-based chemicals major Sanmar Group acquired Trust Chemicals Industries (TCI) of Egypt through its Cayman Islands subsidiary Pharaoh Chemicals Limited (PCL), which took a loan of $300 million from ICICI Bank for the acquisition, according to Appleby records investigated by The Indian Express.
Records show the Sanmar Group then executed a series of financial restructuring moves through inter-company fund transfers that drastically altered the holding structure of the companies, with the freshly acquired entity — TCI — ending up as a 50 per cent shareholder of PCL, which was the holding company at the outset of the deal.
To execute the restructuring, records show, TCI was to take a loan of $485 million from BNP Paribas in December 2007 for buying a 50 per cent holding in PCL, along with the purpose of repayment of the ICICI Bank loan and an expansion of its business.
The BNP Paribas loan did not materialise due to the 2008 global financial meltdown, Appleby records show, but Sanmar managed to secure loans amounting to $565 million from a consortium of Indian banks at a time when the banking system was practising extreme caution in the wake of the slowdown.
This is testified by a senior functionary in Appleby’s Corporate and Commercial Practice Group, who noted that this was “a landmark transaction” in the prevailing environment and was “the first substantial international project loan” that was wholly financed by Indian banks.
What is more striking is that ICICI Bank — the original lender for the deal — was part of this lending consortium, alongside the State Bank of India, Bank of India and Indian Overseas Bank, among others, show records. Ultimately, in March 2009, the consortium provided a loan of $565 million to TCI in Egypt.
Appleby documents show that after being acquired by Sanmar Group, TCI planned to utilise $70 million from the BNP Paribas loan to acquire a 50 per cent stake in PCL, and another $140 million to fund the repayment of the ICICI Bank loan for the acquisition of TCI. Records show that the Sanmar Group followed the same fund deployment strategy as planned earlier for the BNP Paribas loan: buy stake in PCL, fund PCL to repay the initial loan of $300 million taken from ICICI Bank and use it for its expansion plans.
After the loan from the syndicate of Indian banks got closed in 2009, Simon Raftopoulos, Partner, Corporate and Commercial Practice Group, Appleby wrote in an internal email: “What is significant about this transaction: This transaction is a landmark transaction in the current environment and is the first substantial international project loan which is wholly financed by Indian banks.”
In its plan to repay the $300 million loan taken from ICICI Bank, the group planned a web of inter-company fund transfers and loan repayments — and utilise a part of the loan taken by TCI to fund PCL to repay the ICICI loan.
Appleby documents reveal that PCL, which started out as the holding company of TCI, eventually ended up ceding a 50 per cent shareholding to TCI through the series of transactions. These included transferring shares of a PCL Cayman Islands subsidiary to yet another Cayman Islands company that was a step-down Swiss subsidiary of Sanmar Holdings, the holding company of Sanmar Group.
“TCI will invest $70 million by subscribing to shares of PCL. Further to Pre-closing Steps, PCL is no longer a holding company of TCI. Therefore TCI is not investing in shares of a holding company. Thus at this stage the total capital of PCL will be $140 million held thus 50% by PIL and 50% by TCI. PCL will have USD 300 million which will be used to repay ICICI,” states an Appleby document.
Appleby records examined by The Indian Express show:
One set of funds was used to settle inter-company loans worth double the amount. Documents reveal a complex payment structure where the same chunk of money flowed back into a set of three companies twice over to make it settle inter-company loans worth double that amount. The transaction involved the Group’s three Cayman Islands entities and initial funding of $90 million by their Switzerland-based immediate holding company, CAV-NILE.
In the transaction, the $90 million received by the Cayman Islands-based holding company went to its Cayman subsidiary that was utilised to repay its loan to PCL. From the same money, PCL used $42 million to repay the Cayman Islands holding company to which it owed $60 million. The remaining $18 million ($60mn -$42mn) loan was converted by PCL into equity.
The Cayman Islands-based holding company received $42 million from PCL; it was again advanced to its subsidiary in Cayman Islands to repay PCL. At the end of the transaction, $90 million was used to settle loans amounting to $174 million among the three companies.
RESPONSE
A spokesperson for Sanmar Group responds: The investment structure involving subsidiaries in Switzerland and Cayman Islands to invest in TCI was suggested by our Financial Advisors Bear Stearns, in 2007. This structure was designed from the point of view of raising funds from the US Bond Market. The structure was rather complex, but was wholly held by The Sanmar Group at all levels.
The plans for the Bond issue did not go through with the 2008 meltdown of the US financial markets, which also resulted in Bear Stearns going out of existence. However, by that time the structure had been put in place, and we had no alternative but to continue with it.
We next tried to raise a dollar loan from the European loan markets through BNP Paribas. Unfortunately, by the time BNP Paribas got to the stage of actually placing the loan, the European markets had also melted down, and BNP expressed their inability to put through the transaction. Thereafter, our internal team raised dollar loans from the offshore branches of Indian banks using the documentation that BNP Paribas had developed. The support that the Indian banks gave to the project was invaluable, as all other sources of funding had dried up.
No loan was availed from BNP Paribas.
The total amount of loan taken from Indian banks was $ 565 million. $130 million out of this has since been repaid. We are current on all loan and interest payments.
Incidentally, the complex structure that was originally put in was finally simplified in 2017 with the permission of the Reserve Bank of India through a series of mergers. Today there is only one Swiss wholly owned subsidiary Holding Company between the Indian Company and TCI.
Mili and Sourabh Sen
Kolkata
Jurisdiction
Malta
Astonfield Renewable Resources Ltd was incorporated in Malta in March 2007. In October 2007, Mili Sen, listed as an Indian citizen from Chandannagar in Kolkata’s suburbs, transferred 75 shares to Astonfield Management Ltd (BVI). She transferred another 275 shares to the BVI company in January 2008 and 50 shares to Lalchand Deveshi Shah of Nairobi, Kenya in April 2008.
Sourabh Sen, an Indian living in New York, Ameet Lalchand Shah, a US citizen, and Vimal Shah a British citizen, were appointed directors in April 2008. During 2013-14, Astonfield Renewable Resources Ltd converted a GBP 2 million loan due to Astonfield Management Limited (BVI) into 2000 redeemable preference shares with a nominal value of GBP 1000 each and allotted to Astonfield Management Ltd. For the purpose, the company’s authorised share capital was increased by GBP 3 million. According to Maltese registry records, Renewable Resources Ltd was active at least till June 2016.
Response: US-based Sourabh Sen’s cousin Tamal Sengupta said: “Sourabh’s mother Mili Sen was made the director of the company in 2008. She died in 2012 and after that the company was closed.”
Joydeep Chakraborty, who introduced himself as Sen’s tax consultant, said: “Astonfield is a group of companies. It is an international consortium and Sourabh is not the sole owner of this company. Sourabh’s mother was just a director. She used to pay individual tax and the company was declared in her income tax return. I think RBI authorisation was taken before incorporating the entity but Sourabh will be the best person to answer such queries.”
– For Indian Express, by SANTANU CHOWDHURY, Kolkata
Dr Ashok Seth/ Fortis-Escorts
When contacted, Seth told The Indian Express that he kept the shares of Biosensors for three years and made a profit of Rs 54 lakh on them when he sold them.
IF A bulk of Appleby’s revelations are related to corporates and their offshore dealings, one set of papers highlights a potential conflict-of-interest transaction involving top medical practitioners.
Records investigated by The Indian Express show that in 2004, Dr Ashok Seth, chairman of Fortis-Escorts — honoured with the Padma Bhushan and Padma Shri – was given shares by a Singapore-based company that manufactures stents, before the company went public.
Subsequently, Seth prescribed these stents to his patients and cashed in on these shares.
The company in question is Biosensors International Group Ltd, a Singapore-listed company, which manufactures and markets medical devices for interventional cardiology and critical care procedures.
According to its annual report, Biosensors International Group Ltd was incorporated in Bermuda on May 28, 1998 and was listed on the Singapore Exchange Securities Trading Limited (SGX-ST) on May 20, 2005. The company is not subject to income tax in Bermuda pursuant to tax exemption granted until the year 2035.
When contacted, Seth told The Indian Express that he kept the shares of Biosensors for three years and made a profit of Rs 54 lakh on them when he sold them.
The share offer to Seth and doctors from USA, Germany, Singapore, Japan and Indonesia — at least 13 grants were offered, some in 2007 — are detailed in minutes of meetings of Biosensors Board of Directors
Records of the minutes of the Board meeting dated October 19, 2004, mention that Seth was being offered 5,000 shares of the company “immediately vesting upon issuance” for $90,000.
Subsequently, minutes of a Special General Meeting held on January 28, 2005 show that it was decided that each share would be divided into 50 and, thus, the offer of stocks to Seth increased to 250,000 shares.
Asked about the potential conflict of interest, Seth said he had an offer of purchase of 5,000 shares in October 2004 which he says he did not take up. He, however, admitted that he took up the offer nine years later, in April 2013 and paid the same $90,000 for them.
Evidently, he was able to exercise the stock option in 2013 which had been approved by at the Board meeting of the company in 2004.
Seth told The Indian Express he sold the shares of Biosensors International Group Ltd in April 2016 and thus held them for a period of three years. What is important is that when Biosensors International Group, Ltd was listed on the SGX-ST on May 20, 2005 its share price was US $0.371. And according to stock market data, the price of the company’s share in April 2013 was US $1.23. So the market value of the 250,000 shares was US $247,954 (Rs 1.51 crore at the 2013 exchange rate).
Seth admits this but gives the value of the Biosensors International shares as Rs 1.39 crore. More importantly, he sold the shares in 2016 for “approximately” Rs 1.03 crore (since the price was down) and made a profit of Rs 54 lakh on the purchase. He says he has declared the transactions in his tax returns.
Seth claims that he got the shares because “advancements in technology and better and safer stents for treatment of patients have only happened by combining advanced practical knowledge and expertise of doctors with the bio medical engineers of device companies.”
He said that Biosensors developed an innovative stent named ‘Biomatrix’ which he used to “benefit my complex patients in anywhere between 3-15% of my angioplasty patients upto 2012.”
“During the time I possessed the shares of Biosensors, from April 2013 to August 2013, I used only seven Biomatrix stents. From August 2013 to April 2016, nil Biomatrix stent or Biosensors product was used by me. Neither did I give any lectures related to this product. If required, I declared this shareholding at scientific peer meetings, I also had no role in purchase or pricing of this product at any stage. I did this because even though my shareholding in Biosensors was miniscule and is generally not considered as financial interest in a public limited company, I felt it may be construed as a conflict of interest and hence did not use any Biosensors products when I possessed these shares.
“Throughout my career I have strongly believed, practiced and advocated that the treatment I give to the patients has to be the best evidenced based practices,” Seth said.
Dipesh Rajendra Shah
Mumbai
Overseas jurisdiction
Malta
The Malta data show that since 2011, Dipesh Rajendra Shah has played all key roles in a company called Vista Investment Holdings Limited. He is the Director, shareholder, judicial representative as well as legal representative. Documents show that in April 2011, he converted the company from a Private Limited Company to a Private Exempt Company. In the same year, he acquired all shares of the company and made it a single member company.
RESPONSE: Shah said, “I had incorporated the company in Malta but it has since been wound up. All my taxes are accounted for.” He did not reply to a detailed questionnaire sent by The Indian Express.
— RASHMI RAJPUT, Mumbai
Avaneesh Kemmanu Shivananda & Ravi Pratap Singh Raghav, Bengaluru
Overseas jurisdiction
Malta
The Malta registry data show that Avaneesh Kemmanu Shivananda and Ravi Pratap Singh Raghav, both residents of Bengaluru, are together associated with two offshore companies located in Malta, while Raghav has also incorporated a third.
They hold key positions in a company named Angel Crest Holdings Ltd. They have a total of 26,25,000 shares in the company, and were active in the company until 2015. A resolution was moved to wind up the company in January 2016.
Both Shivananda and Raghav also have 26,25,000 shares each in a second company, Game Village Ltd, an online bingo company registered in Malta. These shares were transferred to them in November 2013. The data show that Shivananda has given his parents’ residence in Bengaluru for the registration details. In August 2015, the company changed its name to Deuce Gaming.
The third company in Malta is named New Fangled Technologies, with Ravi Pratap Singh Raghav as its sole Director. As a cross holding, Angel Crest Holdings Ltd has also been made a shareholder in this company and in January 2016, a resolution was passed to wind up the company.
Avaneesh Kemmanu Shivananda, 37, an MBA from the University of Wales, is a UK-based entrepreneur in the gaming and content areas. He is the founder and CEO of Realbridge e-Marketing Solutions Pvt Ltd in Bengaluru, according to his UK LinkedIn profile.
Ravi Pratap Singh Raghav is the UK-based Director of Kleenco On-demand Services Private Limited, located in Koramangala, Bengaluru. Kleenco’s address is the same as that of Realbridge, the company of which Raghav is the CFO. Raghav is also a founder of RASR Entertainment, AVRA Media, and co-founder of LaundroKart.com.
RESPONSE: When contacted by phone at his Bengaluru office, Ravi Pratap Singh Raghav declined to comment on the nature of the Malta business. “I cannot discuss these business aspects. I cannot comment on what is declared in my tax returns,” he said.— JOHNSON T A, Bengaluru
Sikkim Manipal University/ Ranjan Pai
Records show that between 2002-2003, the company picked up collaterals — listed as four “charges” — worth Rs 87 cr from Indian banks.
Ranjan Ramdas Pai is CEO and MD of Manipal Education and Medical Group (MEMG), which runs six colleges, including four overseas, as well as 16 hospitals.
APPLEBY DOCUMENTS reveal how Indian billionaire Ranjan Ramdas Pai, who runs a network of medical and educational institutions and has an estimated net worth of $1.7 billion, set up off shore entities to raise capital.
Pai is CEO and MD of Manipal Education and Medical Group (MEMG), which runs six colleges, including four overseas, as well as 16 hospitals. He set up MEMG, separating Manipal University and Sikkim Manipal University from the rest of his businesses.
Appleby documents show how MEMG International Ltd, set up by the Bermuda law firm in Mauritius, was the vehicle for Pai to operate a sizeable number of “charges”, or collaterals against assets which he pledged with premier banks in several countries.
Records show that between 2002-2003, the company picked up collaterals — listed as four “charges” — worth Rs 87 crore from Indian banks. Between 2006-2011, records show, MEMG International Ltd got 15 “charges” from foreign banks.
The company’s profile shows that MEMG International Ltd was incorporated in Mauritius in 1998 and became an amalgamated company in 2012 — its original name was Wigmore Worldwide. Both Ranjan Pai and wife Shruti Pai are listed as Directors. While the former was appointed in 2000, Shruti was named Director in 1993.
Appleby records include details of some of the “charges” obtained by the Mauritius entity:
- The first “charge” was taken in February 2002 for Rs 3 crore with the name of the “charge holder” listed as ICICI Bank in Mumbai. The collateral given by the company were deposits of $350,000 face value. This “charge” was released six months later. Incidentally, Appleby has noted how the creation of a subsequent charge was “restricted or prohibited”.
- The second collateral was created in June 2003, for Rs 34 crore. This is described as a credit facility given by Standard Chartered Bank to Manipal Infocom India Pvt Ltd, Bangalore, and the “property charged” are cash deposits of $6 million held by MEMG at Standard Chartered Bank (Mauritius) Ltd with the “charge holder” being Standard Chartered Bank, UAE.
- The following month, a second “charge” was structured for the same amount with “a stand by letter of credit borrowing facility up to $ 8 million”.
- The last “charge” is in Indian currency for Rs 50 crore and the “property charged” is a London debt instrument worth GBP 3.06 million by MEMG pledged with the Standard Chartered Bank (Mauritius).
A 2013 listing of Appleby shows that the two charges obtained in Indian currency with Standard Chartered Bank remain “not released” till that point.
Three years later, the Mauritius company picked up 15 more “charges” from foreign banks over six years. They include:
- In April 2006, the company picked up a fixed “charge” for $15 million from Standard Chartered Bank, London, with fixed deposits in US dollars as the “charge instrument”. Another “charge” with identical conditions was picked up a year later — with the proviso that a subsequent charge was prohibited — and was released in 2010.
- In 2007, the company picked up a mortgage for Singapore dollars 6.6 million with JP Morgan Chase Bank (Singapore) and gave a property located in Singapore as collateral. The “charge” was released in 2011.
- In April 2008, the company picked up a floating “charge” for $45 million from the Wells Fargo Bank Northwest National Association (acting as security agent) — it was renewed four times. The charge instrument, however, kept changing and moved from shares held by the company in various firms — Deccan Tech Park; Cypress Holdings; 4 Ways Limited and MNI Ventures. The 2013 listing shows the securities were not released till then.
- In November 2009, a lien for $2.7 million was picked up from Standard Chartered Bank in London with the “charge instrument” being a fixed deposit account for an equivalent amount with the Mauritius Branch of the same bank. This charge was released a year later.
- In June 2010, a “charge” was registered with DBS Bank Ltd, Singapore, for US$55million. The “charge instrument” was accounts held with the same bank. A second identical “charge” was picked up in October 2010 with shares held by the company in Manipal Health Systems International being pledged. The “charge” was released in 2012.
- In March 2011, UBS AG Bank (Singapore) signed a collateral agreement with the company, pledging a different property located in Singapore. The amount of credit mentioned is Singapore dollars 8.7 million — 2013 documents show the charge was not released till then.
- In August 2012, a fixed charge for $135 million was signed with Standard Chartered Bank (the branch is not mentioned) and the “property charged” was shown as compulsorily convertible debentures. Data show that the creation on subsequent charges for this lien was restricted — 2013 documents show the charge was not released till then.
RESPONSE
Ranjan Ramdas Pai responds: I confirm that I and my wife are associated with Mauritius-based MEMG International Ltd, which was earlier named Wigmore Worldwide.
The “charges” referred by you pertains to security/collateral offered by MEMG International Ltd, for various secured loan facilities availed from foreign banks and Indian (through their overseas subsidiaries/branches) & such secured loans availed were utilised exclusively for expansion (overseas campuses)/investments made outside India.
Investments made by me in MEMG International Ltd, when I was a non-resident from 1996 to 2005, have been disclosed in Income Tax returns filed by me with tax authorities and is fully compliant as per the regulations.
All investments made by MEMG International Limited, into India are declared and necessary approvals have been taken from Reserve Bank of India (acting through authorised dealer), as the case may be.
The loans availed by MEMG International Ltd against charges referred by you, viz DBS Bank, Standard Chartered & Wells Fargo (Security Trustee) have been fully repaid and charges have been discharged. There are certain charges, which are continuing in the records, as the debts availed are under repayment/amortisation, as per facility terms.
Kanpur
Overseas jurisdiction
Malta
Malta registry data for 2015 show that Shiv Ram Singh of Kanpur became a Director of Bapu International Pvt Ltd in December 2014. Four other Indians are listed as Directors along with him. In another Malta company, also listed is Naveen Singh Dewal, also from Kanpur.
Shiv Ram Singh lives in J K Colony in Kanpur’s Jajmau locality. He said he is in the real estate business. Naveen Singh Dewal said he deals with the network marketing firm Amway. He said he had left Kanpur some ten years ago, and now lives with his family in Delhi.
RESPONSE: Shiv Ram Singh said, “I joined the company as Director four years ago. The company was started by three partners around six years ago to export goods to Malta. I paid Rs 7 lakh to one of the partners, Suresh Rana, who had 51 shares in the company, to become a Director. I stopped doing business with Bapu International Pvt Ltd after coming to know that one of the three partners in the firm was arrested in Malta with fake Euros a year ago. The firm still exists but is doing no business at present. I have not resigned from the post of Director,” Shiv Ram Singh said.
He added, “I have not mentioned details about Bapu International Pvt Ltd in my income-tax returns because so far I have not earned any money from the business done through the firm. I have no information that authorisation is needed from RBI for it.”
Naveen Singh Dewal said: “I went to Malta in 2014 and signed a few documents on the advice of a chartered accountant, to become Director in the firm. However, I have so far not received any documents from Malta confirming that I have been made a Director in Bapu International Pvt Ltd.” Dewal said he had not obtained authorisation from the RBI before becoming a Director of the firm. “Bapu International Pvt Ltd was incorporated by three (other) persons, and I have no information whether they took authorization from RBI… I did no business through the firm, so I did not mention it in my income-tax returns.”
– For Indian Express, by MANISH SAHU, Lucknow
Uday Bhan Singh
Jaipur
Overseas jurisdiction
Malta
Uday Bhan Singh works in a company manufacturing incense sticks in Jaipur. The family moved to the city from Unnao in Uttar Pradesh around the year 2000, Uday Bhan Singh’s father Janardhan Singh said. Uday Bhan lives with his parents and younger sister in a small two-storey house on the outskirts of the city. The documents list him as Director, shareholder, judicial representative and legal representative of a company.
RESPONSE: Uday Bhan said he had no knowledge of any company in Malta. The Indian Express was later contacted by an individual who identified himself as Shiv Ram Singh, based in Kanpur, who said Uday and he used to export leather goods overseas through a company called Bapu International, but they had severed those links after a partner was caught in an alleged fake currency scam. Thereafter, Shiv Ram said, “Uday used to work in my company Nirman Exports Pvt Ltd, which we set up about two years ago with the aim of exporting leather goods, such as leather purses, belts, bags, etc.”
Uday, Shiv Ram said, used to look after the company’s marketing, and travelled to Malta on one occasion. However, “Uday hasn’t been working with the company for about a year now, as his visa application was rejected… We still have about Rs 18-20 lakh worth of unsold goods, sent through Bapu International, there (in Malta),” he said. Shiv Ram said no permission was sought from RBI. “I haven’t declared it in Income-Tax returns, but have mentioned it in Sales Tax,” he said.
– For Indian Express, by HAMZA KHAN, Jaipur
Jayant Sinha/ Omidyar
Omidyar Network invested in D.Light Design which took a loan of $3 mn through its Cayman Islands subsidiary. Records show Sinha served as Director of D.Light Design founded in 2006 in San Francisco.
Before he was elected Lok Sabha MP from Hazaribagh in Jharkhand in 2014 and became a Minister of State at the Centre, Jayant Sinha worked with Omidyar Network as its Managing Director in India. Omidyar Network invested in a US company D.Light Design which has a subsidiary in Cayman Islands in the Caribbean Sea.
Records of offshore legal firm Appleby show Sinha served as Director of D.Light Design — he did not mention this in his declaration to the Election Commission when he contested the Lok Sabha polls in 2014, nor to the Lok Sabha Secretariat or the Prime Minister’s Office as a Minister of State in 2016.
D.Light Design Inc was founded in 2006 in San Francisco, California and has a subsidiary of the same name in Cayman Islands. Sinha joined Omidyar Network in September 2009 and resigned in December 2013. Omidyar Network invested in D.Light Design which took a loan of USD 3 million through its Cayman Islands subsidiary from an investor based in the Netherlands – Appleby records mention a loan agreement dated December 31, 2012. Sinha was Director at D.Light Design when these decisions were taken.
In his October 26, 2016 declaration to the PMO, available on the PMO website, Sinha did, however, mention: “The declarant may be entitled to carried interest in certain investments made by Omidyar Network entities in the years 2009 to 2013. The value of the carried interest that may be received by the declarant (if any) is not capable of determination.” A similar line is also mentioned in his March 24, 2014 declaration to the Election Commission with his nomination for the Lok Sabha polls and in his declaration to the Lok Sabha Secretariat as a member of Lok Sabha.
Appleby records document an “Action by Unanimous Written Consent of the Board of Directors of D.Light Design Inc that “adopted and approved” a “resolution” in December 2012 “to procure through its wholly-owned subsidiary D.Light Design (Cayman), a secured loan in the aggregate principal amount of up to USD 3,000,000 from Global Commercial Microfinance Consortium II B.V. consisting of two separate USD 1,500,000 disbursements.” In this document, Jayant Sinha is mentioned as one of six signatories.
Global Commercial Microfinance Consortium II B.V. is a Netherlands-incorporated private limited liability company. It is an investment facility that is seeking to raise $101.25 million in commitments from qualified investors to provide senior and subordinated loans to microfinance institutions globally.
Appleby gave its legal opinion on the loan on December 31, 2012 and, on the same day, issued an invoice of USD 5775.39.for its legal opinion. D.Light Design designs and manufactures high quality consumer products for families without access to reliable electricity. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, Omidyar Network invests in and helps scale innovative organizations to catalyse economic and social change. Omidyar’s Indian investments include Quickr, Akshara Foundation, Anudip Foundation, Aspiring Minds, HealthKart.
Response from MoS Jayant Sinha
I joined Omidyar Network (one of the world’s leading impact investment firms http://www.omidyar.com) in September 2009 as Managing Director of their Indian operations. I resigned in December 2013 to pursue a career in public life.
At Omidyar Network, I was responsible for initiating the firm’s investment in D.Light Design in 2010. D.Light Design is the world’s leading solar power company for off-grid families. Thereafter, I served on the Board of D.Light Design till November 2014. Till December 2013, I was on the Board as Omidyar Network’s representative. From January 2014 till November 2014, I served on the Board as an Independent Director. I resigned as a Board Member when I joined the Union Council of Ministers in November 2014. I am not associated with these companies any longer.
I did not receive any compensation as a D.Light Design Board Member while I was at Omidyar Network because I was serving as Omidyar’s representative. While serving as an Independent Director from January 2014 to November 2014, I received consulting fees as well as shares in D.Light Design. This has been fully disclosed and accounted for in all my tax filings. In my various disclosures for the elections, the Lok Sabha and the Prime Minister’s Office, I have disclosed all my aggregate share holdings.
During the years that I was at Omidyar Network, the firm made a variety of investments including D.Light Design. As a member of the firm during those years, I am entitled to a share of the carried interest in these investments. The actual details of the various investments made during that time is confidential information that can only be disclosed by Omidyar Network. As a Board Member, I was required to sign various financial documents.
Response from Omidyar Network
Jayant Sinha was a partner at Omidyar Network and managing director of Omidyar Network India Advisors. He was employed from January 1, 2010 to December 31,2013. As a matter of practice within the venture capital community and our policy, we do not disclose the details of our for-profit investments. Inquiries regarding D.Light’s operations should be addressed to the company.
Ravindra Kishore Sinha, MP/ SIS Asia Pacific Holdings Ltd (SAPHL)
In an affidavit submitted to the Election Commission during his nomination for the Rajya Sabha election in 2014, Ravindra Kishore Sinha made no mention of his and his wife’s association with SAPHL.
Elected to Rajya Sabha from Bihar in 2014 as a BJP member and considered one of the richest in the House, Ravindra Kishore Sinha, a former journalist who founded the private security service firm SIS or Security and Intelligence Services, heads a group which has two offshore entities.
According to records of the Malta registry, SIS Asia Pacific Holdings Ltd (SAPHL), registered in Malta in 2008, is a subsidiary of SIS. Sinha is listed as a minority shareholder while wife Rita Kishore Sinha is a director of SAPHL. Records show that SIS International Holdings Limited (SIHL), a company incorporated in British Virgin Islands, holds 3,999,999 shares in SAPHL while 1 share is with Ravindra Kishore Sinha.
According to a document dated October 13, 2008, available on the Malta registry, SAPHL’s 1499 ordinary shares of Euro 1 each were transferred from PCL International Holdings Ltd, Malta to SIS International Holdings Ltd, British Virgin Islands. And one ordinary share was transferred by David Marinelli in favour of Ravindra Kishore Sinha. The directors of SAPHL are Malta-based Amicorp Malta Ltd, Amicorp Services Ltd, Ravindra Kishore Sinha and his wife Rita Kishore Sinha. SIHL directors are Sinha, wife Rita Kishore Sinha and son Rituraj Kishore Sinha.
In an affidavit submitted to the Election Commission during his nomination for the Rajya Sabha election in 2014, Ravindra Kishore Sinha made no mention of his and his wife’s association with SAPHL. He did not declare this link to the Rajya Sabha after becoming a member.
But in documents of SIS (India) Limited filed before the Securities and Exchange Board of India (SEBI) on August 4, 2017 – that’s the date mentioned on the final offer document on the SEBI website – Ravindra Kishore Sinha declared his interests in all these companies. The addresses of Sinha (East of Kailash, New Delhi; and Omaxe Forest, Sector-92, NOIDA) and his wife (East of Kailash, New Delhi) at the Malta registry are the same as mentioned in his declaration before the Election Commission.
In the draft red herring prospectus of SIS India Ltd – the DRHP is a preliminary prospectus, a document submitted by a company as part of a public offering of securities – Ravindra Kishore Sinha declared that the SIHL is a “holding company for our international operations”. It was stated that the SAPHL is “currently the holding company of SAHL (SIS Australia Holdings Pty Limited)”. SIS (India) Limited was listed at the Bombay Stock Exchange on August 10, 2017.
The DRHP of the SIS (India) Limited stated: “A decision from the RBI (on multi-layered structures of overseas investments) is currently pending. Given that our holding of our Australian subsidiaries is structured in multiple layers (through intermediate companies incorporated in the British Virgin Islands, Malta and Australia), any adverse decision by the RBI in relation to multi-layered overseas investment structure may require us to re-examine or restructuring our holdings, and may adversely affect our cash flow, dividend income, results of operation and financial condition.”
Response from Ravindra Kishore Sinha:
These companies are indirect 100% subsidiaries of Security and Intelligence Services (India) Limited in which I am a shareholder. I have no direct interest in these companies except to the extent of my shareholding in Security and Intelligence Services (India) Limited. As these companies are indirect subsidiaries of Security and Intelligence Services (India) Limited, I am also a director in these entities. Due to the prevailing regulation in these countries, which require any company to have at least two shareholders, I hold 1 share each in these companies for which the beneficial interest has been declared in favour of Security and Intelligence Services (India) Limited and SIS International Holdings Limited, the 100% shareholders of SIS International Holdings Limited and SIS Asia Pacific Holdings Ltd respectively. These matters have been fully disclosed in the various filings with SEBI as a part of the IPO of Security and Intelligence Services (India) Limited.
Security and Intelligence Services (India) Limited has a wholly owned subsidiary in Australia, by the name of MSS Security, which is the largest security services company in Australia carrying on a legitimate and reputed business there. We also have several operating businesses in India, incorporated and registered in India, which are market leaders in their own right. These subsidiaries in British Virgin Islands and Malta are the holding companies for the SIS Group’s Australian businesses, all of which are 100% owned by Security and Intelligence Services (India) Limited.
All disclosures required to be made in my personal income tax returns, in respect of my assets, have been made. As mentioned, I have no direct interest in these companies except to the extent of my shareholding in Security and Intelligence Services (India) Limited, which is the holding company for these above named companies.
All necessary permissions and consents required to incorporate these companies in their respective jurisdictions have been obtained. Security and Intelligence Services (India) Limited and its subsidiaries and associate companies have been recently subjected to a rigorous due diligence exercise by three reputed law firms and several reputed merchant bankers as part of its recent IPO and no non-compliance, in respect of permissions and consents required to incorporate these companies, has been noted by any of them as part of their diligence. Security and Intelligence Services (India) Limited and its subsidiaries and associate companies have also been subjected more than once in the past to a rigorous due diligence exercise by reputed law firms and Big 4 accounting firms as part of the private equity investments in Security and Intelligence Services (India) Limited and no non-compliance has been noted during those rounds too insofar as the incorporation of these companies is concerned.
All disclosures required to be made in the affidavit submitted with my nomination for Rajya Sabha elections in 2014 and in my periodic declaration of assets and liabilities in Rajya Sabha as a member of that House have been made. As mentioned, I have no direct interest in these companies except to the extent of my shareholding in Security and Intelligence Services (India) Limited, which is the holding company for these above named companies. Since the 1 share that I hold in these companies is only beneficially held by me on behalf of the respective 100% holding companies, and not in my personal capacity, these have not been declared separately. However, you would note that I have fully declared and disclosed my shareholding in Security and Intelligence Services (India) Limited, which is the 100% holding company for these above-named companies.
It is true that the directors of SIS International Holdings Limited are:
- Ravindra Kishore Sinha, by virtue of my capacity as promoter, Chairman-cum-Managing Director and significant shareholder of Security and Intelligence Services (India) Limited. * Rita Kishore Sinha, by virtue of her capacity as a long standing director of Security and Intelligence Services (India) Limited. * Rituraj Kishore Sinha, by virtue of his capacity as promoter and managing director of Security and Intelligence Services (India) Limited.
All of these directors are representing Security and Intelligence Services (India) Limited and to protect its interests as a 100% shareholder of SIS International Holdings Limited.
Sun Group/ Appleby's second-largest client
While Nand Lal Khemka is shown as beneficiary or “officer” for 17 of these entities, one of his sons Shiv Vikram is shown as the “officer” of 104 entities and another, Uday Harsh Khemka, the “officer” for 102 offshore entities.
The Indian business family with the largest number of offshore entities in Appleby records are the Khemkas of the SUN group — with their firms having major interests in Russia, principally in the mining, aerospace and infrastructure sectors. Records investigated by The Indian Express show that the family, led by Nand Lal Khemka, has registered nearly 100 entities mostly in the British Virgin Islands and New Jersey.
While Nand Lal Khemka is shown as beneficiary or “officer” for 17 of these entities, one of his sons Shiv Vikram is shown as the “officer” of 104 entities and another, Uday Harsh Khemka, the “officer” for 102 offshore entities. Appleby has listed Khemka, along with his two sons and their flagship foundation — The Nand and Jeet Khemka Foundation — as PEPs (Politically Exposed Persons).
In the PEP lists, Nand Lal Khemka, married to Jeet, is described as a “diplomat” since he was former Consul General for Jamaica and Iceland in India. Records show that the Nand and Jeet Foundation has its registered address in St Heller, Jersey, and the Appleby Trust, with five accounts in Barclays Private Clients International Limited Bank and Deutsche Bank, is listed in Jersey.
The beneficiaries of the Foundation are listed as Hope Charitable Trust; the Prince of Wales Business Leaders Forum; Charities Aid Foundation of India; the PKC Charitable Trust, registered in Bermuda, and, through it, Berkeleys Philanthropies Limited. Nand Lal Khemka is listed as having an address in Switzerland and shown to be linked with many Appleby entities including: SUN Energy (international) Limited; SUN Energy Resources Limited; SUN Securities Limited; SUN Trade (International) Limited; Tactitus Limited; The Angus Trust; The Ashoka Trust; the Chekov Unit Trust; the Dallila Trust; the Thyra Moller Trust; the PKC Charitable Trust and, the Nand and Jeet Khemka Foundation.
Records of “risk rating” lists show that Appleby mentioned the reasons why the Khemka family has been assessed as “high risk” or “medium risk” among its clients, at least until 2014. At a meeting in March 2009, many objections or observations were made by Appleby related to as many as 47 entries for Nand Lal Khemka and his entities.
In one, for instance, there is an entry of how Nand Lal Khemka has “the potential of purchasing a yacht”. Other key findings, from records examined by The Indian Express, are: A GBP (British Pounds) 600,000 “distribution” to University of Pennsylvania from the Foundation with a request from Appleby for Nand Lal Khemka and the representative of the Trust to provide a “detailed report” on how the funds are used.
“Distribution” of an undisclosed sum to University of Cambridge which is referred to Appleby’s compliance Department for verification.
A 2007 remittance of $18 million to Nand Lal Khemka for purchase of a property in India. Appleby states that it needs valuation reports, reports from lawyers and copies of the tax advice — a noting states that this remittance should be listed in the “exception register”.
A separate compliance report mentions the purchase of apartments in Qatar with a clarification that the purchase was done from personal funds of the family.
A GBP 53,439 donation by Nand and Jeet Foundation to the Climate Group in 2007. Donations made to the Earth Love Movement Foundation. There is mention of a final $50,000 payment through an escrow account — Appleby states that this is not a typical “donation” but an expense — and the Wharton Global Alumni Forum.
A transfer of GBP 12.5 million to Nand Lal Khemka Khemka from the Dallila Unit Trust and Dallila Limited.
A query regarding the transfer of EUR 2.4 million for the “purchase of art”. Appleby officials are asked to contact the art company and confirm the price. One Appleby note states that the seller has confirmed the sale of art and amount but another note later says the amount invoiced was incorrect and adds that the seller mentioned that the exact amount depends on the profit eventually made.
The Foundation made a donation of $754, 519 to the Teachers College of Columbia University.
One of the few donations related to an Indian organisation by the Nand and Jeet Foundation is a $4.34 million payment given to the Public Health Foundation of India (PHFI) with a note to determine who is the controller of the charity. Later, a note states that this payment was not made and would not be made from this “structure.”
Two donations totalling GBP 500,000 made by the Foundation to the Moscow School of Management.
While several companies incorporated by the Khemkas with Appleby go back many years, it is evident the relationship is still active. On March 3, 2015, Appleby wrote a letter to Nand Lal Khemka at his address in Switzerland asking him to sign a revised format of appointment for all companies in which he was a director.
There are also payment reminders sent by Appleby to the SUN Capital Partner Group and the Nand and Jeet Foundation. One reminder dated December 15, 2015 lists 13 overdue payments with a total amount of GBP 65,800 due to Appleby. The note sent with Appleby’s catalogue of invoices states that several previous reminders have been sent and that interest on all pending payments will be added.
The Khemkas are known to maintain a low profile. Nand Lal Khemka, 82, still serves as chairman of Indag Rubber Limited and is a partner at SUN Capital Partners. He is considered to have laid the foundation of all operations with the Former Soviet Union (FSU) in 1958. In every company profile, the business relationship between the Khemkas and the FSU is emphasised. The SUN Group is stated to be a principal investor and private equity fund manager in Russia/ FSU in the energy/mining and real estate sectors.
Indag Rubber, a company listed in India has a market capitalisation of over Rs 550 crore. The company clocked a revenue of Rs 183.9 crore in the year ended March 2017 as against a revenue of Rs 253 crore in the previous year. The Nand and Jeet Foundation is located in Saket in New Delhi with Uday Nabha Khemka, Vice Chairman of the Sun Group, listed as Managing Trustee of the Family’s charitable trusts. The Foundation’s focus areas are described as social entrepreneurship; leadership and ethics; climate change and governance & accountability.
Response from Nand Lal Khemka:
“My sons Shiv and Uday have been NRIs for over 35 years. SUN Group is a private investment group which was founded by them over 30 years ago and has been working across the globe since that time. SUN has made many separate investments using specific corporate vehicles over these years. As a global group owned by shareholders who have been NRIs since well before incorporation of the group, the question of RBI permissions, etc., with respect to the establishment and jurisdiction of the group does not arise.
“I have also been an NRI for many years and we follow and comply with all related laws and required disclosures, including paying our taxes in countries where we operate. For clarification and accuracy, The Nand and Jeet Khemka Foundation has indeed been a supporter of philanthropic causes according to its charter, but is in no way whatsoever involved in the purchase of properties and art. Any such purchases have been made with personal funds.”
Sun Group: II
Low-key group 2nd-largest client of Bermuda firm, Nov 07 2017: The Times of India
Nand Lal Khemka is the founder of the Khemka Group (now referred to as Sun Group), which is mentioned in the Paradise Papers as Bermuda-based firm Appleby's second-largest client.The group has, since 1958, been involved in developing and managing trade between India and the former Soviet Union (and after the split, the countries that came out of it) and Europe.
The trade involved especially the supply of heavy capital goods for mining, power generation, oil, gas, transportation and the metallurgical industries, according to news agency Bloomberg.
Nand Lal is also a partner at investment group Sun Capital Partners. He is said to have also promoted industrial joint ventures in the tyre, rubber and finance sectors. The group also has significant investments in renewable energy .
Earlier in 2017, the group established a joint venture with the Bengaluru-based Mainis, who had founded the Reva electric car. The project, called Sun Mobility, aims to reduce the overall cost of buying an electric car by offering the car battery on a pay-as-yougo model. Khemka is originally from Kolkata, where his father Rameshwar Lal Khemka is said to have migrated to from Kahalgaon in Bihar.
Nand Lal joined the World Economic Forum's Foreign Business Leaders' Council for Russia, chaired by the Russian prime minister, in 1997, says Bloomberg. He also served as an honorary consul general of Iceland in India.
Pavitar Singh Uppal
Jalandhar
Offshore jurisdiction
Dominica
Pavitar Singh Uppal, described in the documents as a “real estate developer” residing in Jalandhar, registered an offshore entity in August 2016. The company, Silverline Estate Limited, was incorporated in the Commonwealth of Dominica. The incorporation documents show the company was registered on August 8, 2016 as a “profit” company, with only Uppal as Director.
RESPONSE: Speaking over phone, Uppal said the company belongs to his brother-in-law who lives in Dominica, but declined to give his name. “He is a well known person in Dominica and has been appointed as a high-ranking diplomat,” Uppal said. Asked why he had allowed his name and address to be used, Uppal said he would respond later, but did not. His house in Jalandhar’s Urban Estate, Phase 2, was locked.
— ANJU AGNIHOTRI CHABA, Jalandhar
Videocon Group
On December 28, 2012, VHHL sold the VMRL shares for an “unrealised profit” of $2141.15 million to its wholly owned subsidiary VMEL and pledged the shares of VMEL to SCB.
Videocon Oil Ventures Ltd is the sole shareholder of VHHL, a Cayman company set up in 2009.
Even as it finalised a deal to sell its oil assets in Mozambique to ONGC Videsh Ltd and Oil India Ltd in 2013, the Videocon Group sought to play down its debt exposure on paper and did not document inter-group loans provided by its flagship firm Videocon Industries Ltd to its step-down subsidiary Videocon Mozambique Rovuma 1 Ltd (VMRL) — despite red flags on regulatory compliance raised by offshore legal firm Appleby.
Appleby records show that Videocon was “hesitant to refer to the secured amount being US$880m or $856m” while upsizing a loan from the Standard Chartered Bank (SCB) in June 2013 and the “parties agreed in principle that they will refer to the current outstanding ($306m) plus interests, costs etc”.
Records show that the group insisted that loans provided by Videocon Industries Ltd’s subsidiary Videocon Mauritius Energy Ltd to its subsidiary VMRL would “only be evidenced by book entries (the loan is essentially being transferred from one intercompany loan provider to Videocon Mauritius Energy Ltd and the books will reflect this) and that no formal loan document will be available.”
Appleby, however, cautioned that “the above practice by a Mauritian entity is not good practice and may give rise to transactions that ‘lack substance’ from a Mauritius corporate, tax and accounting perspective which may create issues for the company vis a vis the regulators and other local authorities alike in case the above practice is queried”.
Accordingly, Appleby advised that Videocon should document any shareholder loan “not only as best practice but more importantly to ensure it is compliant with applicable laws”.
In response, Singapore’s Baker & McKenzie.Wong & Leow, a member firm of Baker & McKenzie International, wrote on behalf of the bank, which was to secure the loan: “We are discussing the VMRL loan documentation with Videocon — as a minimum we are requesting that VMRL provide a promissory note evidencing the debt.”
Under a 2010 master agreement between Venus Corporation Limited, a Videocon subsidiary incorporated in Cayman Islands, and SCB as the facility hedging bank, another Cayman subsidiary Videocon Hydrocarbon Holdings Limited (VHHL) signed an $800 million facility agreement in March 2011 by pledging, among other securities, the shares of VMRL, show Appleby records.
On December 28, 2012, VHHL sold the VMRL shares for an “unrealised profit” of $2141.15 million to its wholly owned subsidiary VMEL and pledged the shares of VMEL to SCB. Between March 2011 and May 2013, the VHHL facility agreement was amended and upsized at least eight times. Subsequently, Videocon sought to amend the fixed and floating charges over the pledged shares of VMRL to secure shareholder loans granted by VMEL to VMRL.
On 17 June, 2013, Baker & McKenzie.Wong & Leow informed Appleby in an email that SCB was discussing a proposal to “potentially” extend the maturity date for the SCB-VHHL facility from June 28 to September 30 that year.
“There may be an upsize of the Facility for the Mozambique cash calls (as was the case with the previous US$56 million upsize) — this has not been confirmed yet and SCB will come back on this,” the email stated.
On June 25, 2013, Videocon inked the deal to sell the entire stake held in Videocon Mozambique Rovuma 1 Ltd by VHHL through its wholly-owned subsidiary VMEL to ONGC Videsh Ltd and Oil India Ltd.
In December 2008, Videocon acquired 10% participating interest in Rovuma Offshore Area 1 Block in Mozambique from Anadarko Petroleum Corporation, USA, through BVI-incorporated VMRL (formerly Videocon Energy Resources Ltd).
Videocon’s board had approved splitting and selling its oil and gas assets in August 2012. Standard Chartered Plc was appointed an advisor for the sale, which was wrapped up with the payment of $2.475 billion in January 2014.
Incorporated in Cayman Islands in 2005, Venus Corporation Ltd (VCL) was a wholly owned subsidiary of Videocon Industries Ltd (VIL) till November 2009 after which VIL retained 19% interest in VCL.
Videocon Oil Ventures Ltd is the sole shareholder of VHHL, a Cayman company set up in 2009. According to its website, VHHL through its various subsidiaries and affiliates holds interest in various international oil and gas concessions in Brazil, Indonesia and East Timor.
RESPONSE
Videocon Group’s chairman Venugopal N Dhoot and director Anirudh V Dhoot did not respond to emails, messages and phone calls from The Indian Express seeking comment.
Yale University: entering India via Mauritius
Appleby documents reveal that Yale University entered into an agreement with the Bermuda law firm to invest in India. These investments were to be made through Singapore-based Nalanda India Equity Fund and other avenues.
Ivy league school Yale University entered into a pact with offshore legal firm Appleby to invest $100 million in India from June 2013 via the Mauritius route.
Appleby records show that Yale University’s Assistant General Counsel Stephanie Chan and Appleby’s Malcolm Moller signed an agreement for legal help on May 15, 2013.
Yale has entered into agreements with several Indian institutions, including Jawaharlal Nehru University, University of Delhi, Ashoka University and The Energy and Resources Institute (TERI).
Appleby documents reveal that Yale University entered into an agreement with the Bermuda law firm to invest in India. These investments were to be made through Singapore-based Nalanda India Equity Fund, Hong Kong and Mumbai-based Steadview Capital Management and the specially formed LTR Focus Fund, a Yale-only vehicle domiciled in Mauritius, to invest alongside the Mauritius investment vehicle used by the master fund…
The Nalanda India Equity Fund Ltd is a fund of Nalanda Capital, a Singapore-based private equity firm, which invests exclusively in small to mid-cap companies in India. There is no information available in the Appleby databse on where any investments were made following the agreement.
Records show that Yale’s Stephanie Chan wrote to Appleby’s Malcolm Moller on May 2, 2013: “It has been a few weeks since we last corresponded about Mauritius law matters for the Nalanda India Equity Fund transaction. I greatly appreciated your responsiveness and guidance with those issues, and am writing now to enquire as to whether you would be available to assist Yale with another transaction involving an investment into India through a Mauritius domiciled entity. The fund sponsor is Steadview Capital, a manager that Yale is engaging for the first time.”
On May 10, 2013, Chan again wrote to Moller, suggesting an amendment requesting confidentiality in the draft agreement. “I note that it contains a blanket consent to your use of our name and disclosure of the details of the transactions on which you have served us. We would prefer if this consent could be given on a case by case basis after we have been provided with details of the exact disclosure to be made and the recipient of the information. In particular, the blanket consent runs up against the Yale Investments Office’s desire to keep the University’s investments confidential. Since most, if not all, of the matters we will engage you on will relate to the University’s investments, such disclosures could be problematic.”
Chan also detailed proposed investments through Steadview: “Yale will be investing for the first time with Steadview Capital Management, an India public equities-focused manager with offices in Hong Kong and Mumbai. We are hoping to fund $30 million on June 1st, and to add to that commitment in tranches over the coming year, for a total $100 million commitment… Rather than invest in Steadview’s co-mingled master/feeder structure, we will be forming a Yale-only vehicle domiciled in Mauritius that will invest alongside the Mauritius investment vehicle used by the master fund. The Yale-only entity will be called the LTR Focus Fund and will be formed as a multi-class vehicle that will issue only one class of non-voting shares. These shares will be held by Yale University. While we have invested in Mauritius vehicles before, they have always been co-mingled vehicles. This will be our first experience with a Yale-only Mauritius entity.”
Chan’s email indicated that Yale authorities were in the process of applying for a license to SEBI as a sub-account of an FII, with the goal of being ready to trade by June 1. “Since SEBI requires a signed subscription agreement and a minimum investment of $100K to process the application, we submitted these materials and wired these funds today…,” the email stated.
In Appleby records, is a Private Placement Memorandum (PPM) regarding LTR Focus Fund dated June 1, 2013: “The Fund will obtain a tax residency certificate from the Mauritius Revenue Authority and hence, subject to fulfilling the requirements under the Indian Income Tax Act, 1961 and other applicable laws, should be able to avail of the benefit of the India-Mauritius Double Tax Avoidance Treaty (Mauritius Treaty), and other treaties as appropriate. As a Mauritian tax resident, the Fund under the Mauritius Treaty ought to be entitled to receive from India, distribution proceeds from the disposal of Indian securities without being subject to payment of any capital gains tax in India…The key advantage of the application of the Mauritius Treaty to the Fund is that no Indian or Mauritian tax will be imposed on any gain recognized by the Company upon the sale of its equity interests in the Indian companies…”
Responding to a questionnaire from The Indian Express, Tom Conroy, Director, Office of Public Affairs and Communications, Yale University, stated: “Beyond its own publications, the university does not share information about investments.”
Ziqitza (Rajasthan ambulance scam): Gehlot, Pilot, Karti, Ravi
Former CM Ashok Gehlot, Sachin Pilot and Karti Chidambaram are named in the complaint. Global Medical Response of India Limited invested $2.08 million in Ziqitza under CBI, ED probe.
Global Medical Response of India Limited, which mention these investments made in Ziqitza.
A company registered by Appleby in tax haven Mauritius invested in an Indian firm that is at the heart of a probe by CBI and ED into what is called the Rajasthan Ambulance scam. One of the founders of the firm is the son of Congress leader and former Union minister Vayalar Ravi.
Global Medical Response of India Limited was registered in Mauritius on March 26 2008 by Appleby and classified as “high risk profile”. Reason: The company, earlier called Radec X Ltd, invested in Indian firm Ziqitza Health Care Limited which is under scrutiny of investigative agencies. Ziqitza provides ambulance services.
There are several prominent politicians named in the complaint, which was first filed by the Rajasthan police in 2014, immediately after the BJP returned to power in the state, and later by the CBI in 2015. They are: former Rajasthan chief minister Ashok Gehlot; Karti Chidambaram, son of former finance minister P Chidambaram; former Union minister Sachin Pilot; and, Ravi Krishna, son of former Union minister Vayalar Ravi, who is also one of the founders of the company.
Records of the Registrar of Companies show that for the financial year ending March 31, 2016, among others, Ravi Krishna remains listed as an equity shareholder. In April this year, the ED attached properties worth Rs 12 crore in connection with the scam in which the CBI alleged that the company had made illegal gains of Rs 23 crore between the years 2010 and 2013.
The allegations made by the agencies are that tenders for the contracts given under the NRHM (National Rural Health Mission) were tweaked to favour Ziqitza Health Care Limited and of subsequently generating fictitious claims and invoices, and of making claims on behalf of non-operated ambulances and faking multiple trips.
The ED charged the company with provisions of the Prevention of Money Laundering Act (PMLA). Appleby’s internal documents show, the Financial Services Commission (FSC) of Mauritius, on September 17, 2015, red-flagged this probe.
This is also echoed in a 2016 Compliance Review Report by Appleby which contains a flowchart of the antecedents of the company. It shows that the company was originally incorporated in 2008 as RADEC X Ltd and, in 2010, the name was changed to Global Medical Response of India Limited. The company is ultimately owned by Envision Healthcare Holdings Inc, listed on the New York Stock Exchange. The Compliance report notes how ED traced the investment pattern in Ziqitza and that among the companies that invested in it through equity and preference share purchases are Grand Global Impex of Singapore; Acumen Fund Inc of US and, finally, Global Medical Response of India Ltd of Mauritius.
Says Appleby’s memo dated January 27, 2016: “The hits (negative searches) relate to the scam involving the Company’s investee company Ziqitza Health Care Limited. Contracts awarded to the investee company are said to have been politically favored. The risk profile of the company has been raised to High and added to our Risky Client Register for frequent checks…”
There are several documents and minutes of meetings held by shareholders of Global Medical Response of India Limited, which mention these investments made in Ziqitza. Records show that a sum of $2.09 million was invested by Global Medical Response of India in Ziqitza Healthcare Limited as 1,000 ordinary shares (0.3% shareholding) and 43,184 Series B Preference shares (61.7% shareholding of Ziqitza Healthcare Limited). But in documents filed with Appleby, this payment of $2.09 million is shown as “loan” payable to Global Medical Response Inc.
After the CBI action, both Karti Chidambaram and Sachin Pilot distanced themselves from the deal. Karti Chidambaram told The Indian Express: “I was briefly a Non Executive Independent Director with the company and have never been a share holder. And as far as I know Ziqitza Health Care never had any off shore operations. A company with off shore operations may have invested in them.”
For his part, Sachin Pilot said that once the company changed its status from a “non-profit” venture to a “for-profit” venture, he resigned from it and did so before he became a Member of Parliament in 2004. He said: “For under a year I was a Honorary Director with the company. This was in 2001. When they informed me that they have become a for profit company I resigned. I have never held a share in it, held a board meeting or signed any papers.”
Response from Ravi Krishna
We at Ziqitza Heath Care look at Global Medical Response (GMR) as out strategic investor and yes, they set up GMR India, a separate company in Mauritius. They simply bought a company of-the-shelf and changed its name to GMR India. After all, any company would look at the most efficient way of allocating its resources.
The fact that we have a strategic investor in the Mauritius based company was disclosed by Ziqitza Health Care to the Reserve Bank of India and all banking details and details of RBI permits have subsequently been given by us to the Central Bureau of Investigation (CBI) and later, the Enforcement Directorate (ED). All the cases took off when the Government changed and in August 2015, the case went to CBI. The ED action came a month later but my point is: since we have done no wrong, how long will they prosecute us? No charge sheets have been filed and in fact, no one has even been questioned by the ED as yet.
As far as the links of other politicians with Ziqitza Health Care is concerned, both Sachin Pilot and Karti Chidambaram were only independent directors in the company, never shareholders. In fact, Sachin Pilot was associated with the company for only a few months. I myself started with a 25% stake in the company. This later reduced to 11% and now it is only 2% but this is due to personal reasons and a family division of assets.
GMR of India Limited, Mauritius is a 100% subsidiary of GMR Inc (Global Medical Response Inc; http://www.gmr.net/), the global arm of AMR Inc (American Medical Response Inc; http://www.amr.net/home/ national), world’s and US’s Largest Ambulance Service Company. They are still part of Envision Health Care Inc (EVHC; http://www.evhc.net/), a New York Stock Exchange company and part of S&P500 with today’s market cap of USD 3.29 billion. Kindly note that a public announcement of the sale of AMR (American Medical Response Inc) Division to KKR has been made by EVHC on August 8, 2017. We do not have any details of this deal except from the media and await the AMR / GMR management to brief us in the next board meeting. Pls see the relevant media releases:
http://media.kkr.com/media/ media_releasedetail.cfm? releaseid=1036413
http://www.reuters.com/ article/us-envision-hlthcr-m- a-kkr/envision-to-sell- ambulance-business-to-kkr-in- 2-4-billion-deal-idUSKBN1AO14E
GMR Inc connected with ZHL in 2008/09 since when they started following us. Post a due diligence in 2009/10, they invested USD 2.00 million in Series B Fund Raise of ZHL. They chose to invest through a Mauritius subsidiary for reasons best known to them. We had no say, no recommendation or no guidance to them in this regard. The name of the entity which was bringing in the investment was RADEC X Ltd, Mauritius but the name of this entity was changed to GMR of India Limited on 26 March, 2010 itself (though we are given to understand that it seems to have taken several more days / weeks for all paperwork in this regard to be completed by them in Mauritius).
See also
Indian money in offshore entities: The Panama Papers
Indian money in offshore entities: The Pandora Papers
Indian money in offshore entities: The ‘Paradise Papers’
Indian money in HSBC, Switzerland
Indian money in Liechtenstein banks
