Facing heat from investigative agencies, several rich Indians have set up offshore entities in countries which have loose tax regulations but tight secrecy laws, in order to evade tax evasion in India, The Pandora Papers Expose by The Indian Express reveals. The Pandora Papers are 11.9 million leaked files from 14 global corporate firms which set up about 29,000 off-the-shelf companies and private trusts in not just obscure tax jurisdictions but also countries such as Singapore, New Zealand, and the United States, for clients across the world.
These documents relate to the ultimate ownership of assets ‘settled’ (or placed) in private offshore trusts and the investments including cash, shareholding, and real estate properties, held by the offshore entities. There are at least 380 persons of Indian nationality in the Pandora Papers. Of these, The Indian Express has so far verified and corroborated documents related to about 60 prominent individuals and companies.
The Pandora Papers reveal how offshore entity owners, even in India, found ways to deal with the post-Panama Papers scenario in which tax department in India detected undeclared foreign and domestic assets to the tune of Rs 20,000 crore.
For instance, Indian cricket legend Sachin Tendulkar asked for the liquidation of his entity in the British Virgin Islands just three months after the Panama Papers expose. Another name in the last is Bollywood actor Jackie Shroff was the prime beneficiary of a trust set up in New Zealand by his mother-in-law. He also made “substantial contributions” to this trust, which had a Swiss bank account and owned an offshore company registered in the British Virgin Islands, records show.
Obtained by the International Consortium of Investigative Journalists (ICIJ) a year ago, The Pandora Papers leak reveals how individuals and businesses, many already under the scanner, are pushing the envelope to evade detection, using loopholes in the law at home and the lax jurisdiction of tax havens.
The investigation by The Indian Express reveals how Anil Ambani owned 18 asset-holding offshore companies while declaring bankruptcy in a UK court. It also found how fugitive Nirav Modi’s sister set up a trust just one month before he fled India and Bitcoin promoter Kiran Mazumder Shaw’s husband set up a trust with keys to a person banned by Sebi for insider trading.
The investigation also brings to light how economic offenders or those under the scanner of tax sleuths, including several Indians, have created an offshore network in tax havens like Samoa, Belize or the Cook Islands, besides larger tax havens like the British Virgin Islands or Panama.
The leaks include a long list of Indian offenders who are currently under the scanner of agencies like the Central Bureau of Investigation, the Enforcement Directorate, and the Serious Fraud Investigation Office.
The revelation also includes PEPs or Politically Exposed Persons, which include Members of Parliament and those who have held public offices in India.
The Panama and Paradise Papers dealt largely with offshore entities set up by individuals and corporates respectively. The Pandora Papers investigation shows how businesses have created a new normal after countries have been forced to tighten the screws on such offshore entities with rising concerns of money laundering, terrorism funding, and tax evasion.