Paradise Papers: In biggest financial data leak ever, names of corporates, individuals revealed; here’re 15 things to know!

By: |
New Delhi | Published: November 6, 2017 2:33:51 PM

Paradise Papers: Here is a quick look at those who find a mention in the documents as well as their reactions.

Paradise papers, paradise paper investigation, Paradise papers investigation indian express, indian express investigation on paradise papers, Suddeutsche Zeitung, ICIJ, panama papers, big names in paradise papersGerman newspaper Suddeutsche Zeitung obtained both sets of data and this was probed by the ICIJ working in partnership with 96 newsgroups. (Image: Indian Express)

In biggest financial data leak ever, Indian Express in association with International Consortium of Investigative Journalists (ICIJ) working in partnership with 96 news organisations, has investigated the documents of two firms – Bermuda’s Appleby and Singapore’s Asiaciti. The two firms allegedly helped the global rich and powerful, including from India, to stash their money abroad in 19 tax havens across the world. Named as ‘Paradise Papers’, the cache consists of as many as 13.4 million documents. Here is a quick look at those who find a mention in the documents as well as their reactions:

Why Paradise Papers matter?

Paradise Papers is another mega financial leak report like the three other major global financial leaks in the past – Offshore Leaks (2013), Swiss Leaks (2015) and Panama Papers (2016) – all investigated by The Indian Express. Unlike the previous leaks, this time the revelations are more about mega corporates than individual players and how they reportedly took advantage of and, in many cases, allegedly misused offshore jurisdictions.

What do Paradise Papers show?

The documents expose offshore accounts linked to some of India’s major corporate players and high profile individuals. It shows the large-scale incorporation of overseas shell companies to achieve various goals. Some of the internal communications reveal how a majority of these companies with offshore residency were wholly controlled from India.

In some of the cases, Appleby, the company itself red-flagged round-tripping of funds meant for investing in India. Certain instances show how assets of Indian companies were used to guarantee loans raised by offshore companies without disclosing it to Indian regulators. Changing ownership of offshore companies to actually change the ownership of shares held by them in Indian companies without paying taxes in India turns out to be another common malpractice.

1. Vijay Mallya link: Businessman may have to answer more – how did Diageo waive $1.5-billion debt?

Already wanted by Indian agencies for a whopping debt default and alleged financial irregularities, Vijay Mallya may have some more explaining to do after the latest revelations in Paradise Papers. These show that after Mallya sold his United Spirits Limited India (USL) company to Diageo group in 2013, the latter approached a London-based law firm Linklaters LLP to undertake a massive restructuring exercise to simplify the complex group structure created by Mallya.

As per records, the complex tax structure had a single aim — allegedly diverting funds through USL Holdings Ltd (BVI), an entity in a tax haven (British Virgin Islands) and three subsidiaries in the UK. These three subsidiaries were USL Holdings (UK) Ltd; United Spirits (UK) Ltd and United Spirits (Great Britain) Limited (UK). Two years after taking control Diageo ended up waiving the $1.5-billion debt owed by these subsidiary companies.

2. Top doctor, Fortis boss got shares from firm whose stents he used

As per the documents, a potential conflict-of-interest transaction shows the alleged involvement of top medical practitioners. 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. He prescribed the same to his patients.

3. MoS Jayant Sinha’s links with Omidyar in Appleby files

The Indian Express report says that Jayant Sinha worked with Omidyar Network as its Managing Director in India before getting elected as the Lok Sabha MP from Hazaribagh in Jharkhand in 2014. The report further says that Omidyar Network invested in a US company D.Light Design which has a subsidiary in the Cayman Islands in the Caribbean Sea. Records of offshore legal firm Appleby reveal that Sinha served as Director of D.Light Design. Sinha didn’t mention the same 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.

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.

Response: I joined Omidyar Network (one of the world’s leading impact investment firms 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.

4. Appleby raised red flags on supplying directors to Jindal’s Mauritius firms

As per the report, Linklaters Singapore Pte, a law firm, had approached Appleby in 2013 to appoint two nominee directors on two Mauritius-based companies of Jindal Stainless Group. These two companies were — Jargo Investments and Vavasa Investments. However, the offshore service provider decided against going ahead with the appointments. As reported, 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’. The requested appointment was in relation to a loan of $35 mn being provided by Credit Suisse AG Singapore to the two Jindal Group Companies. These two firms were named as Jargo Investments and Vavasa Investments.

Response: 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. 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.

5. Security firm of BJP Rajya Sabha MP Ravindra Kishore Sinha linked to two offshore entities

Ravindra Kishore Sinha, a Rajya Sabha MP and founder of the private security service firm SIS or Security and Intelligence Services, heads a group which has two offshore entities. Records show SIS Asia Pacific Holdings Ltd (SAPHL), registered in Malta in 2008, is a subsidiary of SIS. Sinha, considered one of the richest members of Upper House, is listed as a minority shareholder while wife Rita Kishore Sinha is a director of SAPHL. As per the records, SIS International Holdings Limited (SIHL), a company incorporated in the British Virgin Islands, holds 3,999,999 shares in SAPHL while 1 share is with Ravindra Kishore Sinha.

Response: 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.

6. Amitabh Bachchan was shareholder in Bermuda firm now shut

The records show that Bollywood actor Amitabh Bachchan became a shareholder of a digital media company incorporated in Bermuda in 2002. It further says that all investments abroad made by resident Indians required prior approval of the Reserve Bank of India till 2004. It’s not clear if Bachchan had disclosed shareholding to RBI. The company was registered with the name of Jalva Media Ltd.

As per Appleby records, a notice stating that Jalva-Bermuda, listed as “bad debtor”, “shall stand dissolved” was published in The Bermuda Sun on October 28, 2005. While Appleby on its part had already terminated services to the company on January 14, 2004.

The company also had an Indian arm, Jalva-India Pvt Ltd. The Indian wing of the company 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.”

7. Nira Radia on board of two offshore firms

Corporate lobbyist Niira Radia was part of two offshore companies in Malta. In 2010, Radia found herself at the centre of a controversy over intercepted phone conversations that came to be known as the Radia Tapes. The alleged tapes had suggested that she used her proximity to some journalists and politicians to try and influence ministerial appointments in UPA II.

The accessed documents from Malta registry 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.

8. Havells set up offshore firms to push expansion

Appleby records show that electric appliances company Havells India floated over 50 subsidiaries beginning February 2000. Most o the companies were floated from tax havens to acquire a global footprint through acquisitions and tie-ups. The electric company is promoted by Qimat Rai Gupta (photo) and his family, which purchased the Havells brand in 1971.

Response: “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 the business presence in 40-odd countries and thus part of the acquisition. The key purpose of 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”

9. Offshore firm invested in company at centre of Rajasthan ambulance scam

In a big revelation, it was found that a company registered by Appleby in tax haven Mauritius invested in an Indian firm that is at the centre of a probe by CBI and ED into what is called the Rajasthan Ambulance scam. Union minister Vayalar Ravi’s son Ravi Krishna is one of the founders of the firm. A number of politicians were named in the Ambulance scam. They are: former Rajasthan chief minister Ashok Gehlot, Karti Chidambaram. who is the 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.

Response: “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.”

10. Dilnashin Sanjay Dutt (Manyata Dutt) served as director of offshore firm

Dilnashin Sanjay Dutt, popularly known as Manyata, is the wife of film star Sanjay Dutt. Documents accessed from 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.

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.”

11. Pavitar Uppal Singh registered an offshore entity

Pavitar Singh Uppal, described in the documents as a “real estate developer” residing in Jalandhar, registered an offshore entity in August 2016. His company, Silverline Estate Limited, was incorporated in the Commonwealth of Dominica.

Response: 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.

12. Ravish Bhadana, Kota; Neha Sharma and Mona Kalwani

Ravish Bhadana is a resident of Kota. In September 2011, Bhadana was named by the Delhi Police as the kingpin of one of the modules of a fake pilot licensing scam. Records show Bhadana as Director/shareholder/judicial representative and legal representative of two firms. The same positions are also held by two Ghaziabad residents, Neha Sharma and Mona Kalwani in both the firms.

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.”

13. Venkata Narasa Reddy and Partha Saradhi Reddy Bandi

Attunuri and Bandi are Directors at Hetero Drugs Limited, Hyderabad, which was incorporated on April 6, 1993. Malta registry data show that Attunuri and Bandi are directors of Hetero Malta Limited. The two businessmen 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.

14. Alpna Kumari, Anjana Kumari and Archna Kumari

Alpana Kumari, Anjna Kumari and Archna Kumari are the three daughters of a retired Chief Engineer Mahendra Singh. They are said to be associated with the company. While Archna’s husband is a “DIG outside Bihar”, and Alpana and Anjna are schoolteachers in Muzaffarpur.

Response: Mahendra Singh said told The Indian Express that neither he nor his daughters have anything to do with Holtec International Ltd. He said that the company belongs to his nephew, “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.

15. Dipesh Rajendra Shah

As per data received from Malta, Dipesh Rajendra Shah has played all key roles in a company called Vista Investment Holdings Limited.

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.

Follow for all news and analysis on the Lok Sabha Elections 2019. Check Lok Sabha election 2019 schedule, Lok Sabha Constituency Details and updates on campaigning by Narendra Modi and Rahul Gandhi. Like us on Facebook, follow us on Twitter.

Switch to Hindi Edition