Indian money in offshore entities: The ‘Paradise Papers’
This page is being updated regularly.
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.
.
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.”
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.”
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.
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.
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,
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.
Paradise Papers, Hindustan Times, Hindustan Times Paradise Papers, Shobhana Bhartia, International Consortium of Investigative Journalists, Appleby records, Financial Data leak, International Consortium of Investigative Journalists, Panama Papers, India news, Indian Express
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.
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,
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.
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
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.
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, Appleby documents show loan waivers linked to Mallya firms
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.
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.
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, Appleby records flag his Congress connection — and his ‘rejection’ by the party.
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.
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
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.
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
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
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 aubsidiary 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 ‘Paradise Papers’
Indian money in HSBC, Switzerland
Indian money in Liechtenstein banks
