The Centre on Monday said that a “multi agency group” headed by the chairperson of the Central Board of Direct Taxes will monitor the investigation of the list of people who allegedly used global tax havens to hide their assets from government scrutiny.
The revelations are based on over 1.19 crore confidential documents, dubbed as “Pandora Papers”, from 14 offshore service firms that allegedly set up shell companies for clients seeking to keep their financial activities discreet.
These shell companies were set up in tax havens such as Dubai, Monaco, Panama and Switzerland.
The documents were leaked to Washington-based International Consortium of Investigative Journalists. It shared access to the leaked data with a host of media partners including The Guardian, BBC Panorama and The Washington Post as part of a massive global investigation.
The Indian Express conducted the Indian portion of the investigations.
Among the Indian citizens who are part of the list are businesspersons Anil Ambani and Kiran Mazumdar Shaw and cricket icon Sachin Tendulkar, The Indian Express reported on Sunday.
The Indian government on Monday said that it had taken note of the “Pandora Papers” revelation done by the International Consortium of Investigative Journalists.
The multi-agency group that will investigate the matter will be comprised of representatives from the Central Board of Direct Taxes, the Enforcement Directorate, the Reserve Bank of India and Financial Intelligence Unit – India.
“Names of only a few Indians (legal entities as well as individuals) have appeared so far in the media,” the Ministry of Finance said. “Even the ICIJ [International Consortium of Investigative Journalists] website...has not yet released the names and other particulars of all the entities.”
The Indian government said that the investigative agencies will start the inquiries in the cases and that appropriate action would be taken.
“With a view to ensure effective investigation in these cases, the government will also proactively engage with foreign jurisdictions for obtaining information in respect of relevant taxpayers/entities,” the government said.
What else did the investigation find?
Globally, prominent persons who allegedly used such tax havens include Pakistan Finance Minister Shaukat Tarin, Jordan’s King Abdullah II and pop singer Shakira.
Not all offshore entities are illegal. But tax evaders, fraudsters and money launderers often find the secrecy offered by tax havens attractive.
A series of leaks of financial data has rattled the offshore world since 2013. The ‘Pandora Papers’ represent the latest and largest in terms of data volume.
Reliance ADA Group chairperson Anil Ambani and his representatives own at least 18 offshore companies in Jersey, British Virgin Islands and Cyprus, The Indian Express reported on Sunday.
Seven of these companies reportedly borrowed and invested at least $1.3 billion (about Rs 9,649 crore).
However, in February 2020, Ambani told a court in London that he was bankrupt and his net worth was zero. The court, however, had said that there were questions “about the extent to which Mr Ambani has any offshore interests…”
The court later ordered him to pay $716 million (about Rs 5,315 crore) to three Chinese banks, but he did not do so.
The investigation by The Indian Express also found that investment bank Allegro Capital’s majority shareholder Kunal Kashyap is the “protector” of a trust named The Deanstone Trust, which was set up by Mauritius-based company Glentec International in New Zealand in 2015.
Glentec is reportedly 99% owned by John McCallum Marshall Shaw, the husband of Biocon Executive Chairperson Kiran Mazumdar Shaw.
On July 8, market regulator Securities and Exchange Board of India barred Allegro Capital and Kashyap from trading in the stock market for a year for insider trading in Biocon’s shares.
The Biocon executive chairperson told the newspaper that Kashyap runs a financial advisory service that both Biocon and Glentec have used. “Mr Kashyap advises several companies apart from Biocon,” she said. “I understand that Mr Kashyap’s SEBI case is currently pending with SAT (Securities Appellate Tribunal) and hence it would not be appropriate for me to comment on this any further.”
According to the Pandora Papers, Sachin Tendulkar and members of his family were Beneficial Owners of an offshore entity that was liquidated in 2016.
The former cricketer, his wife Anjali and his father-in-law Anand Mehta have been named as Beneficiary Owners and Directors of Saas International Limited, a company based in the British Virgin Islands. The company was reportedly liquidated three months after the Panama Papers expose.
Mrinmoy Mukherjee, the director of Sachin Tendulkar Foundation, told The Indian Express that the investment was legitimate and was declared in the former cricketer’s income tax returns. He said that there was no question of him engaging in money laundering or tax evasion.
“The referenced investment by Mr Tendulkar has been made by him from his tax paid funds under the Liberalised Remittance Scheme (LRS) and has been duly accounted for and declared in his tax returns,” Mukherjee said, according to The Indian Express.
Mukherjee said that Rs 60 crore noted in the investigation is “grossly incorrect”. “...but regardless, all amounts received by Mr Tendulkar on liquidation of the investment have also been declared in his tax returns,” the director of the Sachin Tendulkar Foundation said.