This was revealed in Pandora Papers, the latest and largest offshore financial document leak of all time: up to 12 million documents from 14 companies in offshore tax havens with details of the ownership of 29,000 companies. and offshore trusts.

Obtained by the International Consortium of Investigative Journalists (ICIJ) two years ago, a year-long survey of India-related data by The Indian Express reveals how individuals and businesses, many of whom are already under scanner, push the limits to evade detection, using loopholes in national law and lax jurisdictions in tax havens.

Thus, Anil Ambani, who declares bankruptcy in a British court, has 18 offshore companies with assets; fugitive Nirav Modi’s sister creates trust just a month before fleeing India; the husband of Kiran Mazumder Shaw, promoter of Biocon, sets up a trust with the keys of a person banned by Sebi for insider trading, reveals an investigation of The Indian Express.

Of the more than 300 Indian names, offshore holdings of up to 60 prominent individuals and companies have been corroborated and investigated. These will be unveiled in the coming days.

Pandora Papers: tax havens and service providers

Five distinct patterns emerge in the Pandora Papers survey:

1. Several owners of offshore entities, even in India, have found ways to adapt to the post-Panama Papers scenario, when the offshore world was shaken, when several countries tightened their regulations and in India, the tax authorities detected Rs 20,000 crore and more of undeclared foreign and domestic assets until early 2021.

The sport icon Sachin Tendulkar, for example, requested the liquidation of its entity in the British Virgin Islands barely three months after the Panama Papers were shown. There are also other prominent Indians and NRIs who, following the 2016 data breach, opted for a reshuffle or reorganization of their offshore assets. Obviously, Indian businessmen have set up a plethora of offshore trusts to project some degree of separation of their wealth and to insulate their assets from creditors.

2. Individuals accused of economic crimes and under investigation have created an offshore network in tax havens like Samoa, Belize or the Cook Islands, in addition to larger tax havens like the British Virgin Islands or the Panama. Indeed, many people and entities named in the Pandora Papers are no strangers to investigative agencies in India. Some are in prison and several subjects of this investigation are currently free on bail. There is a fairly long list of Indian offenders currently under the control of agencies such as the Central Bureau of Investigation, the Enforcement Directorate and the Serious Fraud Investigation Office.

3. Those who owe thousands of crore rupees to Indian banks have, as the Pandora Papers show, embezzled a significant portion of their assets in a maze of offshore companies. In one case, major Indian economic criminals, currently in prison, purchased a Bombardier Challenger aircraft through their offshore entity. As the survey reveals, many developers have placed their assets in offshore trusts, effectively protecting themselves against the personal guarantees of their companies’ defaulted loans.

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4. Then there are PEPs or Politically Exposed Persons. Indian PEPs include former members of parliament; those who have held public office in India; others that deal with either sensitive transactions or trade in sensitive countries or even those that have already been booked by Indian investigative agencies. All of these PEPs have been moved to the “high risk” watch list by the offshore service provider.

5. Leaked documents reveal that many powerful players who could help end the offshore system are profiting instead – by hiding assets in secret companies and trusts. Confidential data from the 14 offshore service providers, for example, shows offshore entities created by a former tax officer, former tax commissioner, former senior military officer, former senior legal officer, etc.

While offshore trusts are recognized by law in India, what has led to a rush of Indian industrialists and business families to create trusts is the fear of a return of inheritance rights, which until ‘when it was abolished in 1985, reached 85%. hundred.

“Inequalities have widened and the gap between the rich and the poor has widened. It was Arun Jaitley, as Minister of Finance, who increased the surtax on the super-rich (those who earn more than 1 crore rupee a year) to 12% while removing the wealth tax from 1 % in the 2015-16 budget, ”said a senior revenue official. -The official from the Tax Department said.

Although India has signed information exchange agreements with various countries, they only exist on paper. “It is almost impossible to pierce the corporate veil … and our rule of law does not allow us to undertake random computer investigations and research,” the official, who was involved in following up on the investigations of the Panama Papers.

“In addition, most large companies over the years have made sure to have an NRI family member or foreign citizen handling the offshore business. This ensures that these entities do not have to disclose their assets in the list of foreign assets when filing returns, ”said the official.

Pandora Papers: More than 600 journalists from 150 news agencies worked together in what is the largest survey ever.

Abroad, the Pandora Papers expose the transactions of the King of Jordan, the Presidents of Ukraine, Kenya and Ecuador, the Prime Minister of the Czech Republic and former British Prime Minister Tony Blair. The files detail the financial activities of Russian President Vladimir Putin’s “unofficial propaganda minister” and more than 130 billionaires from India, Russia, the United States, Mexico and other countries.

In the popular imagination, the offshore system is often seen as a distant scattering of islands shaded by palm trees. The Pandora Papers show that the offshore slot machine operates in all corners of the world, including the financial capitals of the richest and most powerful economies, including the United States of America.

The system is also backed by elite institutions that serve the rich and powerful – global banks, law firms, and accounting firms headquartered in the United States and Europe.

A document from the Pandora Papers shows, for example, that banks around the world have created at least 3,926 offshore companies for their clients with the help of Alemán, Cordero, Galindo & Lee, a Panamanian law firm run by a Panama’s former Ambassador to the United States The law firm – also known as Alcogal – has affiliate offices in a dozen countries, including New Zealand, Uruguay and the United Arab Emirates. It shows that Alcogal has created at least 312 companies in the British Virgin Islands at the behest of US financial services giant Morgan Stanley.

Besides Alcogal, the greatest number of secret documents in the Pandora Papers come from the Trident Trust Company of BVI and the Asiaciti Trust of Singapore. Other major offshore vendors include Aabol (All About Offshore Seychelles Limited), OMC (Overseas Management Company Inc) and Fidelity Corporate Services Limited. The leaked records of the 14 offshore suppliers cover a period of more than two decades, from 1996 to 2020, while the period of incorporation of companies and trusts is even longer, ranging from 1971 to 2018.