What are “Panama Papers”?
All through Monday, 4 April, 2016, Twitter and other social media sites were buzzing about the Panama Papers. This is a reference to a leak of some 11.5 million internal documents from a Panama-based law firm called Mossack Fonseca. This Panamanian organisation specialises in incorporating shell companies, operating in a number of tax havens including British Virgin Islands, Switzerland, Seychelles, Cyprus, and Panama. The documents revealed were leaked through an encrypted channel to Sueddeutsche Zeitung, a Munich-based media organisation and were the basis of a massive investigation undertaken by the International Consortium of Investigative Journalism (ICIJ). This investigation revealed offshore holdings and tax frauds of hundreds of rich and famous people around the globe including political leaders, actors, sportsmen, and industrialists. In what has been described as one of the largest probes in the world, the tax irregularities of about 140 important politicians have been revealed.Why Does this Concern India?
According to the ICIJ revelations, about 500 Indians have been named by the Panama Papers as those who own a stake in many of these offshore (shell) companies, trusts, and foundations. About 234 Indian passports were made available as part of the dealings related to the incorporation process. Indian Express, partnered with ICIJ, to look into the Indians involved and has been able to verify about 300 addresses among the 500. Some 36,000 of the documents leaked, detail out the involvement of Indians through the past years in the formation of illegal stashes abroad. These rich and famous individuals have made use of these tax havens to hide their wealth and evade taxes. This is a major concern since Indian nationals were not allowed to float overseas companies or trusts prior to 2003. By 2004, RBI norms changed and for the first time, Indian nationals were allowed to transfer funds up to USD 25,000 abroad as investments under the Liberalised Remittance Scheme. These investments, the RBI clarified, could be in the form of procurement of shares but individuals were not allowed to float companies till about 2013. Most of the ‘companies’ revealed by the Panama Papers were set up long before 2003. Only in 2013 did government norms allow an Overseas Direct Investment window, meaning that Indians could enter into joint ventures abroad.Indians Named in Panama Papers
Some of the celebrities named in Panama Papers include:- Amitabh Bachchan - The Indian superstar actor was allegedly appointed as the director in at least four shipping companies in the Bahamas. These companies were all set up in 1993. While the capital of these companies range between USD 5000 and USD 50000, records show deals worth millions of dollars made by these companies.
- Aishwarya Rai - According to the leaked papers, Aishwarya Rai, one of leading actors in India and Amitabh Bachchan’s daughter-in-law, was named director in a firm called Amic Partners Limited in the British Virgin Islands in 2005. Her parents and brother were also major stakeholders. Later, her status was changed to that of a shareholder. The company was dissolved in 2008.
- Sameer Gehlaut - Indian entrepreneur and owner of the Indiabulls realty group, Sameer Gehlaut is believed to have acquired “three top London properties” through shell entities in Jersey and the Bahamas. Family members have been named in these corporations (and others in the UK, Delhi, and Karnal). These are now being developed into hotels and residential projects.
- KP Singh - DLF promoter, KP Singh, his wife, and other family members are revealed to have acquired companies in the British Virgin Islands, stashing away about USD 10 million through these deals.
- Vinod Adani - Vinod Adani, brother of Gautam Adani – founder and chairman of the Adani group – was also named in the Panama Papers.
- Shishir Bajoria - Industrialist and trader
- Ashok Garware, Aditya Garware, Sushma Garware - Industrialists
- Onkar Kanwar - Chairman of Apollo Group
- Harish Salve - Lawyer, former Solicitor General of India (1999 - 2002)
- Anurag Kejriwal - Former leader of the Delhi Loksatta Party
- Iqbal Mirchi - Underworld don
- Rajendra Patil - Industrialist, son-in-law of Karnataka Minister
- Mallika Srinivasan - Wife of Venu Srinivasan (TVS CMD)
