Paradise Papers: The Big Whale Of Tax Evasion, Now Out In The Open
The big whale of tax evasion, now out in the open:
November 8 is the day, which the Government of India has decided to mark, as ‘Anti Black Money Day’ and just before that the largest ever leak of purportedly dubious financial data has hit the world. The data comes from 13.4 million documents called ‘Paradise Papers’, which were obtained by German newspaper Süddeutsche Zeitung (the largest daily newspaper in Germany) and have been investigated by the International Consortium of Investigative Journalists (ICIJ) in tandem with 96 other news organizations of the world including leak with ‘The Indian Express’, in India. The data contains names of 714 Indians and among the 180 countries; whose data features in paradise papers, India's rank in terms of the number of persons is 19th.
Paradise is the fourth leak in the series of financial data leaks, the previous three being Offshore Leaks of 2013, Swiss Leaks of 2015 and Panama Papers of 2016. The leak mostly pertains to the documents of Appleby Global Group Services, a Bermuda based law firm. The Paradise Papers also contain leaked documents from Asiaciti, a Singapore based family owned trust company and Company Registries in 19 tax heavens. According to the Indian Express, “Appleby helps set up companies and bank accounts overseas, provides nominee office-bearers, and facilitates bank loans or transfer of shares, in multiple secrecy jurisdictions.”
These two firms mainly help corporate clients and individuals evade taxes & help them move vast sums of money across the globe by opening offshore accounts in jurisdictions which nowadays are not looked favorably by the regulatory agencies of the world.
The documents show that Appleby, which does not even has an Indian office, has a large number of clients from India including large Corporate Houses, Celebrities, and Prominent Personalities.
The Indian names in the data trail include film stars (& associates) including Amitabh Bachchan and Sanjay Dutt’s wife; corporate honchos, including companies involved in 2G scam, in the Aircel Maxis deal, Dr Ashok Seth, Chairman of Fortis-Escorts, the absconding businessman Vijay Mallya; Corporate Houses including GMR Group, Jindal Steel, Apollo Tyres, Havells, Emaar MGF, Videocon, Hinduja Group, Hiranandani Group & D S Construction; corporate lobbyists like Nira Radia; and political personalities & associates like former Congress Minister Veerappa Moily’ son Harsha Moily, P Chidambaram’s son Karti Chidambaram, Congress leaders Sachin Pilot & Ashok Gehlot,; and BJP leaders Jayant Sinha & Ravindra Kishore Sinha, founder of SIS (Security and Intelligence Services), amongst others. In fact, Sun Group (founded by Nand Lal Khemka) with 118 offshore entities, has been mentioned as the second largest client of Appleby.
From the Global point of view, the Paradise Papers contain the names of some of the associates of US President Donald Trump (including billionaire Wilbur Ross), American singer Madonna, Queen of England - Elizabeth II, former Canadian Prime Minister Justin Trudeau’s Associate and former Pakistan Prime Minister Shaukat Aziz.
What is important to note is that the presence of any Indian entity in any offshore tax-light jurisdiction may not be violating any laws by itself, however, any routing of funds or any non-disclosure related to the funds could be considered a serious offense under the law. The Indian Express has alleged that <strong>firms like Appleby, in the garb of a law firm, “help the rich and wealthy to avoid taxes, hide names and even supply directors for shell companies.”