It's been over two years since the leaked Panama Papers first put the spotlight on the shadowy world of tax havens and offshore companies. It had also embarrassed several world leaders, famous personalities and leading businessmen by leaking evidence of money stashed abroad and prompted investigations into suspected tax evasion in several countries, India included.
Now, prepare for round two. According to The Indian Express there is a second set of Panama Papers - dubbed Panama Papers: The Aftermath - comprising more than 1.2 million fresh documents of which at least 12,000 are linked to Indians. The daily, in collaboration with the International Consortium of Investigative Journalists (ICIJ) and German newspaper Suddeutsche Zeitung, investigated this second lot and discovered how Panamanian law firm Mossack Fonseca, which was at the epicentre of the massive 2016 leak, scrambled to respond to the ensuing unprecedented global crackdown. In the bargain, the law firm reportedly not only confirmed the existence of several customers who had hitherto denied any links but also unmasked new clients.
According to the daily, among the names that did not figure in the 2016 leak are Ajay Bijli, owner of PVR cinemas, as well as members of his family and Kavin Bharti Mittal, CEO of Hike Messenger and son of Airtel's Sunil Mittal. Another new name is Jalaj Ashwin Dani, son of Asian Paints promoter Ashwin Dani. Famous names from outside India include football superstar Lionel Messi, Argentina's President Mauricio Macri's family and shell companies owned by iconic French jeweller Pierre Cartier.
To be sure, there are legitimate uses for offshore companies and trusts. Last November, over a year after the Panama Papers revealed that 426 Indians or persons of Indian origin had companies in the tax haven, the Central Board of Direct Taxes (CBDT) had said only 147 of them were "actionable" cases. The following month, sources from the Enforcement Directorate (ED) had said that out of the 45 cases that they were investigating, only around five were of serious nature - where the individuals had not informed the tax department of their offshore accounts or companies. The rest of them were more of technical violation. Nonetheless, data leaks like this are in public interest because they help expose wrongdoing.
The report adds that Panama Papers: The Aftermath show that several companies set up by Indians were initially sent notices by Mossack Fonseca to produce missing information. These notices mentioned the name/s of the Beneficial Owner (BO), wherever available, or demanded that the name be immediately disclosed. Several of them were sent out in November 2016, seven months after the scandal broke. In the next stage, the law firm served 90-day notices to clients saying that they would resign as the Registered Agent because the companies failed to meet legal due diligence requirements.
For instance, Mossack Fonseca, in its communications, named Amitabh Bachchan as director of two companies - Lady Shipping Ltd and Treasure Shipping Ltd. It subsequently served the 90-day notice to the actor via UK-based Minerva Trust - the administrator for these companies - addressing him as director of a third company, Sea Bulk Shipping Company Ltd. The notice conveyed Mossack Fonseca's intent to resign as the company's agent saying that Sea Bulk Shipping did not fulfil "our due diligence requirements".
Bachchan, who is under official scrutiny in connection with the Panama Papers, has denied any link to these companies.
Mossack Fonseca's message trail has similarly confirmed several other names boasting links to offshore entities. The list reportedly includes Shiv Khemka, son of SUN group patriarch Nand Lal Khemka; Dr Jehangir Sorabjee, son of ex-attorney general Soli Sorabjee; KP Singh of the DLF Group and his immediate family; politician Anurag Kejriwal and Navin Mehra of Mehrasons Jewellers. Even the underworld finds mention through Hajra Iqbal Memon, wife of Iqbal Mirchi, who was once Dawood Ibrahim's trusted aide.
The new set of documents also revealed that Mossack Fonseca's Indian clients reacted to the first leak very differently. While some Indian owners of offshore companies rushed to liquidate their firms, some not only asked Mossack Fonseca to continue as their agent, but also increased their holdings. Like Lokesh Sharma, owner of British Virgin Islands-based Mardi Gras Holdings, who increased his share capital 30 times in February 2017. Significantly, Kolkata businessman and BJP leader Shishir Bajoria, who had previously told the daily that his name in Mossack Fonseca records was a clerical mistake, contacted the law firm through an intermediary to change the beneficial ownership of Haptic (BVI) Ltd just days later. The firm was liquidated in May 2016. Around the same time, PRS Oberoi resigned as director of J&W Inc, a Bahamas company.
A Multi-Agency Group (MAG), comprising officials of CBDT, RBI, Financial Intelligence Unit and ED, had been set up to ensure "speedy and coordinated" probe against Indians whose names have figured in the Panama papers on the day of the expose itself. Prosecutions against 16 Indians have been filed in courts so far. According to CBDT - which reportedly heads the probe unit - till June 2018, undisclosed income totalling Rs 1,088 crore had been detected.
With PTI inputs