Two days before the Government observes “Anti-Black Money Day” to mark the first anniversary of demonetisation, comes the largest ever leak of financial data. Of two firms Bermuda’s Appleby and Singapore’s Asiaciti with 19 tax havens across the world which help the global rich and powerful, including from India, to move their money abroad.
This cache of 13.4 million documents named “Paradise Papers” tumbled out 18 months after Panama Papers: both sets of data were obtained by German newspaper Süddeutsche Zeitung and were investigated by the International Consortium of Investigative Journalists (ICIJ) working in partnership with 96 news organisations
In India, The Indian Express, just as it did with the Panama Papers, investigated these records for over 10 months to come up with the India findings which will be published in a series of over 40 investigative reports that begins tonight.
A bulk of the records investigated are from Bermuda law firm Appleby. Although not a tax advisor, this 119-year-old company is a leading member of the global network of lawyers, accountants, bankers and other operatives who set up offshore companies and manage bank accounts for clients to do one or a combination of the following: avoid or evade taxes; manage real estate assets; open escrow accounts; purchase airplanes and yachts paying low tax rates; or, simply, use offshore vehicles to move millions across the globe.
They reveal offshore footprints of some of India’s major corporate players as well as of a few high-value individuals — the astounding scale of incorporating shell overseas companies to various ends. Internal communications show how a majority of these companies with offshore residency were wholly controlled from India.
Appleby itself red-flagged round tripping on occasion by questioning if offshore funds meant for investing in India were sourced from India. There are instances of assets of Indian companies being used to guarantee loans raised by offshore companies without disclosing it to Indian regulators. Changing ownership of offshore companies to actually change the ownership of shares held by them in Indian companies without paying taxes in India turns out to be another common malpractice.