The big trio from subcontinent

Indians with secret bank accounts in Geneva, which shaped the debate over black money parked overseas.

Now came the Panama Papers.

The secret files of Mossack Fonseca, a law firm headquartered in tax haven Panama, reveal a list of individuals who have paid the firm and bought the benefits of the secretive, lax regulatory system in which it operates -- to set up offshore entities in tax havens around the world.

Over 500 Indians figure are on the firm's list of offshore companies, foundations and trusts. They include Bollywood legend Amitabh Bachchan and his daughter-in-law, famous actress Aishwarya Rai Bachchan.

In the stories on the Panama Papers, another big name from South Asia surfaced -- Pakistan's Prime Minister Nawaz Sharif.

Two years before the launch of Amitabh Bachchan Corporation Limited (ABCL) in 1995, the Bollywood legend was appointed director in at least four offshore shipping companies.

Records of international law firm Mossack Fonseca, reviewed by The Indian Express, and subsequent inquiries show that the four companies were registered in tax havens -- one in the British Virgin Islands and three in the Bahamas in November 1993.

The authorised capital of these companies -- Sea Bulk Shipping Company Ltd (BVI), Lady Shipping Ltd, Treasure Shipping Ltd and Tramp Shipping Ltd (Bahamas) -- ranged between a modest $5,000-50,000 but they traded in ships worth millions of dollars.

Bachchan was also managing director of all four companies. The other directors were representatives of firms that provide corporate and financial services.

On December 15, 1994, Tramp Shipping Ltd (Bahamas) signed an investment agreement -- deed of covenant -- with Dallah Al-Baraka Investment Company Ltd (DAICO) of Jeddah-based Dallah Al-Baraka Group. A Fonseca entry dated January 6, 1995 shows that a total of $1.75 million was advanced by DAICO to Tramp.

Along with the deed of covenant, the two companies also signed “a first priority deed of assignment of freight and earnings” and a “pledge and deposit agreement”.

The latter was also signed by Constellation Ship Management (Bahamas) Ltd, owned by Captain Mehernoosh R Khajotia, as warrantor. The same day, on December 15, 1994, all 1,000 shares of Tramp Shipping Ltd was transferred to Constellation Ship Management Ltd (later renamed Constellation Shipping Ltd).

Khajotia shifted his base to India in 1998 and died in 2006. But a dispute between his Mumbai-based Polaris Group and DAICO reached the Bombay High Court in 2008.

Admitting a petition on December 17, 2009, the High Court noted that Khajotia owned Constellation Shipping (Bahamas), which “some time prior to 2000” was financed by DAICO for acquiring five ships.

According to the petitioner, a group company of DAICO, the loans for three vessels were repaid and the outstanding debt of Constellation was $2.5 million. Tramp Shipping Ltd had an authorised capital of $5,000. In September 1997, records show, Bachchan along with other directors of Tramp Shipping, resigned from the board.

The company replaced them with directors provided by Fonseca and, in November, sold a ship -- MV Mattz Tramp -- for over $2 million.

Amitabh Bachchan and family did not respond to repeated emails sent to them and phone calls made to their mobile numbers, Mumbai residences and the AB Corporation office for over a week. An AB Corp executive confirmed receipt of the email from The Indian Express on March 28.

'A RAI'

Records show that for at least three years, Aishwarya Rai and her family were part of a company incorporated in the British Virgin Islands, a tax haven.

The Indian Express accessed Fonseca documents which show that Rai, her father Kotedadi Ramana Rai Krishna Rai, mother Vrinda Krishna Raj Rai and brother Aditya Rai were appointed on May 14, 2005, as directors of Amic Partners Limited -- with an initial authorised capital of $50,000.

On June 18, 2005, an Amic board resolution changed Rai's status to shareholder. And on July 5, 2005, internal instructions exchanged between Fonseca staff stated: “One of the shareholders requested to shorten her name from Ms Ashwaria Rai (sic) to Ms A Rai for reasons of confidentiality. The same was mutually agreed and consented by all directors and shareholders.”

When the company was set up, each share had a par value of $1 with the Certificate of Incumbency stating that the four directors had an identical holding of 12,500 shares each.

Also, a resolution passed by the Rai family on June 18, 2005, shows that all four members were present in Dubai for a board meeting when it was decided that the star and her mother would step down as directors but remain as shareholders.

The resolution was signed by all four directors, and the meeting chaired by Rai's father.

Records also note banking instructions issued during that meeting — that the Dubai branch of ABN-AMRO bank would hold the company's accounts and be its Non-discretionary Investment Managers. The resolution clarifies that any of the listed directors may operate these accounts.

Archana Sadanand, the media advisor to Aishwarya Rai, said: “What is this consortium (ICIJ) and what does it do? Is this an authorised entity and how do we know that the information they get is authentic? All information that you have is totally untrue and false.”

About 11 million documents held by the Panama-based company were leaked to German newspaper Sueddeutsche Zeitung. The files were then shared with the International Consortium of Investigative Journalists (ICIJ), a nonprofit network of based in Washington, DC.

SHARIF AND HIS CHILDREN

The sons and daughter of Nawaz Sharif reportedly set up at least four offshore companies in British Virgin Islands (BVI).

These companies owned at least six upmarket properties overlooking London's Hyde Park, The Indian Express reported.

“Thousands of Mossack Fonseca (MF) documents reviewed by The Indian Express and subsequent enquiries reveal that the Sharif family mortgaged four of these properties to the Deutsche Bank (Suisse) SA for a loan of GBP 7 million and the Bank of Scotland part financed the purchase of two other apartments,” it said.

The ICIJ reports said, "Three children of former and current Pakistan's Prime Minister Nawaz Sharif -- Mariam, Hasan and Hussain -- were owners or had the right to authorise transactions for several companies."

"Mariam Safdar was the owner of British Virgin Islands-based firms Nielsen Enterprises Limited and Nescoll Limited, incorporated in 1994 and 1993," it reads.

The report said that the daughter and sons of Nawaz Sharif “did not respond to repeated requests for comments”.

Sharif, who is believed to be a billionaire twice over, is now being probed by Transparency International as a result of the leaked documents.

The anti-corruption organisation is calling for the Pakistani leader to explain how his family maintains and manages their fortune.

But Sharif's son Hussain told the country's largest private broadcaster Geo that his family had done "nothing wrong".

"Those apartments are ours and those offshore companies are also ours," he said in comments aired by the channel on Monday.

"It is according to British law and laws of other countries that it is a legal way to avoid unnecessary tax via offshore companies."

Meanwhile, Nawaz Sharif yesterday announced his decision to set up a high-level judicial commission, headed by a retired judge of the Supreme Court, to investigate the allegations.

“This commission will investigate all the allegations and reveal facts before the nation,” Sharif said in a televised address.

[From The Indian Express, Dawn, Times of India, abc.net.au and Samaa.tv]