Panama Papers: Financial dealings of magnates, stars revealed; Govt orders probe

New Delhi: The Narendra Modi government on Monday ordered an investigation into revelations of secret financial dealings involving industrialists, film stars and a top lawyer in the country that stemmed from the leak of documents from a Panamanian law firm, Mossack Fonseca, more than a year ago. The Panama Papers - a trove of over 11.5 million documents - contain information on 214,488 offshore entities connected to people in more than 200 countries and territories, said the International Consortium of Investigative Journalists (ICIJ) to whom the documents were leaked. In the largest media collaboration ever undertaken, journalists working in more than 25 languages dug into Mossack Fonseca's inner workings and traced the secret dealings of the law firm's customers around the world. The Indian Express - which carried out the investigations in India - said film stars Amitabh Bachchan and his daughter-in-law Aishwarya Rai Bachchan, local industrialists Shishir Bajoria, Apollo Tyres chairman Onkar Kanwar, DLF chieftain K.P. Singh, Indiabulls co-founder Sameer Gehlaut, and top legal eagle Harish Salve were among those who had sought the help of Mossack Fonseca to create complex financial arrangements to stash their wealth in tax havens abroad. Many of them are either non-resident Indians or have legitimate business interests abroad and it would not necessarily mean that these schemes were either illegal or crafted to dodge taxes at home. Some of the largest corporations in the world like Apple Inc have used tax havens to stash their mountains of cash using legitimate arrangements to avoid paying taxes in several jurisdictions - and many of the accounts covered by the Panama Papers may also stand up to legal and tax scrutiny. The ICIJ said it would release the full list of companies and people linked to them in early May. The Indian Express team filtered out 30,000 files from the cache of 11.5 million documents that contained names of 500 Indian beneficiaries. The documents showed that copies of 234 Indian passports had been given to Mossack Fonseca to validate identities. Finance minister Arun Jaitley met Prime Minister Modi to discuss the issue even as governments in Australia, Austria, Brazil, France and Sweden ordered similar investigations into what has been dubbed "the biggest leak of financial data in history". Jaitley said a special multi-agency group had been set up consisting of officers from the investigative unit of the Central Board of Direct Taxes, and the Financial Intelligence Unit. "They will continuously monitor these accounts. Strict action will be taken if these accounts are found to be unlawful." The documents revealed that Amitabh was appointed as a director in four shipping companies that were registered in tax havens in 1993 - one in the British Virgin Islands and three in the Bahamas. Aishwarya had formed a company - Amic Partners - in Panama along with her parents and brother with an authorised capital of $50,000 in 2005. It was wound up three years later. Neither of them was available for comment. However, the corporate honchos rushed to clear the air about their Panamanian accounts and registered firms. Said DLF CEO Rajeev Talwar: "This (report) is aimed at distorting public perception which is extremely dear and important to all corporates and promoter families, especially when they have followed all applicable rules and regulations of the Government of India, the Reserve Bank of India, the Foreign Exchange Management Act, and the income tax department to the last detail." Reports had suggested that the real estate giant had invested $10 million through three offshore firms. Talwar added: "We vehemently and strongly emphasise that all remittances were made after the government introduced the liberalised remittance scheme (LRS) in 2004. Each year, the remittances were below the limit prescribed by the RBI. There is no question of wrongdoing. " Sameer Gehlaut of Indiabulls said the group's overseas investments were made after "paying full taxes in India, each and every overseas remittance was disclosed to RBI as and when it has been made". In Calcutta, Shishir Bajoria said it was unfortunate that his name had been dragged into the controversy. "I never owned Haptic (BVI) Ltd. First Name Group, a corporate service provider, clearly made a mistake and it has owned up in no uncertain terms," Bajoria added. According to the owner of the Calcutta-based IFGL Refractories, First Name had wrongly sent a photocopy of his passport to Mossack Fonseca & Co. "First Name has all my documents," he said. Bajoria said he had at least two firms registered in the Isle of Man and it was perfectly legitimate to own them. One of the firms, IFGL Worldwide Holdings Ltd, is the owner of IFGL's international assets from 2005 onwards. "Everything is well documented because we are a listed company. We remitted money through our bank. There's nothing illegal about it," he added. The Kanwar family, which runs Apollo Group, had floated an offshore entity in the British Virgin Islands in 2010 and two trusts in 2014. A spokesperson said: "India lawfully permits foreign investments in accordance with certain regulations. Any investment abroad, that the Kanwar family may have, is in due compliance with Indian laws, where applicable, including making disclosures wherever required." Salve, an international lawyer who is also a taxpayer in the UK, said all his transactions are through banking channels and above board.