Secret offshore companies opened by Indians, Mumbai leads

Mumbai, the country’s financial capital, is home to the highest number of shareholders/directors in offshore entities opened by Indians.

Of the 498 entities the International Consortium of Investigative Journalists (ICIJ) offshore leaks database throws up for the search ‘India’, 184 are based in Mumbai.

An offshore entity is a company, trust or fund created in a low-tax, offshore jurisdiction.

The database clearly states merely having an offshore entity does not amount to any violation of law.

...

Most of the Mumbai addresses are concentrated in south Mumbai hotspots such as Malabar Hill, Cuffe Parade or Altamount Road, but one investor with interests in a British Virgin Islands-based asset management firm is from Municipal Chawl in Dharavi, Asia’s largest slum.

With 113 addresses, Delhi is second on the list. Together, the capital’s satellite towns such as Gurgaon (15), Noida (three), Ghaziabad (two) and Faridabad (three) account for two dozen offshore companies. Kolkata is a distant third, with 39 shareholders (10 listed under the name ‘Calcutta’).

While Bangalore has 36 shareholders, Chennai has 31 and Hyderabad has 14. The twist in the tale is small towns, where even banking services are said to have limited penetration, also figure in this list.

...

A Business Standard analysis of the database reveals connections between these shareholders, scattered across the length and breadth of the country.

For instance, a shareholder based in Weekly Bazaar, Nizamabad, 175 km north of Hyderabad, holds stake in a company based in Labuan, a tax haven near Malaysia. His partners in the venture are two people based in Ludhiana.

A New Delhi-based export-import company is named as the master client for these investments; according to the ICIJ glossary, a master client is “often an intermediary or go-between who helps a client set up an offshore entity”.

...

Such connections are also seen between a few entities based in remote centres. An investor based in Mayurbhanj, Odisha, is linked to others in Sultanpur (eastern Uttar Pradesh), Chennai and New Delhi. They all have interests in a British Virgin Islands-based entity.

In the South, Bellary, Karnataka’s mining hub, has seven offshore account holders; the names of the account holders do not reveal much. All the offshore entities were based in British Virgin Islands.

Jamalabad, near Muzaffarpur in Bihar, has one shareholder. Other centres where the shareholders/directors in offshore entities are based include Madurai, Navsari, Rajkot, Surat, Ajmer, Bhopal and Singhbum (Jharkhand).

...

ICIJ’s offshore leaks database allows users to search through about 1,00,000 secret companies, trusts and funds created in offshore locations such as the British Virgin Islands, Cayman Islands, Cook Islands and Singapore.

It also reveals the names behind about 1,00,000 secret companies and the trusts created by two offshore services firms -Singapore-based Portcullis TrustNet and British Virgin Islands-based Commonwealth Trust Limited.