Panama Papers: Ruchi Group’s boss has ten offshore firms — and a CBI FIR

The Central Bureau of Investigation had named Umesh Shahra (also promoter of Revati Cement Pvt Ltd) in August 2014 in its 23rd First Information Report in a case related to alleged irregularities in coal block allocation. The Income-Tax department and the Employees Provident Fund Organisation, Ruchi Group’s boss has two foundations, eight offshore entities — and a CBI FIR as well too, have raided the group companies in the past for alleged tax and PF evasion respectively.

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The two trusts that the Shahras set up in Panama are The Threewells Foundation, the public deed of which was signed on October 1, 2009, and One World Trust, which was set up on October 22, 2008.

Both the trusts are active with Mossack Fonseca Trust (Mossfon Trust) generating annual invoices until March 2015. A detailed mail sent to him on March 29 and several calls made thereafter remained unanswered.

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An alumnus of BITS Pilani and IIM Ahmedabad, Umesh Shahra is the son of Indore-headquartered Ruchi Group of Industries Chairman Kailash Chandra Shahra. He heads group companies Indian Steel Corporation Ltd, RSAL Steel Private Limited, Ruchi Global Limited, Ruchi Acroni Industries and Avantee Mega Food Park Ltd. He is a director in over a dozen companies in India.

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In the ‘Master Client Form’ filled and submitted to Mossfon (Mossack Fonseca) Trust by Ravindra Vasantrao Chitnis, a Dubai-based consultant for the Shahras, the principal object and description of the activity of The Threewells Foundation is mentioned as “to hold assets, i.e. shares of companies”.

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Both Umesh and wife Neeta Shahra are described as businesspersons and their residence mentioned as House No. 28, Old Palasia, Indore – 450001, Madhya Pradesh, which matches with the address provided in their passports. It also asks Mossfon Trust Corporation to arrange and provide “nominee founders” and “members of the foundation council.”

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Chitnis will be the ‘Protector’ of The Threewells Foundation.

MF (Mossack Fonseca) Legal Services is the Registered Agent for the Foundation that is registered in the public registry of the Republic of Panama on October 7, 2009.

The founder is ‘Foundation Management Co. Inc’ provided by Mossfon and the Foundation Council is ‘Foundation Membership Inc’, also arranged by Mossfon. Its initial assets consist of $10,000. When the foundation was set up, its assets also included 50,000 shares (nominal value $1 each) of Pegasus Holdings & Investments Ltd and 50,000 shares (nominal value $1 each) of Prudential Assets & Capital Ltd. These two entities are international business corporations (IBCs) registered in tax haven British Virgin Islands.

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The principal beneficiaries of The Threewells Foundation are Umesh Shahra, Neeta Shahra and their son Suyash Shahra.

While details of all offshore entities of the Shahras were not available in the Mossack Fonseca files, a mail by an MF executive — seeking quick action to his request for expediting the setting up of the One World Foundation — to a colleague in Mossfon Trust states, “We have received the master client form from our client, however since we are very very late for the incorporation of this foundation, can you kindly proceed with the incorporation and we on a later stage ‘within 10’ days will provide you with the rest of the requested documents.

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Please note that this client already had one foundation with us before as well as so far 8 offshore companies and we don’t want to lose him.” He was referring to The Threewells Foundation which is the sole shareholder in eight offshore entities.

The deed settlement of the other foundation, ‘One World Trust’ was amended on October 6, 2008, again with Chitnis as the original ‘Settlor’ and Mossack Fonseca & Co (BVI) Ltd as the original Trustee. The principal beneficiaries of the One World Trust too are Umesh, Neeta or Suyash Shahra.

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One World Trust’s annual assets as on December 31, 2013, included the shares of Eris Incorporation Ltd, another offshore entity.