Paradise Papers: Turkish man with Gaddafi past and India link

Appleby records show his links to a group of companies under the name “Tridevi” and incorporated almost simultaneously in 2009 in Mauritius and Seychelles to invest in India’s oil and gas sector.

Written by Ritu Sarin | New Delhi | Updated: November 11, 2017 8:39 am
 Paradise Papers, Muammar Gaddafi, Burak Baslilar, Appleby, International Consortium of Investigative Journalists Paradise Papers, Indian Express Paradise Papers, ICIJ, Panama Papers, Offshore accounts, corruption, black money

A common name in the Panama Papers investigation last year and the Paradise Papers now is that of Burak Baslilar, a Turkish building contractor and engineer, who is the face behind several controversial construction contracts, including for the Tripoli Congress Centre during the regime of Muammar Gaddafi in Libya.

Records of the Bermuda law firm Appleby, which is the basis of the Paradise Papers, now link him to India.

In the Panama Papers — The Indian Express published a series of investigative reports in 2016 based on data of offshore entities set up by Panamanian law firm Mossack Fonseca — Baslilar is shown as shareholder of four offshore entities.

Appleby records show his links to a group of companies under the name “Tridevi” and incorporated almost simultaneously in 2009 in Mauritius and Seychelles to invest in India’s oil and gas sector. These are: Tridevi Energy & Resources Limited (Mauritius); Tridevi Capitals (Seychelles); Tridevi Capital Partners (i) LP (Mauritius) and Tridevi Capital General Partner Ltd (Seychelles).

The records list India-born London-based businessman Sidharth Shamnath as a Beneficiary Owner of two of these companies, and a shareholder in the other two. They describe an “active” association between Baslilar and Shamnath.

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Among scores of Appleby documents related to the Tridevi firms, a compliance/risk overview done for Tridevi Energy & Resources is revealing. The proposed activity of Tridevi Energy & Resources is stated as: invest in oil and gas sector in India, in the “upstream” sector to begin with, and the possibility of expansion to all parts of the supply chain at a later date.

Appleby officials note how an “unexecuted” Board Resolution of September 2013 mentions that the company intended to invest in a Krishna-Godavari basin oil block (KG-ONN-2004/1) for exploration but the project was not approved.

The block, developed by Oil India Ltd, is now fully operational.

 Paradise Papers, Muammar Gaddafi, Burak Baslilar, Appleby, International Consortium of Investigative Journalists

Despite this setback, the Tridevi ventures have had success elsewhere, records show. Data from the Bombay Stock Exchange shows a declaration by a Gujarat-based company, Deep Industries Ltd, about a $20-million investment made by Tridevi Capital Partners in one of their subsidiary companies, Prabha Energy Private Ltd (PEPL).

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A press release, dated December 20, 2016, submitted to the BSE by Deep Industries Ltd states that this investment “is possibly the first private equity investment in the Coal Bed Methane sector in India and also possibly the first project based investment in Oil and Gas sector in India”.

It states: “The investment shall be made through subscription of compulsorily convertible debentures, which shall represent 40% equity stake in PEPL on fully diluted basis upon conversion in equity shares, for cash consideration of USD 20 million at a total valuation of PEPL of USD 50 million.”

According to the release, “The funds invested would primarily be utilised for capital and operating expenditure for the development and production of natural gas from the coal bed methane block located in North Karanpura Coalfield(s) (‘NK-CBM-2001/1’) in the state of Jharkhand, India.”

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But in 2015, Appleby, which incorporated the company, raised red flags on the Tridevi Group.

Records show that the flagship company, Tridevi Energy & Resources, figured in several of Appleby’s meetings:

1. An Appleby meeting on September 9, 2015 noted that the company had been struck off the register for non-payment of dues but was in the process of being restored. It was noted that “adverse” results had been recorded since “Burak Baslilar has amassed his wealth in Libya and was said to be close to the late Libyan leader Muammar Gaddafi”.

2. At a risk review meeting on December 10, 2015, Appleby noted that the company had not declared its source of funds when it pitched for the oil exploration block in India. Also, that all previous invoices had been settled by Tridevi Capitals (a Seychelles company). Records note that Balsilar’s “proximity” to Gaddafi enabled him to gain several construction contracts.

3. The meeting further noted: “no declaration of BO (beneficial owner) and source of funds was found on file…also advise on the rationale for the Seychelles companies to pay the fees given that the BO’s differ…Please ask for confirmation on how the company would be funded in the future…”

4. Significantly, documents show that while all beneficiary owners of the company, Baslilar, are Turkish, London-based Sidharth Shamnath is listed as the “instructing party”.

RESPONSE

Sidharth Shamnath, founder, Tridevi Energy, said: “I note you base your questions on information apparently found in documents obtained illegally and in breach of confidence from the law firm Appleby and it includes information which is confidential and subject to legal privilege. The fact that there is public debate about the use of offshore structures does not give rise to a public interest justification for disclosure of confidential information. As you note, it is not illegal to use offshore structures. We are an international private equity advisory firm founded in 2010. Information about our individual limited partners and other internal structure issues are subject to strict confidentiality agreements and discussing them is a breach of our regulatory and legal obligations.

Without prejudice to that I have responded to your points in as much detail as I can. Obviously, if any facts were to be misrepresented, or if for example it were to be suggested that there were concerns about the source of funds for the group’s investments, it could have very serious financial implications for our business and could harm current and future fund raising.

Just like any international private equity firm, from the multi-billion dollar corporations such as Blackstone and KKR, to smaller ones such as ourselves, we use a variety of corporate structures, which include offshore and onshore jurisdictions. Limited partnerships and general partnerships are generally incorporated to provide tax neutrality and the advisory firm is usually an onshore regulated entity. We are no different to a typical private equity structure.

Tridevi Energy and Resources was set up as a special purpose vehicle to explore energy investments in India and has since been dissolved on 31 December 2014 as it did not make any investments.

Tridevi Energy and Resources was set up as a special purpose vehicle to explore energy investments in India including the possibility of making an investment in the Krishna-Godavari block. The potential investment discussions stalled once the financial requirements of the investment were understood and which were beyond the scope and size of Tridevi at that time. The process did not reach any regulatory or official approval stage (such as the Directorate General of Hydrocarbons, etc).

The more recent commitment made to Prabha Energy Private Limited has been made from a different internal funding source. This is a commitment, as opposed to an investment, and only a small fraction of the $20m commitment has so far been drawn down. The balance of the commitment will also come from our new fund, Tridevi Advantage I, which does not include any of existing or past investors.

No further commitments or investments have been made in India.

Mr Baslilar is a successful Turkish business person known to us since 2010. His company has been involved in construction projects in Libya prior to 2011, but I am not aware of any other connection to Libya or the Gaddafi regime, and it would be wrong to characterise him as an “associate” of Muammar Gaddafi. Many companies conducted business in Libya during the Gaddafi regime, including Indian companies such as ONGC, Punj Lloyd and Oil India. Conducting business in a country does not make the business an “associate” of the regime or its leader. None of Mr Baslilar’s companies have been the subject of international sanctions.

Mr Baslilar is a Limited Partner (“LP”) in one of Tridevi’s funds only. He is not a beneficial owner of any of the Tridevi regulated or general partner entities. Being a LP in a private equity fund provides the LP only a financial interest in the fund and does not offer any control, say or management of the investments. Again this is typical of a private equity fund. Mr Baslilar does not have, either directly or indirectly, any financial interest in any current or past investment made by Tridevi in India.

All relevant source of funds and other legal requirements were provided. Mr Baslilar is a successful entrepreneur in Turkey and has been for over two decades. It was Appleby’s duty to ensure that all funding was sourced from legitimate sources and conformed to international regulations and KYC/AML procedures. Tridevi Capital itself maintains the highest standards on these issues and conforms to all legal and regulatory requirements in all jurisdictions in operates or invests.

Further, Mr Baslilar was also approved by the UK’s Financial Conduct Authority as part of another regulatory approval and passed their “fit and proper test”. No concerns were raised by the Authority, which conducts detailed and thorough due diligence, background checks and research.

We are at a critical point in the growth of the firm. After many years of hard and dedicated work, the team is on the verge of a major breakthrough in growth and capital from numerous global institutions. Incorrect, misleading or misinterpreted publicity at this stage will be extremely damaging to us and to the team here.

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