‘Do not permit creation of shell companies, not a tax haven’: Mauritius regulator on Hindenburg report

The response comes days after Hindenburg Research alleged that the Sebi Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, had stake in obscure offshore entities used by the Adani group for siphoning off the money.

Sebi chairperson Madhabi Puri Buch and her husband have been accused of siphoning off money. (Express Archives)

The Financial Services Commission (FSC) of Mauritius has denied claims by the recent Hindenburg report on the country being a “tax haven” and objected to the mention of “Mauritius-based shell entities”.

The FSC, Mauritius, which is an integrated regulator for the non-banking financial services sector and global business, said that the legislative framework in the country does not permit creation of shell companies.

It added that Mauritius strictly complies with international best practices and has been rated as compliant with the standards of the Organisation for Economic Co-operation and Development (OECD), which is an international organisation that works to build better policies for better lives. It works closely with policy makers, stakeholders and citizens to establish evidence-based international standards.

“As per the peer review conducted by the OECD Forum on Harmful Tax Practices, the OECD is satisfied that Mauritius does not have any harmful features in its tax regimes, thus recognizing Mauritius as a well-regulated, transparent and compliant jurisdiction. Therefore, Mauritius cannot be termed as a tax haven,” the FSC said in a statement on its website.

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The response comes days after the US-based Hindenburg Research, quoting ‘whistleblower account’, alleged that the Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and her husband, Dhaval Buch had stake in obscure offshore entities used by the Adani group for siphoning off the money. The Adani group and Sebi chairperson have denied these allegations.

“Mauritius has a robust framework for global business companies. All global business companies licensed by the FSC have to meet substance requirements on an ongoing basis as per section 71 of the Financial Services Act which is strictly monitored by the FSC,” the Mauritius regulator said.

Hindenburg alleged that Sebi chairperson and her husband invested in Global Dynamic Opportunities Fund (GDOF), in which Vinod Adani, brother of Gautam Adani, had invested.

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The short seller said that a Vinod Adani controlled company had invested in “GDOF in Bermuda, a British overseas territory and tax haven, which then invested in IPE Plus Fund 1, a fund registered in Mauritius, another tax haven”.

IPE-Plus Fund 1, a small offshore Mauritius Fund, is managed by wealth management firm India Infoline (now 360 ONE WAM), Hindenburg claimed.

“The report of Hindenburg has further cited ‘”IPE Plus Fund” Is A Small Offshore Mauritius Fund’ and ‘IPE Plus Fund 1, a fund registered in Mauritius’. We wish to clarify that IPE Plus Fund and IPE Plus Fund 1 are not licensees of the FSC and are not domiciled in Mauritius,” the FSC stated.