Observing that “builders only understand the colour of money or a jail term,” the Supreme Court bench of Justices DY Chandrachud and MR Shah held in contempt an IREO Group company on August 19 for failing to comply with its order directing refund of money to a homebuyer.
Many homebuyers, having lost hope of getting their apartments, are approaching courts, seeking possession or refund. So are marquee foreign investors such as Axon Capital and Children’s Fund Foundation in courts overseas for returns on hundreds of millions of dollars pumped into the group’s projects. The IREO Group flagship IREO Private Limited is reeling in losses — Rs 500 crore in 2018-19.
But group co-founder Lalit Goyal, whose sister is married to BJP leader Sudhanshu Mittal, had moved assets, investments, and shareholdings, worth an estimated $77 million, to an offshore trust structure which included four entities registered in the British Virgin Islands much before the group got into trouble, reveal internal documents of Trident Trust, a global corporate services company.
According to these documents, Goyal — his residence address is mentioned as Marina Bay Residences, 18 Marina Boulevard, #45-08, Singapore — had set up the Oak Veneer Trust in tax haven Guernsey with Standard Chartered Trust (Guernsey) Ltd as a trustee. Goyal is the ‘Settlor’ — one who sets up or authors the trust — of Oak Veneer Trust. He and Standard Chartered Trust (Guernsey) Ltd – by virtue of it being a trustee of Oak Veneer – are the ‘Beneficial Owners’ of the four offshore entities, all of which were acquired either to hold property, shareholdings and investments, or to be an ‘investment vehicle’.
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The documents form part of Trident Trust’s Third-Party Introducer forms signed by a top executive of Standard Chartered Trust (Guernsey) Ltd, the trustee of Oak Veneer Trust, in November 2016.
The Indian Express emailed queries to Lalit Goyal and the compliance officer of IREO Private Ltd last month, but there was no response.
The four offshore entities, all with registered addresses in the British Virgin Islands, are: Maple Leaf Worldwide Limited, Madison Group Services Limited, Turquoise Waters Worldwide Limited, and Garden Estate Worldwide Investment Limited. These four cumulatively hold assets with an estimated value of about US $77.73 million.
In 2016, the real estate group was in the limelight after it announced a partnership with Donald J Trump Jr’s The Trump Organization for a Rs 100-crore office tower project in Gurugram.
IREO Private Ltd’s latest financial reports for 2018-19 show that the company posted Rs 500 crore losses on a turnover of Rs 376.24 crore. The total losses carried to the balance sheet stood at Rs 1,774.51 crore. Its total assets were Rs 4,505.49 crore, inventories alone accounting for Rs 4,061.48 crore. Its holding company is Mauritius-based Ireo Investment Holding III Ltd.
In February 2018, Goyal was accused by two New York-based global investment companies, Children’s Investment Fund Foundation and Axon Partners, of “large-scale fraud”.
On March 19, 2018, The Washington Post reported that the two had “filed a criminal complaint with New Delhi police last month alleging that the fund’s Indian managing director, Lalit Goyal, co-founder Anurag Bhargava and others engaged in ‘large-scale fraud by ‘illegally siphoning off’ at least $147 million of investor money, although the actual sum could approach $200 million… Police in New Delhi said they have received the complaint”.
The four entities are off-the-shelf companies whose shareholders, directors and record keeping agents are the same. The shareholders for all the four are two Guernsey-registered companies, Nominees One Ltd and Nominees Two Ltd. The director of the four companies is Songbird Ltd, also registered in Guernsey. Standard Chartered Trust (Guernsey) Ltd is responsible for keeping records physically at PO Box 620, Bordeaux Court, Les Echelons, South Esplanade, St Peter Port in Guernsey, a British Crown dependency, and the second largest of the Channel Islands. The shareholders and the director have the same address.
While details of the Oak Veneer Trust are not available in the documents, that of the four entities were specified in the ‘Third Party Introducer’ company update form of British Virgin Islands based Trident Trust.