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Panama Papers: Currency maker De La Rue offered payoff for its India deal

De La Rue authorised 15% commission to agent in India.

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The world’s largest commercial banknote maker, De La Rue, had contracted a New Delhi businessman to help it bag tenders in India in return for a 15 per cent commission, besides significant amounts as out-of-pocket expenses towards marketing services, Mossack Fonseca (MF) papers accessed by The Indian Express show.

De La Rue International Limited, trading as Portals, entered into an Agency Agreement with Aphra Consultants SA on April 1, 2002, through which Aphra was appointed non-exclusive consultant to introduce business opportunities for De La Rue in South East Asia, including India.

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Aphra was an offshore entity based in Panama and its final beneficial owner was Somendra Khosla, whose address is specified in the MF papers as D-984, New Friends Colony, New Delhi 110065. Portals, which has been supplying banknote paper to the Bank of England since 1724, was acquired by De La Rue in 1995. The agreement was in effect at least until June 2008, the MF papers show.

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On August 15, 2002, four-and-a-half months after the Agency Agreement was signed, De La Rue Managing Director James Hussey wrote to Aphra, amending the agreement to allow Portals to authorise a payment of £ 500,000 (Rs 3.74 crore @ Rs 74.82 to a pound as on August 15, 2002) to the company.

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“In recognition of the significant costs incurred since the last banknote paper tender was held in India (traveling to and from Europe, sales conferences, marketing brochures, etc), Portals is prepared to authorise a payment of UK Pounds 500,000 at a mutually agreed time,” Hussey said in the letter.

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On April 1, 2003, the terms of the Agency Agreement were renewed by De La Rue’s Director of Sales Michael Wilkinson, providing for a 15 per cent commission to Aphra for an initial order of goods from a customer after the payment had been made.

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In subsequent years, De La Rue bagged several tenders floated by the Reserve Bank of India for the supply of banknotes — which are referred to as “India Banknote Contract 2003” and, in another instance, as “second part (2005) of the India Banknote Paper Contract” in the internal board meeting memos of Aphra Consultants SA.

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The Portals-Aphra Agency Agreement of April 1, 2003, which sets the terms of engagement, mentions only the name of the company (Aphra). But the certificate of incumbency available in the MF files shows that the ultimate beneficial owner of Aphra, at least until September 2009, was Somendra Khosla.

In July 2010, De La Rue messed up an order for high-quality banknote paper from RBI. The following month, its MD, James Hussey, under whose watch the Agency Agreement was signed with Aphra in April 2002 and who had amended the agreement to authorise an extra payment of £500,000 to Aphra in 2002, quit.

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The Indian Express physically verified Khosla’s New Friends Colony address. When first contacted 10 days ago, he said he was on vacation and would respond during the weekend. When contacted again, Khosla said, “I don’t want to share any information. We do not share business information.” A detailed email sent to him on March 28 and couple of text messages subsequently did not elicit a response.


An email was sent to Brunswick (Financial PR), listed as a media contact for De La Rue, on March 28, and again on April 1. Three days later, Eden Yates, a Brunswick Group executive wrote back, “Thanks again for getting in touch with us. We are still looking into this and will get back to you in due course with our response, but as you know, your queries relate to a period some years ago.” Brunswick Group did not respond to the queries until Tuesday evening.

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Incidentally, Khosla, though the beneficial owner of Aphra Consultants, entered into a loan agreement with the company on March 31, 2004, to borrow $ 900,000 (Rs 4.05 crore @ Rs 45.02 to a dollar on that date) at an interest rate of 2 per cent. The Aphra board approved the agreement. The same day, in a board meeting, the directors noted that Aphra had sufficient reserves, and recommended an interim distribution of $ 200,000 (Rs 90.04 lakh @ Rs 45.02 to a dollar) to Dome Services FZC. The board also empowered Khosla to sign and execute for and on behalf of Aphra all necessary documents to acquire real estate in Dubai, and make other investments that would yield income and capital.


The 2003 Portals-Aphra Agency Agreement forbade Aphra from acting as an agent of any third party, i.e. a rival to Portals (De La Rue), and from manufacturing and selling competing goods for the duration of the agreement and up to a year after its termination. Aphra was to forward all enquiries to Portals, actively support its sales effort and after sales services, maintain good relations with customers, and provide market information.

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The Agreement also required Aphra to achieve three specific targets: incorporate Starchrome into the imminent banknote paper tender, ensure the tender was launched before December 2003, and support Portals in winning 50 per cent of the tender. The agreement offered a 15 per cent commission for an initial order of goods from a customer, to be paid once the customer made the payment.

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The Agreement was to end on April 1, 2006, or with the expiry of the expected India Banknote Contract (2003), whichever was later. At a meeting on March 31, 2006, the board of Aphra, however, resolved to amend Clause 4 of the Agreement to say it shall terminate on June 30, 2008, or with the expiry of the second part (2005) of the India Banknote Paper Contract, whichever was later. This suggests that the Agency Agreement between De La Rue and Aphra was alive at least until June 2008.

Money Deal

Apr 1, 2002: Agency Agreement signed between Aphra Consultants SA and De La Rue International Limited trading as Portals.

Aug 15, 2002: De La Rue Managing Director James Hussey amends agreement and authorises Portals to pay £ 500,000 to Aphra towards marketing, travel expenses, etc.

Apr 1, 2003: De La Rue Director of Sales Michael Wilkinson renews Agency Agreement, to terminate on April 1, 2006.

Aug 6, 2003: Aphra board authorises company to act as non-exclusive consultant to Portals. Teewareesing Gopal authorised to execute Agency Agreement on behalf of Aphra.

Mar 31, 2004: Somendra Khosla enters into a loan agreement with Aphra Consultants. Borrows $900,000 at an interest rate of 2%. Directors note that Aphra has sufficient reserves and recommend an interim distribution of $ 200,000 to Dome Services FZC. Board also empowers Khosla to sign and execute for and on behalf of Aphra all necessary documents to acquire real estate in Dubai and make other investments.

Mar 31, 2006: Aphra board resolves that Clause 4 of Agency Agreement of April 1, 2003 be amended to state that the Agreement shall terminate on June 30, 2008, or with the expiry of the second part (2005) of the India Banknote Paper Contract, whichever is later. Vimla Ramasamy, the Company Secretary of Jupiter Management (Mauritius) Limited, fully authorised to act for and on behalf of Aphra for the execution of the amended Clause 4 of the Agency Agreement dated April 1, 2003.

Feb 10, 2009: Certificate of Incumbency dated February 10, 2009, continues to show Mossack Fonseca Legal Services as the Registered Agent of Aphra Consultants SA. Beneficial owner of Aphra Consultants is Somendra Khosla.

Sep 7, 2009: Aphra Consultants board resolves to shift domicile of company from Panama to Seychelles.

Response from the De La Rue spokesperson:

“This article refers to events that took place many years ago and the individuals mentioned have long since left the business. De La Rue does business to the highest ethical standards. We require our business partners to do the same, including compliance with national and international tax legislation. These relationships are reviewed continuously, and failure to meet the required standards will result in immediate termination of the relationship by De La Rue.”

First published on: 06-04-2016 at 04:52:08 am
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