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Tuesday, July 17, 2018

Panama Papers: Despite global leak, this Indian client didn’t want Mossack Fonseca to quit

Panama Papers: On December 1, 2016, six months after the Panama Papers leak, Moonglow was sent a notice by Mossack Fonseca, asking for details of property holdings and bank accounts. On February 2, 2017, the law firm sent its “notice to resign.”

Written by Ritu Sarin | New Delhi | Published: June 22, 2018 1:42:11 am
Panama Papers: Despite global leak, this Indian client didn’t want Mossack Fonseca to quit Panama Papers: On April 4, 2016, when The Indian Express reported on Moonglow during the Panama Papers leak, Sorabjee said he had complied with all disclosure norms as required by Indian tax authorities.

THE REGULATORY heat generated by the Panama Papers leak prompted law firm Mossack Fonseca to resign from various offshore firms it helped set up, but one Indian client continued to urge the law firm to stay on, new records show.

That client was Moonglow Investments Global Ltd, an offshore entity set up in the British Virgin Islands in 2010, with Dr Jahangir Sorabjee, son of former attorney general Soli Sorabjee and honorary consultant physician at Bombay Hospital, listed as the sole shareholder.

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On April 4, 2016, when The Indian Express reported on Moonglow during the Panama Papers leak, Sorabjee said he had complied with all disclosure norms as required by Indian tax authorities. But new records show that Moonglow was included in the list of 69 companies sent by BVI’s Financial Investigation Agency to Mossack Fonseca on May 3, 2016, seeking more details.

Panama Papers: Click for full coverage

On December 1, 2016, six months after the Panama Papers leak, Moonglow was sent a notice by Mossack Fonseca, asking for details of property holdings and bank accounts. On February 2, 2017, the law firm sent its “notice to resign.”

Panama Papers: The resignation notice sent on February 2, 2017, to Dr Jahangir Sorabjee’s BVI firm.

The new leak includes subsequent emails between compliance staff, which state: “the client does not want you to resign…’, “it is important for us to keep this client…’, “ please review/rescind resignation…”

Meanwhile, as part of compliance procedures, Sorabjee provided more information on his holdings through Moonglow. As source of funds, he stated that “property investments” would be the main activity of the company and that its recurring or annual investments would be $30,000.

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In the declaration, Sorabjee stated: “Moonglow investments has invested in property in the USA and UK. Funds for the purchase of these were sourced from sales of properties in India and remitted post taxation as per norms set by the Reserve Bank of India. Details of Moonglow Investments, its bank accounts and its holdings have been consistently declared to the Indian income tax authorities as per their requirements…”

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Sorabjee also informed the law firm that the estimated net worth of the two properties would be $1.8 million and provided details of two bank accounts maintained by him in Hong Kong.

When contacted by The Indian Express, Sorabjee said: “I am almost certain I was not served any letter of resignation by Mossack Fonseca in February 2017. I believe a new registered agent was required when the company was shut down earlier this year.”

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