NEW RECORDS of Mossack Fonseca show that it failed to collect certified due diligence documents from three entities, incorporated in the British Virgin Islands (BVI), for their owners Kushal Pal Singh, promoter of real estate major DLF, and his family members despite several reminders, at least until last November.
In February 2017, Mossack Fonseca confirmed K P Singh, son Rajiv Singh, daughter Pia Singh and their immediate family as beneficial owners of the three companies, and also conveyed its intent to resign as their registered agent for not fulfilling BVI laws and due diligence requirements.
Responding to notices seeking information – these were served by the International Tax Authority and the Finance Ministry of BVI – Mossack Fonseca, on February 14, 2017, named Kushal Pal Singh and wife Indira Kushal Pal Singh as beneficial owners of Willder Limited – Indira Kushal Pal Singh passed away in February 2018.
While Piya Singh and her husband Dhiraj Sarna were named as beneficial owners of Alfa Investments Global Ltd in Mossack Fonseca’s reply on February 16, records show that Rajiv Singh, wife Kavita and daughters Anushka and Savitri Devi were named as owners of Beckon Investments Global Ltd on February 22, 2017.
On February 15, 2017, a day after it responded to the notice from the tax authorities, Mossack Fonseca served a 90-day notice to Willder Ltd, conveying its intent to resign as the registered agent. Similar notices were served on Alfa Investments Global Ltd and Beckon Investments Global Ltd on February 16, 2017.
In response, London-based Chesterfield Group Limited, the administrator for the three BVI companies, wrote to Mossack Fonseca, claiming that the due diligence documents had already been provided in September 2015.
But records show that Mossack Fonseca kept reminding Chesterfield Group Limited that the due diligence documents — including sources of funds — certified by an independent professional were pending for all three companies. The last such reminder on record is dated November 28, 2017.
Underlining that K P Singh and Pia Singh qualified as PEPs (Politically Exposed Persons), Mossack Fonseca, in one of its emails to Chesterfield Group Limited, stated that the firm “is subject to supervision with respect to anti-money laundering laws, regulations, and/or guidelines issued by the competent authorities in all the jurisdictions where Mossack Fonseca & Co. provides the service of registered agent”.
As reported by The Indian Express in April 2016, K P Singh, now 86, and his wife Indira became shareholders in Willder Ltd in 2013, while daughter Pia Singh and son Rajiv Singh set up Alfa Investments Global Ltd and Beckon Investments Global Ltd, respectively, in 2012 with their immediate family as shareholders. The family’s three offshore entities, according to Mossack Fonseca records, together held almost Rs 67 crore or $10 million in shares.
Mr K P Singh, responding on behalf of the family, stated in an email: “We reconfirm that acquisitions of the shares of the BVI Companies referred to by you were exclusively out of remittances made under Liberalised Remittance Scheme (LRS) of RBI through normal banking channels and within the permissible limit as fixed from time to time and from no other sources. These investments are compliant with applicable Laws and Regulations of Govt. of India/RBI and are strictly done as per FEMA/ RBI Regulations. Additionally, we have completely, regularly and transparently disclosed all the information sought by the Government Investigating Agencies in this regard from time to time.
“As shareholders, we have not been involved in the management of these companies or fullfilment of compliance requirements in the jurisdiction of their incorporation and have assumed that these companies and all their operations have and are still being carried out in compliance of the applicable laws of the country in which these entities are incorporated. We do not have any knowledge about notices, if any, from any Registered Agent to these companies, for the failure by these companies to furnish information or on account of non-fullfilment of BVI laws and due diligence requirements as alleged.
“Alfa Investments Global Ltd. and Beckon Investments Group Ltd. are companies where our family members are the shareholders. In Wilder Ltd., the shares acquired, were settled into a discretionary trust, in full compliance within the applicable regulatory provisions, where family members are beneficiaries.
“The prescribed details of investments in these entities are properly disclosed in Schedule of Foreign Assets of our Income Tax Returns as required under the Income-Tax Act, 1961 and Rules made thereunder.”