 Hello and welcome to NewsClick, we are going to discuss with Paranjaya Gautha Kutta, the continuation of the Mossack-Fonseca case which is again hit the news. This Paranjaya as you know is a second big tranche which has come after the first one which came in 2016 which of course you have already covered at least parts of it for us in NewsClick. This one seems to indicate that Mossack-Fonseca was in deep trouble because they did not know 75 to 80 percent of their clients and they were really dealing with the banks, the lawyers and willfully flouting all the laws and they then tried to find out who their clients were. Before we go to the Indian scenario who are the people involved. This is really a tip of the iceberg regarding what the tax havens do and how many companies like Mossack-Fonseca are there. So what do you think is the likely impact of such shall we say breaches of confidence because the whole purpose of the tax haven is to hide your identity. Now if you can this can be breached as Mossack-Fonseca's security was breached do you think this whole tax haven issue is now going to unfold? Do you think it is really going to make a difference to the tax havens because of all of this? Probably not, Praveed. For some time now the very countries that were responsible for promoting these tax havens have at least officially expressed a lot of concern. In fact the organization of economic cooperation and development the OECD which is a grouping of the richest countries in the world they have an initiative called BEPS the base erosion and profit shifting initiative. So the whole idea is to prevent large companies including Apple and a whole lot of other companies from shifting their profits to low tax or no tax jurisdiction. Now this is hurting the richest countries in the world, it's hurting countries that have promoted dozens of. But you know Parvindra it might hurt the countries but it's helping certain group of companies and people. Absolutely. So therefore the countries may be saying all this publicly but what they have done till now, no bite in any of this and let's not forget two of the largest conduits for tax purposes is shifting is Holland and UK, these are the two biggest ones. Let's take a step back. On the 5th of April 2016 you had the Panama Papers. This was the leak of over 11 and a half million documents, that's correct. Thereafter you had from another company similar company accountants financial consultant firm this time in Bahamas and that was called the Paradise Papers. Now in this time Paradise Papers the aftermath you have an additional 1.2 million new documents and of course the Indian company many thousands of Indians involved. Remember this is the International Consortium of Investigative Journalists together with this German newspaper called Sadyush Zaitum. Now they are the ones who received the original Mausage and that's right and they took the help of the ICIJ and they put together teams of journalists in across 90 countries including the Indian Express in India to put it together. Now the old data included relatives and associates of the Russian president Vladimir Putin, the Chinese president Xi Jinping, but the person who was hurt was the former Prime Minister of Pakistan, Myanmar Nawaz Sharif. Also Iceland. Iceland, that's correct. One minute. When you said Putin they have said associates and again, alleged associates, again I don't know how close they are to Putin because Russia was facing sanctions. So there was an element of all the sanctions beating that they were doing. So I would put that you know the Putin issues really or could be. The more important point in this regard is the persons who have been hurt the most barring the Iceland Prime Minister and the Pakistan Prime Minister Myanmar Nawaz Sharif who was barred from holding his office by the Supreme Court in July 2017. Most of these names are not from the western countries. That is the more substantive point. So we have Russia, China, Saudi Arabia, Malaysia, Syria, Argentina, Morocco, Pakistan, India, Argentina, Azerbaijan, Qatar, UAE, South Africa, Zimbabwe, Sudan, Ivory Coast, etc. The important point is not you again on this occasion in the in the aftermath you find Lionel Messi all over again now he's obviously not exactly in the best of in the best frame of mind that as as we talk but you also have the Argentine president. You have Mauricio Macri and the new name that has come up is of course Pierre Cartier of France well known fashion what should I say a fashionista or I don't know if that's the right word I'm using of course we had earlier the Jackie Chan but the point that you're making the most substantive point have things change will things change difficult to say it's early days and the other part of it that city of London itself is a kind of tax haven if you will and in the United States there are a large number of tax havens within the country Delaware, Florida, Arizona and principal principalities and micro states in Europe Monaco, Liechtenstein, San Marino among others so what happens is the big countries also have captive shall we say tax havens and those who don't have tax havens we of course can claim to have Mauritius and we seem to have or at least the rich in India have used it for various purposes. We also have Singapore we've had Seychelles we have the UAE yes yes Dubai is again one of those which which has acted in fact Taiwan is another one which is not considered a tax haven but has also been a shall we see a sink of a lot of this money you know in fact you know there was even a proposal at some point of time in India to even try and make an island in the Andaman and Nicobar Islands into a tax haven it never really took off that proposal. Yeah I think it would be still difficult for public to support it that's why the Mauritius route is there yes as you know I worked on a book on the subject. So coming back to this that what you are telling me is that if you look at all of this that the pressure still to regulate the tax havens and it's not very difficult you don't have to go and regulate the tax havens most of them are actually under British jurisdiction a whole lot of them are under British jurisdiction but the conduit countries can be very easily regulated through which all of this takes place and the conduit countries are only about five or six. Now Newtick for instance the India Mauritius double tax in 2016 soon after Narendra Modi became Prime Minister they actually plugged some of these loopholes and they also you know plug the loopholes pertaining to participatory notes through which you know it becomes easy to conceal the identity identities of people who are investing money or what to use that technical parlance called UBOs ultimate beneficiary owners of these companies and things. Now what happened in India even though these loopholes were plugged what were put in place are what are called grandfathering clauses that means an easy transition mechanism so it gives people that like the foreign institutional investors among others the portfolio investors to set a base in the Netherlands in France and other jurisdictions. So back to the issue that you we are raising that's the biggies who are really involved in this and those biggies are European big countries which have acted as conduits because they have their old colonial connections through which the big business of these countries also operate India for instance to UK and we can see that this as we're going to come to what the Mosach-Fonseca papers now show that the most of the connections are to British Virgin Islands many of them absolutely half the Mosach-Fonseca client operated through British many of them they did indeed operate through British Virgin Islands half of them half the total number of clients of Mosach-Fonseca British Virgin Islands when you look at outcomes now when the Indian Express put it out they said what has been the impact of the exposure of 2016 and what is the outcome and this is what they get from the government of India the in-contact department as you know a group a sort of a multi agency group it's called the MAG was set up to specifically look into this they made a number of global inquiries 150 of them this is India the number of clients that were being investigated in India were 426 I'm giving you exact numbers number of search and seizure operations 58 and the number of prosecutions filed in Indian courts hello only 16 and what does what is it officially claimed as what they claim allegedly the undisclosed income that means income not disclosed to the income tax authorities come to think of it when you look at the scale of the operations it's very small it's a little over a thousand crores is 1,088 crores which when converted into US dollars at the prevailing exchange rate is 162.4 million so when you look at when you say over a period of how many years over a period of a long time we don't know how long really so you are right when you say this is the tip of that proverbial iceberg what about the new tranche of documents and what any big names of course you already said Lionel Messi that could also show be a reason why Argentina's awful form in the World Cup and Messi's as well. And the Argentinean president I mentioned his name also. I don't think he was playing football. No he wasn't. Again the same story as in the case of Vladimir Putin and Xi Jinping relatives and alleged associates now what is an associate how do you link with them that no but his case there are much more solid issues because he tried to get his name removed from some of the documents but it's interesting when you look at a similar attempts and I would say perhaps the most interesting such example is the biggest star of them all in India the one and only Amitabh Bachchan now here I am merely telling you what has been reported in the Indian Express. Now the first tranche of papers alleged that there were two shipping companies called Lady Shipping and Treasure Shipping with with Mr. Bachchan was allegedly associated according to the Mosaq Fonseca documents now what happens what the new information that they have is through a trust called Minerva trust Mosaq Fonseca serves a show cause I mean this trust is by the administrator of these two companies mentions serves a notice on a third company which is called C-Bulk shipping and Mr. Bachchan is allegedly associated with this company as well but wait interestingly Mosaq Fonseca says we don't want to act as your agent anymore C-Bulk because you don't fulfill our that is Mosaq Fonseca's due diligence requirements as from his Mr. Bachchan he didn't respond to the Indian Express and he of course denies any association with these companies the earlier tranche had talked about his daughter-in-law Ashwari Rai her parents and family this time this is the new bit of information that we have but but probably we have a lot of other names who have come up the name of Mr. Jahangir Soli Surabji the son of former attorney general he's an honorary consultant physician at Mumbai Hospital we have K.P Singh of the DLF group once again we have Mr. Anurag Kejriwal who was the former Delhi chief of the Lok Sattapati we have Naveen Mehra of Mehra's son's jewelers we have the son of Iqbal Mirchi who was wanted by the Bombay police Mumbai police who died in London I think five years ago we have one Shiv Khimka who has floated hundreds of shell companies has business with Russia we have PRS also known as Bikki PRS Oberoi who designed as a director of one of these companies we have Lokesh Sharma's company who had runs a sports management firm we have some very very interesting examples as we are talking about sports on the day of the leak the first leak in Musak Fonseca Musak Fonseca sent an email a standard email to lots of people saying we'll make sure these kind of quote-unquote intrusions do not take place in the future now interestingly an Indian company a chartered accountant company PP Shahan associates send a mail to them saying on behalf of one of its clients a company wide field global investments on behalf of Mr. Chirayu Amin saying you know what's going on and in case our viewers are not familiar with who is Mr. Chirayu Amin was formally associated with the Federation of Indian Chambers of Commerce and Industry he is the managing director of Alembic Pharmaceuticals and most importantly he's chairman of the Indian Premier League the Cricket League and a vice president of the BCCI the Board of Control for Cricket in India there are many many other interesting what should I say anecdotes which have come from these the Panama papers the aftermath if I have a bit of time I'll tell you the alleged arms merchants Sudhir Chaudhary his son Bhanu Chaudhary their name comes in with them they were once in 2014 arrested by the serious fraud office in London for allegedly helping Rolls Royce secure contracts in Indonesia in China one of the in the complex web name comes up for Mr. one Mr. Sumant Kapoor who happens to be the son of a former chairman of the Hindustan Aeronautics Limited his name is BK Kapoor we have another unusual instance of Kolkata based businessman who I know very well he was formally associated with the CPI and he's now a spokesperson of the BJP Shishit Bajoria he apparently had claimed that his name was due to a clerical error but then he contacted Fonseca Mosaic Fonseca through an intermediary to change the beneficial ownership of a company called haptic BVI with which was subsequently liquidated in May 2016 now these are all these allegations have been printed in black and white in the Indian Express I really don't know whether they're correct or not correct how accurate they are but but in an express seems to have done its its job there's a whole lot of awareness way these are documents of Mosaic Fonseca that's great whether they're correct Mosaic Fonseca keeping this documents of thousands of its clients in this wrongful way as it were as it's being claimed is that really believable those are things we leave to the our viewers but before we conclude three important sets of names I forgot the son of Sunil Bharti Mittal who was a British citizen until recently he was an overseas citizen of India Mr Ajay Bijli and his family members who are the have controlling interests in the PVR cinemas chain okay and and the Dhani's Jalaj Ashwin Dhani and his family members who were closely associated with Asian pains these are some of the other names which I mentioned the big ones that I mentioned no it's an interesting issue what happened was and I think this in some sense is also the risk that now this black money holders of different kinds are going to face that they may believe that the tax havens are very safe but unfortunately for them electronically hacking is going to become shall we say more widespread but more widespread more likely to be done by insiders because what is being called by the German paper as John Doe an anonymous person he said I really think these people are ripping off their people and therefore I am I for my for my conscience I am giving this to you because that that kind of thing is much more likely to be the insider yes and if I can just add a line or two to what you said you could essentially define such individuals as whistleblowers who choose to remain anonymous I mean look at India we have enacted a law on whistleblowers passed by both houses of parliament but we don't have the rules in place for all intents and purposes that whistleblowers law is completely ineffective and the point the last point that I thought I should mention to you at the end of the day whether it's Banama Bahamas or the 90 plus tax havens across the globe what are they selling at the end of the day what are the services they're selling secrecy and absolutely right and that is the risk because everything being electronic means a single point failure anybody likes no then who had access to the NSA data anybody in Moza Fonseca who had access to the data could easily get all this data and make it public so the belief that you can hide behind tax havens forgets that the tax havens have now become digital and therefore they no longer as safe they used to be and by the way once you become public you've lost the trust of anonymity that is what you can run but you can't hide now you're gone so Moza Fonseca really collapsed they had no way of can they have actually shut their operations as you know so therefore the data is even more public and this is really an example of that but once it decided they have to shut shop there is nobody even to protect that data and then all their thousands of clients who thought they're very safe because this is somewhere else aren't risk but at the end of the day it's still for the shall we say the big countries to act to get their house in order no there's no way about the fact because you know it's not only say when you look at the globe it's the rich countries and when you look at within the not so rich countries the developing countries or what Chairman Mao Tse-tung called the second world so when you look at the second world and the third world countries if you believe in those definitions what these tax havens do is essentially help the rich within these countries the rich and the powerful within the rich within the countries but the look at the other part of it the money goes into the western financial system absolutely and that is the reason this is the way global finance capital become re entrenched itself and exacerbates inequalities globally and within nations and we're not talking here about the Amazon's and the Apple's that's another story we should that we will do another day okay because that's something which you really need to look at how they are and you have to find somebody who will talk to you about it I'm not competent to talk about we can we can that's not the problem but the real issue is that the tax havens perform two things one is what's called tax avoidance which is really as you know evading tax in fact lawyers the book that came out in December this book is it's called the thin dividing line and the thin dividing line is between the tax avoidance which is supposed to be legal and tax evasion which is supposed to be illegal which includes round-tripping money laundering and that is only how good the law how good lawyers or accountants you have absolutely the difference but the other part of it is avoidance of tax is one part other is to get the quote-unquote illegal wealth from all over the world and put it in the western financial system because ultimately somebody in India somebody in Pakistan as you can see they're not putting their money into Indian banks if you recall in the run-up to the elections Mr. Narendra Modi had said he would bring back all the illegal wealth that Indians had stashed away in Switzerland and Baba Ramdev had said in 100 days of the new government 15 lakh rupees will be given to all the poor families but then we know after that what the BJP president Mr. Amit Shah had to say. Jumla. So this is easier said than done. Thank you very much Poran Jai we'll keep on discussing this issue because I don't think it's going to go away in a week so let's see what further revelations come as as it progresses and then we can discuss this again. Thank you. This is all the time we have for NewsClick today do keep watching NewsClick and also visit our website