All Disclosures Made, Say KP Singh, Indiabulls About Panama Papers

Among the rich and powerful "outed" by a leak of who holds offshore accounts in Panama are 500 Indians, some of whom were listed today by The Indian Express.  A lengthy investigation that included journalists in different countries has found and published the names of hundreds of thousands of clients of a law firm based in the tax haven of Panama.

Not all offshore transactions are illegal, a point stressed by some of the Indian firms and individuals named - who said their investments have been disclosed to the required authorities and due taxes have been paid.

KP Singh, whose DLF is the country's biggest real estate developer, has been named along with his family for acquiring a company in the British Virgin Islands and for setting up offshore entities with them as shareholders. A spokesperson for DLF said, "'All remittances and utilisation of funds are strictly in accordance with rules and regulations of FEMA (foreign exchange laws) and the income tax act."

Sameer Gehlaut, founder of Indiabulls, the housing finance and real estate major, said, "All disclosures... have been made to RBI, Income Tax departments and each of the overseas remittances have been made."

What experts point out is that some of those with legitimate offshore entities may have exploited a loophole. The Reserve Bank of India says Indians can buy shares of foreign companies, but cannot start firms abroad; 100 per cent subsidiaries and joint ventures are also permitted.

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What a team of experts will now look at - as ordered by Prime Minister Narendra Modi - is whether Indians in some cases acquired companies - to circumvent the rules. Because they did not start companies abroad, their representatives will claim, they did not violate Indian laws. But the journalists who have worked on the expose say that documents reveal that many people acquired "off-the-shelf" or foreign firms from the Panama law firm, Mossack Fonseca, which reportedly delivered them at lightning speed - again, that's not illegal in tax havens like Panama. But whether these were then used to park hidden wealth and conceal the source of funds is what the investigators will try to uncover.