ICIJ-Mauritius leaks: Jindal Steel, GMR Holdings among firms named

While investments in India through the Mauritius route have been on the wane, the tax haven has still seen a sizeable amount of funds getting routed by entities operating or investing in India. Data released by International Consortium of Investigative Journalists (ICIJ) showed that as many as 50 companies or one-fourth of those disclosed in the Mauritius leaks, had India as their only country or one of the countries of activity.

After adjusting the data for defunct entities, the share fell marginally to 22 per cent of the total entities disclosed in the Mauritius leaks. Among individual companies, GMR Holdings, Apollo Hospitals, Jindal Steel and Power (Mauritius), Kolte Patil Developers, have been named in the disclosures for their links or transactions with some of these Mauritius-incorporated entities.

To be sure, the disclaimer on ICIJ's website reads: "There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any people, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or acted improperly." The documents procured by ICIJ from the offshore specialist law firm -- Conyers Dill & Pearman -- formed the basis of the recent findings.

In some of the cases, there are instances of complex holding structures. For instance, in the case of Jindal Steel & Power (Mauritius), the company held shares in another Mauritius entity Panacore Investments until 2014, as per ICIJ's findings. Panacore Investments ordered four bulk carriers from Chinese shipbuilding companies, at a cost of $27 million each in 2012. Part of the financing came from a loan by Jindal Steel & Power (Mauritius), through Dubai-based Panacore Resources DMCC.

For registration of each ship, Panacore Investments owned subsidiaries in Marshall Islands, one for the registration of each ship: Core Ambition, Core Forte, Core Integrity and Core Vision. Both Panacore or Jindal Steel and Power (Mauritius) did not respond to ICIJ's queries. Panacore Investments and the other four Marshall Islands-entities were named as subsidiaries in Delhi-based Jindal Steel & Power's 2014 annual report.

Meanwhile, GMR Holdings and Apollo Hospitals are mentioned in the list for a 2013 transaction that involved buying Mayo Mauritius' stake in AMG Healthcare Destination. The latter was established "to develop, operate and manage the project hospital at the Rajiv Gandhi International Airport at Shamshabad, Hyderabad", as per ICIJ's findings.

Pune-based real estate firm Kolte Patil Developers appears in the data leaks as it was a co-investor in a Mauritius-based real estate fund sponsored by US-based Portman Holdings. According ICIJ's findings, "Portman, as a sponsor along with other offshore investors, would invest in Indian Investee companies through a feeder fund incorporated in Mauritius". The findings showed that the fund would invest in Indian real estate projects in Pune such as Margosa Heights project. Further, the investments would be made "through intermediate holding companies, also incorporated in Mauritius."

While the above leaks don't necessarily indicate impropriety, they gain significance in the light of the government's efforts to renegotiate tax treaties with offshore jurisdictions such as Mauritius and Singapore.

The Double Taxation Avoidance Agreement was signed between India and Mauritius in 1982. The pact allowed any Indian company to seek tax residency in Mauritius and thus pay zero capital gains tax. The treaty also made Mauritius, a suitable route for foreign funds looking to invest in India.