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New Delhi: Between 2014 and 2020, 66 Indians managed to obtain Cyprus passports within three months to a year, under the tax haven’s “golden passport” scheme, the Indian Express, in collaboration with the International Consortium of Investigative Journalists (ICIJ), reported, as part of Cyprus Confidential.
Cyprus Confidential is a worldwide offshore probe of 3.6 million documents in English and Greek, exposing a trail of companies established in Cyprus as a tax haven by global elites, including Russian oligarchs.
Also known as the “Cyprus Investment Programme”, the “golden passport” scheme was launched in 2007. It enabled financially prominent individuals to obtain Cypriot citizenship, thereby attracting foreign direct investments into the country.
Among the 66 Indians who got their “golden passport” are Vinod Adani, Gautam Adani’s elder brother who came under spotlight in Hindenburg Research’s investigation; Pankaj Oswal, chairman and founder of Burrup Holdings Limited, and real estate baron Surendra Hiranandani.
According to the European Commission’s website, Cyprus repealed its “golden passport” scheme and stopped receiving new applications on November 1, 2020. However, it continued to process pending applications. As a result, the European Commission decided to send a reasoned opinion to Cyprus on June 9, 2021. Since then, Cyprus stopped processing applications.
The scheme was scrapped due to alleged misuse and for allowing persons with criminal charges, dubious character and PEPs (politically exposed persons) to acquire Cyprus passports, the Indian Express reported.
Names of a total of 83 individuals were flagged for review and possible revocation. A majority of them were earlier citizens of Russia and, according to the data, most were marked for applications bearing “false statement by the investors”, the daily reported.
A Commission appointed by the Attorney General of Cyprus, Georgios Savvides, in September 2020 and headed by retired Supreme Court Chairman, Myron Nicolatos, made the list of these possible revocations.
However, the Cyprus government has not yet officially revealed how many of those under the scanner had their Cypriot citizenships revoked, the daily noted.
Revocations
According to the newspaper, there is only one Indian on the list of proposed revocations of Cypriot passports – Anubhav Aggarwal, a businessman whose “golden passport” was approved within four months on November 2, 2016.
The Nicolatos Commission’s inquiry report states that Aggarwal was implicated in the National Spot Exchange Limited (NSEL) scam and that he failed to mention his links with the suspect companies in his application for citizenship.
Being a “key accused” in the Rs 3,600 crore NSEL scam, Aggarwal faced arrest in Abu Dhabi in August 2020. In June 2020, the Enforcement Directorate (ED) seized his properties.
Aggarwal isn’t the only Indian obtaining Cypriot citizenship under the now-defunct investment scheme, despite legal issues with Indian authorities.
Nesamanimaran Muthu, better known as MGM Maran, a Tamil Nadu-based businessman and former chairman of the Tamil Nadu Mercantile Bank Limited, acquired Cypriot citizenship in 2016. His application was cleared in just two months. In 2017, his two children also got citizenship.
In December 2022, the ED attached assets worth Rs 200 crores of his Maran’s company, Agrifurane Industries Private Limited.
The central probe agency had issued a media release saying that assets to the tune of Rs 293 crore had been attached by them since an equivalent foreign investment had been made by Maran in two companies in Singapore without approval of the Reserve Bank of India, the IE report noted.
The agency also mentioned Maran’s Cypriot citizenship in an official release. “In order to escape the reach of Indian laws, MGM Maran surrendered his Indian citizenship. Not only that, it was also found that MGM Maran also started transferring his wealth from India to overseas in order to keep the same out of reach of the Indian law enforcement agencies in the garb of overseas direct investments from Southern Agrifurane Industries Private Limited (his flagship company),” the ED claimed.
According to the Cyprus Confidential investigation by OCCRP and other media partners, the Cyprus Ministry of Interior said that they have decided on “the deprivation of citizenship of 233 individuals and of them, 68 individuals are investors and 165 are family members of the investors.”
Allegations over tax evasion
The January 2023 Hindenburg Research report detailed Vinod Adani’s offshore holdings.
The research, which included downloading and cataloguing the entire Mauritius corporate registry, uncovered that Vinod Adani, through several close associates, manages a vast labyrinth of offshore shell entities.
The report said that it identified 38 Mauritius shell entities controlled by Vinod Adani or close associates. It also identified entities that were also “surreptitiously controlled” by Vinod Adani in Cyprus, the UAE, Singapore, and several Caribbean Islands.
With the help of these shell companies, Vinod Adani, per the report, was key in managing “a vast labyrinth of offshore shell entities” to facilitate fraud.
The manipulation, it said, was helping the Adani companies maintain their appearance of financial health.
The Adani Group has denied all these allegations, saying it was “calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India”.
Only after the Hindenburg report, Vinod Adani, who mostly occupied the back seat in business operations of Adani Group, came under the spotlight.
The Adani Group first said that Vinod Adani “does not hold any managerial position in any Adani listed entities or their subsidiaries and has no role in their day to day affairs.”
Later, it added that “the Adani Group and Vinod Adani should be seen as one.”
“Vinod Adani is part of the ‘promoter group’ of various listed entities within the Adani Group,” it clarified.
Among other Indians who obtained Cypriot citizenship are industrialist Pankaj Oswal and his wife Radhika Oswal.
Pankaj Oswal, is founder of Burrup Holdings Limited, a liquid ammonium manufacturer.
He was in the news recently for purchasing one of the world’s most expensive houses in Switzerland for $200 million.
Otis data contains numerous documents related to Cyprol Limited, the company established by Pankaj Oswal in Cyprus, as well as details of his citizenship application and final approval. The Oswals applied for citizenship on April 28, 2017, and it was granted almost a year later on April 4, 2018, the Indian Express reported.
Incidentally, once Pankaj Oswal obtained his Cypriot citizenship, he shut down Cyprol Limited — proof of this is the authorisation he signed as the Ultimate Beneficial Owner (UBO) of the company for ConnectedSky, on March 22, 2019 to strike off the company from the Cyprus registry, it added.
ConnectedSky is one of the six financial service providers which over 270 investigative reporters examined for the Cyprus Confidential project.
In April 2016, the couple was barred indefinitely from leaving Australia over tax claims.
In India, it is expected that Cyprus Confidential will compel regulatory and investigative agencies to unveil yet another layer, like they did after previous global investigations revealed substantial instances of tax avoidance and evasion.
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