The 16th name on the Swindlers' List
Is a Mammen from MRF
BY Sai Manish
Four days ago, TEHELKA had released a list of 15 names in the black money list handed over by the German government to India in 2009. Now, we are revealing the 16th name in the list: a member of the Mammen family from MRF.
This 16th name is a part of the list that the government handed over to the Supreme Court. Like the other 15, the 16th person too is believed to have parked money in the LGT Bank of Liechtenstein.
The Mammens are a strong family-owned business with a hierarchy where three generations are on the MRF board. The founder of MRF, the late MK Mammen Mappillai, was a Padma Shri awardee.
It is not known whether the Mammens own accounts in other Swiss banks but their name stands out in the list handed over to Indian authorities by the German government.
TEHELKA tried to contact Arun Mammen, Managing Director of the MRF Board, for four days with repeated calls to his office, his cousin Koshi Verghese, and his communications office. Calls made till Friday, the last working day of the week in MRF's registered office at Greams Road in Chennai, were answered by his secretary Malti.
Malti gave varied answers like “Mr Mammen is not in office”, “He has gone home for lunch”, and “He is in a meeting.” On Monday, Mammen's office stopped answering calls from TEHELKA.
Arun Mammen has also not responded to two emails sent by TEHELKA seeking his side of the story. Sources say Arun Mammen has been questioned by Income Tax authorities and has paid his dues. The case against him is closed, the sources add. But, TEHELKA has no official confirmation on this.
Here is the email that TEHELKA sent to Arun Mammen, which he did not respond to.
Mr Arun Mammen,
I would like to inform you that we will be publishing your name in the list of account holders with LGT bank. Many people have already splashed your name on TV screens and on the net. I request you to answer the following questions:
When did you first start this account with LGT bank?
How much money have you stashed away in this account?
Have you been served a notice by the government?
Why did you chose LGT of all banks to stash your money?
Will you be willing to pay tax and avoid further complications?
Will you reveal other accounts you may be holding elsewhere?
Kindly reply at the earliest so that we can also publish your version.
Here is a brief on the Mammens on the MRF Board:
KM Mammen: Is the Executive Chairman of the MRF Board. Graduated from the Madras Christian College, joined MRF as a full time director in 1981. He is one of the key men behind the success of the MRF Pace Foundation and takes active interest in cricket, having also served as the Vice-Presidentof the Tamil Nadu Cricket Association.
Arun Mammen: Managing Director of the MRF Board. He is a regular at the MRF racetrack at Sriperumbudur on the outskirts of Chennai. He is known to be close to the Congress and the DMK leaderships in Kerala and Tamil Nadu respectively.
Rahul Mammen: Is a third generation director on the MRF Board and was drafted in November 2010. This 32-year-old is the eldest son of KM Mammen and is a graduate from St. Stephen’s College, New Delhi, and an MBA from the University of Michigan Business school. He is known to formulate long term business plans for the group.
KC Mammen: Is a non-executive director on the board and was a professor of paediatrics at the Christian Medical College in Vellore. Not involved too much in the day-to-day working of MRF.
The First report by Tehelka
ASHISH KHETAN accesses the black list that has been kept away from Indians for two years
It is almost two years since the German Government had passed on the names and bank account details of eighteen Indians who had stashed their alleged ill-gotten wealth in the LGT bank of Liechtenstein, a well-known tax haven nation, 190 km from Munich, Germany.
Germany had officially handed over the list to the Indian Government on 18 March 2009. Prime Minister Manmohan Singh and Union Finance Minister Pranab Mukherjee have since said more than once that this list cannot be disclosed to the Indian people. Opposition parties like the BJP and the Left Front have repeatedly said the names must be disclosed. The BJP has been accusing the government of shielding the names of the tax evaders and not doing enough to bring back the crores of rupees stashed away in tax havens.
Thus, the list has become a subject of tremendous controversy and suspense.
TEHELKA has accessed 16 of the 18 names, of which we are putting out 15 right now. These names include individuals as well as trusts. At this point, we are putting out 15 names without disclosing details like their addresses, the businesses they are involved in and the total money they have stored away in Liechtenstein. Abiding by the basic journalistic principle of proving the accused an opportunity to present their side of story, TEHELKA has approached each of these individuals involved and is awaiting their response.
Once these individuals respond, we shall share the full details of who these people are and what they do. We shall also put out their responses. This, then, is the list.
1. Manoj Dhupelia
2. Rupal Dhupelia
3. Mohan Dhupelia
4. Hasmukh Gandhi
5. Chintan Gandhi
6. Dilip Mehta
7. Arun Mehta
8. Arun Kochar
9. Gunwanti Mehta
10. Rajnikant Mehta
11. Prabodh Mehta
12. Ashok Jaipuria
13. Raj Foundation
14. Urvashi Foundation
15. Ambrunova Trust
The three trusts in this list are registered outside India.
The government has been claiming so far that a detailed investigation into all the bank account details provided by Germany is underway and making the names public would violate the agreement between two sovereign countries, India and Germany.
According to highly placed sources, the investigation into the 15 names that TEHELKA is disclosing, is close to completion and the Central Board of Direct taxes would soon prosecute these trusts and individuals under the relevant provisions of the Income tax Act.
The sources told TEHELKA that the two main charges proved against these individuals are of tax evasion and concealment of income.
The authorities also believe that some of these account holders could be fronts for high profile individuals. One name in particular is being investigated for suspected links with a well-known Indian politician.
The name of the chairman of a major Indian corporation is also part of the list, but TEHELKA is holding back his name until we have his full version.
According to Pranab Mukherjee, the German Government has provided the information under the strict confidentiality clauses of the Double Taxation Avoidance Agreement, and hence they could not be disclosed at the stage of investigation.
However, once the government launches prosecutions, the name would be made public, he had said.
These 18 names are part of the list of 1,400 clients, which were stolen from the databank of LGT Group, the Liechtenstein bank owned by the principality's ruling family, and passed on to German tax authorities in 2008.
The German government had paid as much as €5 million, or $7.4 million, for information on German account holders in Liechtenstein on a disk provided by an informant to the German Federal Intelligence Service, or BND.
After this, Germany and England had launched massive investigations into the suspected tax evasions and have since prosecuted dozens of their citizens on charges of tax evasion and concealment of income.
The German Government alone had initiated action against over 600 of its tax payers.
Besides taking action against its own citizens, the German Government had also shared this information with other countries including India.
But the Indian names figuring in LGT Bank list are only a tip of the iceberg. Experts estimate that Rs 65 lakh crores of ill-gotten wealth earned by Indians is stored in Swiss banks alone.
According to R Vaidyanathan, Professor of Finance at the Indian Institute of Management, Bengaluru, the average amount stashed away by Indians in offshore tax havens between 2002 and 2006 was $136.5 billion. “These illegal funds lying in tax havens are not just related to the issue of tax evasion. It is capital flight from India and part of a corrupt nexus between politicians, bureaucrats and corporate companies,” says Vaidyanathan.
Different Indian governments over the past 20 years have done little to bring this money back by making necessary changes in existing Indian taxation and foreign exchange management laws.
Besides, the government has been slow in renegotiating double taxation avoidance treaties with different tax havens and making provisions for clauses under which the governments and banks could be compelled to disclose the account details.
For instance, under the existing Indo-Swiss Double Taxation Avoidance Agreement (DTAA), information on the Swiss bank deposits of Indian residents could not to be revealed until the Indian Government furnishes evidence of criminality behind these banking transactions.
India enters into DTAAs with other countries to encourage flow of foreign capital and technology, and also to check tax evasion. The purpose of a DTAA is to mitigate the hardship caused by dual taxation on the same source of income. Double taxation on a single source earned by an individual is possible under income tax, as taxation depends not on citizenship, but on residential status.
To date, India has signed comprehensive double taxation avoidance agreements with 77 countries.
“I have asked the revenue department to reopen negotiations for all 77 double tax avoidance agreements with all countries that we have entered into so far, so that we can have real time exchange of information on tax evasion and tax avoidance,” Mukherjee had said at the India Economic Summit in November 2009.
Since the recession hit the economies of developed countries, the Organisation for Economic Cooperation and Development (OECD) has been leading a campaign for transparency in the international banking system, and making the tax havens to necessarily exchange information with other countries where tax evasions are involved.
The US in particular has been proactive in using the might of its economy to make different tax havens fall in line, and share the names of US citizens who have deposited money in these tax havens.
For instance, the UBS Bank, a Swiss bank and the world’s largest wealth management company, came under US scrutiny in June 2008 to uncover the identity of US nationals who maintained secret accounts in the bank and were defrauding the American revenue department.
When the US Government threatened to prosecute the USB Bank, the bank paid a fine of $780 million and also agreed to reveal the details of the hidden assets of US nationals within a fixed time frame failing which it would face prosecution.