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ICIJ Pandora leaks Binod Chaudhary Tax corruption

Sunday, October, 17

According to Forbes, the family of Binod Chaudhary, the only Nepali billionaire on the Forbes list, has opened a company in a tax haven country by circumventing Nepal’s laws, attracting foreign investment to Nepal, taking dividends, and expanding its global business network by setting up companies in different countries. Has revealed.

Five members of his family, including billionaire Binod Chaudhary, who claims to have legally invested abroad using loopholes in the law, have been found to have invested in a tax haven country.

According to a report provided by the International Consortium of Investigative Journalists (ICIJ) to the Center for Investigative Journalism (KHOPKE) Nepal, there are three companies registered in the British Virgin Islands, one in Singapore and one in Panama.

More than 600 journalists from 117 countries attended the event, according to the public Pandora Papers on Sunday night.

Although Chaudhary said in his book and various interviews that he had made legal investments abroad and there was no room for questioning their legitimacy, the Pandora Papers leaks show that he had invested in companies set up for tax evasion against Nepal’s laws.

On the other hand, Abdul Awal Mintu, Chaudhary’s foreign partner and one of the foreign investors in Nepal, has been dragged into the investigation on the suspicion of money laundering in Bangladesh. According to Pandora Papers leaks, the information in Chaudhary’s autobiography needs to be examined to clarify the legal loopholes used by Nepal, the question of its legitimacy, and the fears of money laundering against Binod Chaudhary partners.

“The biggest challenge for me was to fill in the gaps left by the law. So that no one can raise legal questions about my foreign investment, ”said Chaudhary in his book titled ‘Binod Chaudhary: Autobiography’ published in 2013. For that, he has described the provision of ‘resident person’ of the Income Tax Act as a ‘hole’.

“Nepali citizens living abroad for more than 183 days of the year were treated as non-resident Nepalis. He was allowed to invest abroad, “Chaudhary said in his autobiography.” I took advantage of this and decided to stay abroad for more than 183 days a year and become a temporary citizen of my own country. Today, my two sons Rahul and Barun are doing business abroad as non-resident Nepalis. ”

However, according to Pandora Lex, investments have been made in the British Virgin Islands in the name of his wife Sarika Devi and eldest son Nirvana (both are Nepali citizens). That is, he and five members of his family have invested in Synovation Inc. in the British Virgin Islands. Singapore’s CG Hospitality Holdings Global PTE Ltd has invested in his three sons and wife. On the other hand, experts have commented that Chaudhary has invested abroad by misinterpreting the provisions of the Income Tax Act-2058 BS. The Income Tax Act stipulates that a person who has been in Nepal for 183 days or more in 365 consecutive days should be considered a ‘resident’.

“He has misused the system,” said Rameshwar Khanal, a former finance secretary. If a Nepali citizen stays abroad for 183 days, then if he earns income, only he can invest abroad. ” But Khanal responds that his claim is not ‘rational’ as Chaudhary has invested money abroad from Nepal.

“The dividend received by the foreign investors of Nabil Bank has been taken abroad,” Khanal said, “but he is the owner of that company.” He may have invested the same amount abroad. He is trying to confirm that the money taken from Nepal was earned by his sons living abroad. Which is wrong. ” On this basis too, the Chaudhary family has questioned the legitimacy of their investments abroad.

On the other hand, except for two sons (who are non-residents), investment abroad in the name of Binod, his eldest son Nirvana and his wife is illegal. Because the ‘Prohibition to Invest Abroad Act-2021’ does not allow investment abroad without the permission of Nepal Rastra Bank. According to an NRB source, Vinod, his eldest son Nirvana and Sarika have not sought permission from the Nation Bank to invest in some of the companies revealed by Pandora Papers.

“As the foreigner gifted 50,000 shares to the Synovation Company in the British Virgin Islands, Vinod has taken permission to have his name on it,” said a Nation Bank source. . ” In our search, the fact that Binod had sought permission from the National Bank to invest in any foreign company other than permission for Synovation was not found in the public records.

According to Pandora Papers, Binod said that he had gifted shares in Synovation, but other members of his family had also invested in it. Seeking proof of the last investor of this synovation, NRB has also stopped the dividend due to Nabil Bank of Nepal from 2076/77.

“Even if it is called foreign investment, the distribution of dividends has been stopped by the decision of the Board of Directors of NRB about a year and a half ago on the fear that the Chaudhary family may be the last investor of Synovation,” said an NRB source. Dividend distribution will continue until it is brought. ”

Chaudhary’s work is questionable not only from Nepal’s legal point of view but also from a global perspective. Official investments, such as those made by Chaudhary in tax havens, which do not require a source of wealth, are considered easy to set up, and are considered conducive to tax evasion, are being questioned globally. Because ‘it shows the shadow economy. That (offshore) is a shadow world.

This is a world that is already enriching the rich, “said Gerard Royal, director of ICIJ, in an interview with Alice Worthington of ABC Television in Australia. The offshore world is a powerhouse for criminals. Because they know that a crime can be hidden in two or more different levels through an offshore cell company. ‘

Over the past decade, tax haven investment has become a global issue. The details of Chaudhary’s global trade show that he started from similar countries. But Chaudhary has been taking the offshore business as a source of pride not only for himself but also for the country.

“If Kodak to Dabur can produce in Nepal, we should be able to produce it as well.” Nepal should also become a multinational company. It should be a symbol of Nepal and Nepali self-esteem. This is the birth of the mentality that there is no need to be petty, ”said Chaudhary in an interview with Nepali television channel Epivan on February 3, 2020.

According to the same interview, the Chaudhary family has invested in 122 companies in 50 countries by February 3, 2020. Established in Nepal under the name Chaudhary Group and CG Corp Global, they have 76 different brands around the world. Despite questions in the media and at the grassroots level about his mobilization of capital abroad, state bodies appear to be silent.

Chaudhary, who was considered close to the Panchayat and the royal palace in the past, has become an MP from two influential parties even during the republican period. In the Constituent Assembly election of 2064 BS, Chaudhary was made a Member of Parliament by the CPN (UML) from the proportional party.

Chaudhary, who later joined the Nepali Congress on the eve of the 2074 CA election, is now a member of the House of Representatives from the same party’s proportional quota. He is also the coordinator of the Congress’ Investment Infrastructure Employment Special Sub-Committee. The Congress has also launched a ‘Garikhane Abhiyan’ under the leadership of Chaudhary.

This is how Synovation was born in Tax Haven

According to documents from ICIJ, Synovation Inc. of the British Virgin Islands was initially invested in the name of Vinod Chaudhary’s wife Sarika. Sarika joined the company on February 22, 2001, as a shareholder by investing one US dollar each in the company, which is registered by the British Virgin Islands law firm Trident Trust. Then, on September 3, 2001, Nirvana Kumar Chaudhary (Nepali citizen), Chaudhary’s eldest son, appeared as a director in the company.

Sarika resigned as director on May 27, 2002, handing over her name to Yusuf Mohammad, a Pakistani national living in Japan. And, on May 27, 2002, the day the mother left, Rahul, Mahila’s son, entered as a director. What is interesting is that even the brothers have transferred shares to each other. On June 3, 2002, 24,998 shares of Synovation worth US dollars were issued in Rahul’s name. On June 3, 2002, the day Rahul bought the shares, Binod’s eldest son, Nirvana, bought the same number of shares of Synovation worth US २४ 24,999, according to ICIJ documents.

According to the details, about a year and a half later, on January 5, 2004, Nirvana transferred the same amount of shares worth Rs 24,999 to Rahul. Subsequently, on July 27, 2006, an additional US शेयर 1 share was issued in Rahul’s name from Synovation.

According to documents, Binod entered Synovation only in 2006. In other words, on July 28, 2006, he bought 50,000 shares of Synovation Inc. at the rate of one US dollar. On July 28, 2006, Binod’s eldest son, Nirvana, stepped down as director of the company. Later, on January 3, 2012, Binod also resigned from the post of director. And, on the same day, January 3, 2012, his youngest son Barun was appointed company director.

Another interesting thing is that when entering the company as a director, the legal identity of all five members of the Chaudhary family is Nepali. For that, everyone has used the passport issued from Nepal as their identity card. Rahul is seen as a constant investor and director in this company. Similarly, documents show that Barun has been a director of the company since 2012.

Rahul has been appointed to the company since August 24, 2009, as the alternate director of Abdul Awal Mintu, a US citizen, and Kamal Kishor (Sharma), a Singaporean. Synovation manages private assets, trades in foreign currency, and liaises with banks to manage its clients’ assets. The company seems to have handed over the communication work to Navin Jain.

Other directors of Synovation include Indian national Chandra Shekhar Jalan, Singaporean Kamal Kishor, Bangladeshi-American Abdul Awal Mintu (who is Mintu? Ha. Box), and Tilak de Joyja, who has not lived in the country but has been living in Sri Lanka. Similarly, Synovation’s director company is Hong Kong-based Capset Limited.

Of these, Kamal Kishor has a share of investment in Synovation. According to Binod’s autobiography, Kamal Kishor helped him to invest in Singapore. Who are the relatives of Sarika? According to Pandora Lex, Synovason appears to be a British Virgin Islands company named after members of the Chaudhary family.

A company called Sivan Holdings SA of Panama, a Central American country has also been found to be an ordinary member of Synovation. The company entered as an investor on March 14, 2003, by purchasing 18 million 85 shares of Synovation at the rate of one dollar per share. Later, on July 27, 2006, the company re-purchased 1,49,997 shares of Synovation and on August 25, 2011, it bought 9.8 million shares.

Thus, Revision Holdings SA bought a total of 28 million 34 thousand 997 US dollars worth of Synovation from March 14, 2003, to August 25, 2011. Meanwhile, on July 27, 2007, Sivage sold its 18 million 85 shares at Synovation at the same price (USD). After this, the documents have shown that 99.49 million 997 ordinary shares have been invested in the synovation of the division at the rate of one US dollar only.

It has been found that Sri Lankan citizen Tilak Dey (Deshbandhu) Joyasa CG Corp Global Sri Lanka, who is the director of Binod Chaudhary’s partner in Synovation, is the chairman. According to Tilak’s details published online in LMD The Voice of Business, in partnership with Vinod, he founded CG Corp Global Sri Lanka for the luxury hospitality business in the island region.

Synopsis by changing the name of the Singapore company

According to Pandora Papers, a company called Synovation in the British Virgin Islands was formerly known as Chaudhary Overseas Pte Ltd. According to a decision dated April 26, 2002, Chaudhary Overseas was renamed Synovation Inc. (H.P.). As of October 10, 2002, the authorized capital of Synovation Inc. was करोड 20 million, according to the records of the agent company Offshore Inc.

Similarly, the company was registered under the name of Enhanced Performance Limited before Chaudhary Overseas. Only on April 12, 2000, the name of Enhanced Performance was changed to Chaudhary Overseas PTE Limited.

Nabil is in the bank, a dubious investment of Synovation

According to the information received from the Nepal Rastra Bank source, the British Virgin Island Synovation Company is also revealed by Pandora Papers as a foreign investor of Nepal-based Nabil Bank Limited. For that, Chaudhary has set up various companies and invested in Synovation in Nabil.

Nabil owns 50 percent of the shares in NB (International) Limited, which is registered in Ireland. According to the Chaudhary Group website, NB (International), Limited is a subsidiary of Panama-based South Asia Financial Services Corporation. Abdul Awal Mintu, a U.S. citizen of Bangladeshi descent, owns 51 percent of the company, and Synovation Inc., which is registered in the British Virgin Islands, owns the remaining 49 percent.

Chaudhary has also been calling the shares ‘gifted’. But evidence shows that the company was set up in the British Virgin Islands by Vinod and his family. Which has been discussed above. On the other hand, Binod’s wife Sarika and eldest son Nirvana, who were found to have invested in Synovation, have never been non-resident Nepali citizens. This also shows that they have violated the law of Nepal.

NRB tightens after taking dividends

Billionaire Binod Chaudhary owns 0.5 percent shares in a company called Synovation, according to Nepal Rastra Bank. Binod’s income from this share must be brought to Nepal. But Binod had taken the dividend equivalent of that share abroad. “After he became a Nepali citizen, he should have kept the dividend in Nepal,” says Khanal, a former finance secretary. He seems to have tried to flee the capital. In which Rashtra Bank stopped. ”

NRB had questioned Chaudhary as to why the dividend money was taken abroad time and again. He then brought back 92,000 US dollars (1,764,000 Nepali rupees according to the current exchange rate) to Nepal. Even though the amount was returned to Nepal, the NRB has stopped the distribution of Nabil Bank’s dividend, demanding details of who are the last investors of Synovation. Behind that is the main controversy over Nabil’s Synovation and the Chaudhary family’s share investment in Synovation.

The Pandora Papers, the main investment of the Chaudhary family in Synovation, has made it clear. Vinod started the Synovation Company using his family members and some foreigners close to him. For example, two foreign nationals Mintu and Kamal Kishor (also an investor) were the directors of the company in Synovation, and the appointment of Rahul as their alternate director to Binod’s son Rahul seems to have kept the company in their hands. This has been further confirmed by the fact that Synovation was first operated in the name of Chaudhary Overseas.

Mintu also invests in synovation

Abdul Awal Minto, who has a 51 percent stake in Panama-based South Asia Financial Services Corporation, is also involved in the synovation, according to ICIJ’s Pandora Papers. Documents obtained from ICIJ show that he is a U.S. citizen of Bangladeshi descent and has been the director of Synovation since 2003. His ‘residential address’ at the time was revealed by ICIJ in Dhaka, Bangladesh.

Abdul Awal Mintu, who is linked to the Chaudhary family’s foreign investment from Nabil Bank, has emerged as a suspect. According to a report published in Bangladesh’s online portal The Financial Express on November 5, 2018, the Bangladesh Commission of Inquiry into Corruption (ACC) had investigated Nabil’s main investor and Abdul Awal Mintu of NB International.

He was accused of laundering money and taking money out of the country. The commission had accused Mintu of colluding with banks based on fake documents, making money from unknown sources, and smuggling money out of the country.

Mintu is a former president of the Federation of Bangladesh Chambers of Commerce and Industry. According to the report, he was known to be close to the current Prime Minister of Bangladesh Sheikh Hasina in the 1990s. But later he became closer to the Khaleda Zia-led Bangladesh National Party (VNP). At the same time, Mintu also became the vice president of VNP.

According to a report published in the Dhaka Tribune on February 28, 2021, the High Court of Bangladesh had sought a list of money launderers smuggling money abroad. The court was also asked to inform the concerned authorities about the steps taken to bring back the money laundered from the country.

According to the report, two high court judges had sought an explanation as to why they were not investigating the Bangladeshis named in the Paradise and Panama Papers. On behalf of the commission, lawyer Khurshid Alam said that they were investigating the names of the people, including Mintu, whose names were made public in Panama and Paradise Papers.

Mintu’s name was made public by ICIJ in 2017 in Paradise Paper. He was accompanied by his wife and three sons in Paradise Paper. Details of Mintu and his family members being linked to NFM Energy Ltd., a gas company in the tax haven country of Bermuda, were made public at the time. According to the leak, Mintu is also an investor in NFM and chairman and director of the company.

According to Synovation’s website, Binod Chaudhary and Mintu are founders and board members of a company called Synovation Group, which operates in countries including China, Singapore, and Thailand.

A report on Nepal’s banking sector has also shown that Mintu is a promoter of Nabil Bank and a Class A shareholder.

CG Hospitality Holdings Global’s investment is questionable

It has been found that there is another offshore company owned by the Chaudhary family. It has been found that Vinod Chaudhary’s son Rahul Chaudhary has invested in CG Hospitality Holdings Global Pte Ltd in Singapore. The company was registered in 2011. Before that, the company had a share capital of २६ 2.6 million, operating under the name Zinc Hospitality Global PTE.

According to the Accounting and Corporate Regulatory Authority of Singapore, Rahul Chaudhary is the director of the company. He has been with the company since 2011, using his Jumeirah Island address in Dubai.

Along with Rahul, other directors of the company include Binod’s wife Sarika Devi, eldest son Nirvana Kumar Chaudhary (both are Nepali citizens), and youngest son Barun Chaudhary. Sarika and Nirvana have used Kathmandu and Barun’s address on Jumeirah Island in Dubai to invest in the company.

CG Corp., a Panama-based company, has invested २६ 2.6 million in CG Hospitality Holdings Global. Sarika has been with the company since 2013 and everyone else has been a director since 2011. Cheng Kimyan, a Singaporean, has been the company’s secretary since 2018.

According to OpenCorporates, Barun and Rahul are directors at CG Corp in Panama, while Tilak de Joyja (who is a partner in CG Corp Global, Sri Lanka) and other foreign nationals are investing. The fact that the Chaudhary group’s CG Corp is based in Panama suggests that their investment is in another country, such as the British Virgin Islands, which is prone to tax evasion.

CG Hotels & Resorts Limited

According to the documents of OMC Group (a company providing services including company registration) obtained by ICIJ, Barun and Rahul Chaudhary have set up another company in the British Virgin Islands using a Nepali address. They have been found to have done business by opening CG Hotels and Resorts Limited Company. Both are directors of this company.

It has been revealed that the company also operates services from Haryana, India. According to a BVI Financial Services Commission document obtained by Khopke from ICIJ, the company had appointed Barun as a director in 2016 to serve from Haryana, while Rahul had been appointed in 2007. CG Hotel & Resort is a company registered in 2007 in the British Virgin Islands.

According to the records of OMC Group, a meeting of the directors of CG Hotels and Resorts Limited was held on January 21, 2019. The meeting was chaired by Rahul and Barun was the secretary. The purpose of the meeting was to transform the registration office of CG Hotels and Resorts Limited and the registered agent Overseas Management Company Trust (BVI) Limited. Both Barun and Rahul are the beneficial owners of the company.

The meeting passed the proposal as per the objectives of the company. And, the company’s registered office and agent were relocated to Trust (BVI) Limited, an overseas management company in the British Virgin Islands. Barun and Rahul have their taxpayer address in the United Arab Emirates (UAE).

It has been found that Synovation Inc. has also invested in CG Hotels and Resorts Limited. On February 2, 2007, Synovation bought 67 shares of CG. The company then bought 33 shares of CG in 2009.

The company then moved away from investors in 2015 by transferring shares to Singapore’s CG Hospitality Holdings Global Pte Ltd.

The Singaporean company entered CG Hotels & Resorts Limited on August 20, 2015, as an investor by purchasing 100 shares at the rate of one US dollar. The company has invested 67 shares in the first phase and 33 shares in the second phase.

FG Frederick Henry Louis Flegate-Simon, a Singapore-based company, entered CG Hotels & Resorts Limited as an investor on February 2, 2007, by purchasing 15 ordinary shares. Then, on June 10, 2009, a company called Frederick Henry Lewis transferred 15 shares of the resort to Binod Chaudhary’s Synovation Inc.

Pacific Century Capital Limited of the British Virgin Islands entered the resort as an investor by purchasing 18 shares on February 2, 2007. However, documents obtained from ICIJ show that Pacific Century transferred the 18 shares to Synovation Inc. on June 10, 2009.

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