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Paradise Papers: Firms named in leak under Sebi lens for fund diversion

To start with, the stock exchanges and the regulator would ask the listed companies concerned to provide details about any offshore entities linked to them

Press Trust of India  |  New Delhi 

Sebi

Markets regulator Sebi will look into alleged fund diversion and corporate governance lapses at various listed firms and their promoters, including those linked to Vijay Mallya, named in the leaked 'Paradise Papers'.

While some entities linked to Mallya are already being probed by Sebi and other agencies, any fresh disclosure in the leaked documents made public by (International Consortium of Investigative Journalists) would be thoroughly looked into, senior officials said.

The disclosures about other listed firms and those associated with them or their promoters would also be looked into for any irregularities including about corporate governance and disclosure norms, the officials added.

Officials maintained that mere presence of any Indian entity in an offshore tax-friendly jurisdiction may not amount to violation of laws, but non-disclosure about such entities and routing of funds to them could be ascertained only after a thorough investigation.


To start with, the stock exchanges and the regulator would ask the listed concerned to provide details about any offshore entities linked to them, which would be then matched with the statutory and regulatory disclosures made by those including in annual reports and other filings.

Sebi will also coordinate with other regulators and government agencies, while information would be sought from foreign regulators if required, one official said, while adding that a structured multi-regulatory approach could be discussed at FSDC (Financial Stability and Development Council) or other such forums.

The 'Paradise Papers' investigation, carried out by along with media partners across the world including the Indian Express, has unveiled offshore activities of some of the world's most powerful people and after exploring 13.4 million leaked files from offshore law firms and the company registries in some secretive countries.


The leaked files, including those from offshore law firm Appleby, purportedly provide details of tax planning by nearly 100 MNCs, while more than 700 Indian and individuals are said to be among those named in the list.

Among other Indian entities, Sebi is already probing various aspects about Mallya and his erstwhile listed firms, while some directions have also been passed in certain cases.

Recently, the Securities Appellate Tribunal asked Sebi to expeditiously pass a fresh order in the matter relating to Diageo Plc requiring to make additional payments to the minority shareholders of United Spirits Ltd (USL).


Diageo became a controlling shareholder of USL -- whose erstwhile promoter was now fugitive Mallya -- in May 2013 with 25.02 per cent stake after completion of a Rs 3,134.56 crore open offer.

Among the firms that have cropped up in the leaked list of 'Paradise Papers', shares of went down by 2.32 per cent on BSE, lost 2 per cent, fell by 1.82 per cent, dropped by 1.74 per cent, declined by 1.57 per cent and dipped 0.88 per cent.

On the other hand, shares of USL rose by 1.19 per cent on BSE.


Meanwhile, NGO Transparency International called for stricter measures to regulate the financial sector and their participants, including real estate brokers, lawyers, and bankers.

First Published: Mon, November 06 2017. 15:05 IST
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