But the Centre for Investigative Journalism Nepal says politicians seem to be colluding with their business partners because there has been no investigation after its 2019 NepalLeaks revelation of the Panama Papers that brought out names of dozens of Nepalis with unlawful offshore companies.
‘The silence of the regulatory bodies appears to be encouraging the Nepalis’ investment in tax haven countries. Pandora Papers is an outcome of that surprising silence,’ CIJ says.
The other prominent Nepali business house implicated in the Pandora Papers is the Golchha Organisation. Leaked documents show it also has offshore companies in the British Virgin Islands (BVI) under the names of its patriarch Lokmanya Golchha, his brothers late Diwakar Golchha, late Mahendra Kumar Golchha, cousin Chandra Kumar Golchha and Diwakar’s son Hitesh Golchha.
Leaked documents examined by CIJ show that a Geneva-based law firm named Overseas Management opened an account at Barclays Bank in Switzerland in 2008 on behalf of Flatwood Limited operated by Golchha family members. The paper trail also shows that Diwakar Golchha bought shares of Eastern Sugar Mills Limited in Nepal in 2008 through Flatwood Limited.
Golchha Organisation is one of the pioneer industrial houses in Nepal and its founders established the Biratnagar Jute Mill nearly 70 years ago. In fact, the 2019 NepalLeaks mentioned that Golchha Organisation was the first Nepali company to bring in foreign investment from the British Virgin Islands through Flatwood to operate companies in Nepal.
Earlier CIJ investigations in 2017 showed that in a questionable deal, Golchha’s Eastern Sugar Mills was allowed by the Tax Settlement Commission to get away with paying only Rs400,000 when it owed the treasury Rs52 million in back taxes.
Two members of the Commission and the director of the Inland Revenue Department are still facing corruption charges in the Special Court for granting allegedly illegal tax breaks to the Golchhas.
Like Binod Chaudhary, Diwakar Golchha was also nominated by the Nepali Congress to the Constituent Assembly-Parliament in 2008, showing the political links of many of the businessmen named in the ICIJ documents.
The other person with close links to Maoist Centre leaders is Ajeya Sumargi Parajuli, who was exposed in the CIJ NepalLeaks for allegedly transferring money from Nepal to tax havens the suspected ill-gotten wealth of politicians. The papers also showed that Sumargi’s Zhodar Investments in BVI transferred $48,372,222 to his companies in Nepal in 2010. Zhodar’s co-owner is Cyprus national Sotirios Pittas, a lawyer and Sumargi business partner, the leaked documents show.
According to Pandora Papers, Sumargi also invested in Worldwide Incredible Limited in the BVI in 2011, and several other companies based in the tax haven. Some of the monies from BVI have been transferred indirectly to Sumargi’s companies in Nepal, including Hetauda Lime Industry Pvt Ltd, Everest Mineral Products Pvt Ltd, Muktishree Pvt Ltd, according to the Pandora Papers.
CIJ also found leaked documents that show Sumargi’s other company, The New Digitek getting permission to hold 50% share in Nepali mobile companies, including Nepal Telecom Private Limited.
Among the Pandora Papers is also a slew of email correspondence from BVI lawyers at Trident Trust Limited who warned that action would be taken if Sumargi did not provide mandatory details for Zhodar Investments.
While poring through the Pandora Papers, CIJ’s investigative journalists Krishna Acharya and Ramu Sapkota found that Sumargi’s business partner in Nepal, Arjun Prasad Sharma, also registered a company in BVI in 2019.
In a convoluted money trail that involved several other shell companies, Sharma and Sumargi are seen to have worked in 2019 with the same Cypriot investment company, Sotioris Pittas & Co LLC.
The other prominent people named in the Pandora Papers leaks is Radhe Shyam Saraf and his family, who own the Taragaon Regency Hotel and Yak & Yeti Hotel in Kathmandu. The documents that CIJ reviewed appear to show that the family has channelled money through companies in the British Virgin Islands to invest in Nepal.
CIJ also found documents in the leaked papers showing that the Saraf family are involved in companies in Belize, Lichtenstein and Mauritius and there appear to be questions regarding their investment in Hyatt International.
Saraf had already been embroiled in controversy in Nepal over the Taragaon property and has been investigated by the Office of the Auditor General, the anti-corruption agency and the Ministry of Tourism.
The other Nepali businessmen mentioned in the Pandora Papers who have invested in suspected shell companies offshore tax havens include Rajendra Shakya, Purushottam Poudyal, Sudhir Mittal, and others.
Detailed report on the Pandora Papers in Nepali and English of the Centre for Investigative Journalism Nepal (CIJ): https://cijnepal.org.np