On January 16, 2019, the Caravan Magazine published a story mischievously titled The D-Companies. While I had initially thought that they had found something interesting to report about some notorious and elusive underworld don, it turned out to be a long story about the sons of National Security Advisor Ajit Doval. While the story was long in terms of words, it was short in terms of evidence. However, it did bring to the forefront the issue of the menace of offshore tax havens to the Indian economy.
All these examples are from the era of UPA-1 when the evil genius P. Chidambaram was the finance minister. So Mr. Jairam Ramesh, will you demand an inquiry by the RBI into all the FDI that was proudly brought into India by Mr. Chidambaram which had the Cayman “connection”?
On January 17, 2019, one day after the story was published on the Caravan’s site, Jairam Ramesh called a press conference and demanded that the Reserve Bank of India (RBI) disclose details of investment coming from the Cayman Islands, especially because the Caravan story had mentioned that Vivek Doval’s hedge fund was based out of Cayman. There was also a strong suggestion that the Foreign Direct Investment (FDI) from Cayman increased dramatically immediately after demonetization. Not surprisingly, Vivek Doval was quick to file a criminal defamation complaint against Jairam Ramesh and Caravan.
What about the Chidambarams?
Thank you, Jairam Ramesh, for bringing to the forefront the issue of how tax havens such as Cayman are used to evade taxes and launder money. However, you have twisted the facts to give an illusion that money started flowing in from Cayman suddenly post demonetization, and have tried to suggest that the Cayman route was used to launder black money in the wake of demonetization. Nothing can be farther from the truth.
Cayman has been a popular tax haven jurisdiction for funds given its secrecy provisions, negligible tax and the “ease” of setting up and running business entities. In fact even though officially the majority of FDI in India has been reported to have come from Mauritius for many years, the truth is that in many cases Mauritius was used just as a conduit to avail the benefits of the Double Tax Avoidance Agreement (DTAA) with India – in such cases the actual funds were set up in Cayman.
Figure 1. Shell company layering
Read the ongoing a series on the menace of tax havens. In that series, we have illustrated various schemes used by the offshore industry to evade taxes by using real examples (including friends of Karti Chidambaram who also used the same Cayman firm – The Walkers, as Vivek Doval). Notice how Cayman is at the core of all these structures – and all the money seems to be “originating” from Cayman. All these examples are from the era of UPA-1 when the evil genius P. Chidambaram was the finance minister. So Mr. Jairam Ramesh, will you demand an inquiry by the RBI into all the FDI that was proudly brought into India by Mr. Chidambaram which had the Cayman “connection”?
 Reveal names of investors from Cayman Islands: Congress – Jan 17, 2019, TheHinduBusinessLine.com
 NSA Ajit Doval’s son accuses Caravan magazine, Jairam Ramesh of defamation, moves court – Jan 21, 2019, TimesOfIndia.com
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