Industrialist Prakash Hinduja fined 157 million francs (Rs.1270 crore) for tax violations by Geneva Court

Of late, some Indian industrialists are bringing a bad name to India for opening secret accounts abroad or caught for tax evasions on foreign soil. A few days ago, Anil Ambani was caught for secret Swiss banks accounts[1], Swiss media has reported that a court in Geneva has fined Indian industrialist Prakash Hinduja 157 million francs (Rs.1270 crore) for tax violations. According to Swiss newspaper Gotham City and Le Temps, Geneva Court fined Prakash Hinduja for claiming tax exceptions showing his Monaco residency, while he was actually living in Geneva. “The Geneva tax authorities suspect the billionaire of Indian origin Prakash Hinduja of having continued to stay in his villa in Cologny (GE) until April 2018, when he had officially settled in Monaco in 2007,” reported Gotham City[2].

“In July 2018, the Geneva public prosecutor sought to collect information on Prakash Hinduja and members of his family on behalf of the cantonal tax authorities, in the context of criminal proceedings, according to a judgment of the Federal Court rendered on April 21. (5A_1042/ 2020). In April 2019, the Federal Tax Administration opened its own investigation into this case, which targets several individuals. The following month, the Geneva tax authorities declared two receiverships, amounting to 154 million francs for cantonal and municipal taxes, and 3 million for federal taxes,” reported Le Temps[3].

Ajay Hinduja has denied any wrongdoing and the Geneva prosecutor’s office confirmed that he had challenged the Swiss term in French an Ordonnance pénale or criminal order and the matter is due to be heard in court but has been delayed due to Covid.

A few months back, apart from Swiss newspapers, London and Mauritius newspapers reported the charges by Geneva and Mauritius tribunals against Prakash Hinduja’ son Ajay Hinduja. The newspapers reported the illegalities in holding companies in Mauritius which controls the entire firms of Hinduja Group. Apart from the violations in Mauritius, the Sunday Telegraph of London reported in detail, alleging a case of forgery against billionaire businessman Ajay Hinduja has added to problems for one of India’s richest families. PGurus in February reported this matter in detail[4].

According to the story published on Sunday, 7th February, Ajay was subject of a criminal order in a Geneva court in December 2019 on a charge of forging a document at a bank. The Swiss prosecutor believed there were grounds to proceed. Ajay Hinduja has denied any wrongdoing and the Geneva prosecutor’s office confirmed that he had challenged the Swiss term in French an Ordonnance pénale or criminal order and the matter is due to be heard in court but has been delayed due to Covid.

The legal eagles engaged in the settlement of the family dispute, the four brothers Sirchand P Hinduja, Gopichand Hinduja, Prakash P Hinduja and Ashok P Hinduja are for the past two years bickering over the transferring of shares to the next generation. Now the family tussles have led to the youngest Ashok Hinduja and Prakash Hinduja’s son Ajay facing legal troubles in Mauritius and Geneva courts. According to lawyers, eldest brothers Sirichand and Gopichand are unhappy with the younger brothers handling the affairs of the companies across the World.

The family disputes started in November 2020, when Ajay stood for re-election as Director in the Annual General Meeting of the Mauritius-registered company IndusInd International Holdings Ltd or IIHL. His uncle, Ashok Hinduja who lives in India chairs the board. Other elder brothers are settled in London and Switzerland. In India, Hinduja Group controls Ashok Leyland, IndusInd Bank and Gulf Lubricants. The Indian origin conglomerate having business across the world was started by late PD Hinduja in the early 1940s. The Hinduja Group’s companies are controlled by holding companies situated in tax havens like Mauritius and Geneva.

Dissenting shareholders say they voiced their objections at the meeting, and have now written to both the Mauritius Financial Services Commission and the Registrar of Companies, asking them to investigate “a serious failure of governance at IndusInd International Holdings”, and claiming the forgery case might disqualify Ajay at law and under and the company’s constitution. Mauritian authorities have confirmed receipt of the letter, according to CAJ News reporting from Mauritius.

Recently PGurus reported a series on the role of the elder three Hindujas in the Bofors kickback scandal[5].

References:

[1] Big win for Indian Government. Swiss Court directs to reveal secret bank accounts of debt-ridden industrialist Anil Ambani, wife and sons – May 14, 2021, PGurus.com

[2] Geneva tax authorities claim 157 million from billionaire Prakash Hinduja – May 05, 2021, Gotham City

[3] Billionaire Prakash Hinduja in the sights of the Geneva tax authorities – May 6, 2021, Le Temps

[4] Family disputes galore in Hinduja Group. Mauritius and Geneva authorities initiate action against Ashok and Ajay Hinduja – Feb 19, 2021, PGurus.com

[5] The Shrouded Bofors Scam – A sad tale of institutional collapse, criminal sabotage and a contrived dead end, but…? – Sep 25, 2020, PGurus.com

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