An Express investigation into the Pandora Papers reveals how individuals and businesses are pushing the envelope to evade detection, using loopholes in the law at home and the lax jurisdiction of tax havens. Niranjan Hiranandani, the founder of Mumbai-based real estate major Hiranandani Group, and key members of his family were beneficiaries of a Trust with assets of over $60 million.
Niranjan was the “reserve director” in at least three firms set up in the British Virgin Islands (BVI) by his Dubai-based son, records in the Pandora Papers investigated by The Indian Express show.
The BVI Business Companies Act provides for the nomination of a reserve director to act in the event of the death of the sole director of a company.
Records of Trident Trust Company investigated by The Indian Express show that Hiranandani’s son Darshan Hiranandani, 39, set up at least 25 companies as a director and The Solitaire Trust as the settlor in the BVI between 2006 and 2008.
In subsequent years, the shareholding of these companies were transferred to The Solitaire Trust, which had assets of over $60 million by May 2017.
Responding to queries mailed by The Indian Express, Darshan Hiranandani said: “It is my personal trust that has built up assets since 2007. Any money routed to the trust is money sent by me.”
Trident Trust records show Hiranandanis as beneficiaries of The Solitaire Trust Darshan Hiranandani was also one of the trust’s beneficiaries, along with his father Niranjan, mother Kamal, sister Priya, The Hiranandani Foundation and the Issue (descendants) of the settlor.
While Darshan was the director in most of the BVI firms he set up until 2008, his father Niranjan was a “reserve director” in at least three of them: Hircon (BVI) Limited, Horizon Hotels (BVI) Limited and Burke Consolidated.
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Records do not list any noticeable business being conducted by the 25-odd BVI companies, except for a key transaction by one of them, District Holdings Limited: the lease in 2008 of a Bombardier Challenger 850 CL-600-2B19 aircraft from Game Aviation FZC in UAE through an agreement with UBS AG.
Darshan was on the board of District Holdings until July 2008 and held 1,000 shares till May 2013. These shares were transferred to Harris Worldwide, a shareholder in a number of companies registered in BVI through Trident Trust, and further to Nogard Associates Limited in June 2013.
As for The Solitaire Trust, it initially had 1,000 shares each at $1 in two of these BVI companies: Pin High Holdings Ltd and Plainsailing Investments Limited. Subsequently, the Trust received shares of other companies, too.
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Records show that the Trust’s settlor, Darshan paid an annual Trustee fee of $3000 between 2008 and 2015.
However, Trident Trust Company proposed to increase the fee in line with the increase in assets.
In May 2017, the Trident Trust Company wrote to Darshan and an employee of his Dubai-based company Hircon International: “We confirm that our Trustee Fees will be increased to correspond with the value of the Trust Fund, commencing this year: US$11,500.00 per annum – representing assets ranging from US$60M to US$100M. Unfortunately, we cannot continue to provide Trustee Services at the bare minimum of US$3,000.00 per annum, representing assets up to 5M,” the email stated.
Records show that Hiranandani and his son resigned from the directorships of most of these companies by July 2008. In subsequent years, the shareholdings of these companies were transferred to Trident Trust as Trustee of The Solitaire Trust.
Responding to queries from The Indian Express, Darshan Hiranandani, in a statement, said: “Solitaire Trust is my personal investment vehicle and Niranjan Hiranandani (and/or the Hiranandani Group in India) does not have anything to do with formation, funding or operation of the Trust at all. My father was never ever the beneficial owner but a discretionary beneficiary. He (or my mother) have never ever received any benefit ever (directly or indirectly).
“Given the Shariah law regime, it was hard to have a trust vehicle in Dubai for my businesses. Hence, Solitaire Trust was created by me. It is my personal trust that has built up assets since 2007. Any money routed to the Trust is money sent by me.”
Referring to his business, he said: “I have been a non-resident Indian in Dubai since 2004 and I established my own property business in Dubai in 2004. These funds are used by me to invest and grow businesses… I have been doing my business overseas using BVI Companies… I personally make all relevant disclosures and disclosures of all its investments in India.”
On the aircraft lease, he said: “District Holdings was a company owned by me overseas. The Hiranandani Group (namely Niranjan and Surendra Hiranandani) have nothing to do with it. The aircraft lease was relinquished in 2012.”
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