Controversial arms dealer Sanjay Bhandari, under investigation for possessing classified information on India’s defence purchases, forged documents to move assets worth Rs 150-crore to a dodgy Dubai-based trust, three income tax officers said on Monday.
The officials are involved in investigating whether Bhandari evaded taxes, and are not authorised to speak to journalists. Much of their information was gleaned from documents recovered from Bhandari’s chartered accountant Sanjeev Kapoor, who was detained by tax officials last Thursday on his way back from London where he allegedly met the arms dealer.
The income tax (I-T) officials said Bhandari took over a United Arab Emirates-based unregistered trust called Al-Raham, and forged letters to show that he was the “executioner” of the trust. Bhandari also nominated his London-based nephew, Sumit Chaddha, as his successor at the trust, they said.
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“This has been done in order to insulate his assets from being taken over under the black money act. This could also be done to bring deniability of holding benami properties,” one of the I-T officials told Hindustan Times on condition of anonymity.
Emails sent to Bhandari’s official ID did not elicit a response. Kapoor could not be reached as he was being held for questioning by I-T officials. An email sent to a south Delhi-based law firm representing Kapoor remained unanswered till the time of going to press. Officials said the law firm was also raided by tax officials at the weekend.
Tax authorities said the Al-Raham Trust has assets worth Rs 150 crore in various places in India, London and Dubai.
Bhandari appeared on the Delhi police’s radar after top secret defence documents were recovered from his office and home in June last year. A case was filed under the Official Secrets Act (OSA). Separately, I-T and Enforcement Directorate also launched investigations to find out if he had evaded tax or siphoned off money abroad.
In November, Bhandari failed to turn up before Delhi police for questioning. Investigations then revealed he had fled India, possibly to London.
I-T investigation documents accessed by HT showed that tax officials had recovered from Kapoor a receipt of 50,000 UAE dirhams and an agreement to pay 35,000 UAE dirhams every year to a “name lender”. Many tax havens operate paper companies through officials who hold shares in the name of ultimate beneficiary and are often referred as “name lenders”.
The tax officials have also recovered a pen drive from Kapoor which carried soft copies of purported letters exchanged between Bhandari and an Arab name lender for the trust.
The letters are dated as far back as 2006. But forensic analysis by I-T officials showed they were first drafted in October 2016 and the last print out was taken early this month.