Trailing The Panama Trail - Story from India

The Panama Papers: The untold India story of the trailblazing global offshore investigation

                             Authors: Ritu Sarin, Jay Mazoomdaar and P. Vaidyanathan Iyer 

                            Publisher: Penguin Random House  2019 

The book revolves around the leaks of the financial and legal documents of Panamanian law firm "Mossack Fonseca" by ICIJ (International Consortium of Investigative Journalists)  
ICIJ took up many projects to leak and investigate the few cases involving public interest like Paradise Papers, Panama papers, Swiss leaks, Luxembourg leaks etc which are related to public policy and shaped discourses in public life revolving around misuse of legal and regulatory framework in different countries.

Indian Express newspaper from India collaborated in the project by deputing the team of journalists namely Ritu Sarin, Jay Mazoomdaar and P. Vaidyanathan Iyer. This book is a recap of the process and findings by the trio. The book is divided into 13 chapters with a detailed introduction by the authors on the role and nature of investigation, code of ethics of ICIJ and secrecy around the project which will help in understanding the constrained atmosphere they had to work and limitations imposed due to secrecy.

Chapter 1 titled "Great Expectations" is basic introduction on how the three journalists were roped in by Indian Express which was collaborating in ICIJs unnamed project. The initial name of the Panama papers investigation was "Project Prometheus". A project which was going to affect the mighty and those in power and who's who across the globe was to kept secret till date of publication which was to be coordinated globally to avoid selective leakage. 

Chapter 2 titled "In White and Black" starts with the history of taxation in India and abroad tracing origins from Mesopotamia, Egypt and India. It also discusses how evasion and avoidance of taxes was prevalent then. From indirect taxes, taxes on agricultural produce and sales tax, inheritance tax to todays' complex system. The book provides anecdote regarding first rebellion by nobles of Aquitaine over tax riots in England in 1647. The tax on income was imposed first in Britain for a period of one year in 1842 as temporary measure to tax those with income above Pounds 150 annum. Infact the Income Tax Act of Britain expires every year on 5^th April and is renewed through annual finance acts. This is a very interesting and must read chapter which gives beautiful trivia related to tax and economy.

Chapter 3 “Taking the plunge” Making sense of the biggest leak ever and Mossack Fonseca (MF) discusses the modus operandi of MF. Being a secret project the utmost precaution and confidentiality was expected as any hint or leak may jeopardize not only the India related stories but will have ramifications over 250 reporters of ICIJ. The details of Mossack Fonseca and its network across nations though not formally operating in brick-mortar but through network of CA and Law Firms who acted as first point of reference

The chapter The Deep Dive discusses the names which were initially thrown up by the cursory search and how they were narrowed down through information to names like Lokesh Sharma, IPL fame, Rosy Blue diamond group of Mehta’s, Gehlaut family of India Bulls, PRS Oberoi of Oberoi Hotel fame. The detailed follow ups on each case are discussed in latter part of the book. 

Chapter 5 titled as “Knocking on Doors” and Chapter 6 “Hits and Misses” details the further investigation on the names coming in preliminary searches. The team divided the names into 3 categories as firstly those which were public figures and renowned corporates which were easily verifiable. Second category belonged to those names which were not prominent and were fronts of their employer’s family which required spot verification. This was done through network of already existing reporters of Indian Express. In few cases, the trio of Ritu Sarin, Jay and Vaidy themselves embarked on the process of verification of antecedents of the persons whose name appeared in the list and their experience is like one which the investigators of Income Tax dept come across often in their line of duty. The verification was to be conducted not only in Delhi but in Kolkata, Mumbai, Hyderabad etc. with confidentiality and 100 % accuracy. Each of the trail is an interesting read.

Some major breaks worldwide include names like Nawaz Sharif, former PM of Pakistan, Amitabh Bacchan and Aishwarya Rai, DLF Family head K.P. Singh, Gehlaut family of India Bulls, Vinod Adani, Niira Radia and IPL saga, Umesh Shahra of Ruchi Soya (now bankrupt) Fame among others. Infact, these leaks have caused some serious political upheavals across globe however their impact was limited in Indian Political space.

 

The last part of the books deals with the response of Government of India which is in public domain like instituting Multi Agency Group comprising CBDT, FIU, RBI etc. The veil of corporate secrecy and how in most of the cases it was the violation of domestic laws and regulations. 

 

The book is an excellent piece of investigation as well as it guides through basics of taxation from Acts  to case laws and case study. For people like me who worked in Investigation Directorate of Income Tax Department these are real life scenario’s whether be it a domestic case of tax evasion through innovative means or foreign bank accounts held without disclosing it to the tax authorities which is mandatory as per law. Still it can be made a compulsory read for Tax sleuths. 

This book is also a must read for people related to corporate and finance world to take Buddhas' message home that "Three things cannot be be hidden for long The sun, the moon, the truth”. So, no point in devising an escape. Law will catch you soon. This book is equally important for students of journalism so as to get them an idea of investigative journalism and convey that no story will reach you unless you step out of your cubicle to find one. This piece gives you reason to think as to why people the rich and wealthy find it tempting to open foreign bank account inspite of very competitive tax rates unlike in 1970s. Most of the accounts, offshore vehicles were incorporated post 1990’s when economy was liberalised. Merely opening of subsidiary or bank account is not illegal per so. It becomes one when there is no disclosure mandated by law. We know this is not the first expose nor the last one. 

Respect to the Indian Express and its team of journalists Ms. Sarin (more for she lost her spouse during the expose itself), Vaidy and Jay who pursued the lead and acted in confidential and devised their own strategy. The book like these are awards in itself to the writers for they have wider impact on public issues and policy matters concerning whole country as to how the system was manipulated through tax frauds, bribery, corporate jugglery and financial misreporting which can lead to distrust in system per se.

So, if you have an even an ounce of interest in the corporate world and investigative journalism, then this is must read.

 

 

 

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