Saturday, September 29, 2012

Mystery: BEML, Tatra Sipox and Venus Projects payments routed to tax haven

BEML payments to UK Tatra Sipox for deal routed to Rishi's Hong Kong firm
Josy Joseph, TNN Aug 11, 2012, 02.48AM IST
NEW DELHI: Investigators are bewildered by the strange financial relations between Tatra Sipox UK, the British company that had been supplying Tatra trucks to BEML, and another company in Hong Kong controlled by the controversial NRI businessman Ravi Rishi.
The CBI is investigating irregularities in the purchase of all-terrain Tatra trucks by defence public sector unit BEML for the Indian military. Allegations of irregularities in the deal were sent to CBI for investigation by defence minister A K Antony earlier this year, but it hit headlines after former Army chief General V K Singh claimed that he was offered a bribe of Rs 14 crore to approve purchase of a new batch of Tatra trucks.
Rishi, who controls Tatra Sipox UK and is the prime accused in the CBI FIR into the Tatra scandal, recently moved the Supreme Court seeking permission to travel abroad. CBI has opposed the demand.
What brings a mysterious twist to the Tatra scandal is the relation between Tatra Sipox UK and Venus Projects Ltd of Hong Kong. Venus is controlled from the secretive tax haven of Liechtenstein.
Investigators have been given details by banks and others concerned to establish that every time Tatra Sipox received a payment from BEML, the entire amount was immediately transferred to the account of Venus. In return, Venus gave Tatra Sipox just a 1% commission. "Tatra Sipox was just a transaction handling agency with no powers at all," a source said.
To make the entire transaction easy, both Tatra Sipox and Venus had their bank accounts with Canara Bank in London, and operated them in euro currency. In fact, on February 6, 2007, BEML agreed, for strange reasons, to change the procurement currency from dollar to euro, which led to significant loses to BEML over the next few years. Once BEML issued payments in euro, there was no currency conversion costs on either Tatra Sipox UK or Venus Projects.
With the fresh revelations that Tatra Sipox did not even have the right to decide on the payments received from BEML, the attention should shift to Hong Kong-based Venus Projects. According to documents of Venus Projects until 2011, all the shares of the company were held by Deswa Holding Establishment based in Liechtenstein.
By January 2012, Tatra Sipox was fully owned by Vectra Ltd, which in turn was also run by a trust in Liechtenstein.
BEML had signed a contract with Tatra Sipox in 1997 for a 10-year period for the supply of the all-terrain trucks and its parts. In 2003, four years before the contract expired, the PSU renewed its contract with Tatra Sipox to extend the "scope of working relationship", according to the CBI FIR into the case.
BEML is believed to have told the defence ministry that it was entering into a contract with a fully-owned subsidiary of Tatra AS, the Czech manufacturer of the all-terrain trucks. However, CBI is now convinced that Tatra Sipox UK had nothing to do with the original equipment manufacturers.
And with the latest revelations of Venus Projects being the real 'controlling authority', the Tatra contract has assumed more complex hues. Tatra Sipox emerged on the scene after the collapse of Czechoslovakia into Czech Republic and Slovakia. The company was incorporated in UK in 1994.
BEML payments to UK Tatra Sipox for deal routed to Rishi's Hong Kong firm
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