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Tuesday, October 22nd, 2019

MiG Corp and others paid millions to man under CBI, ED probe

by October 31, 2016 General

NEW DELHI: Companies associated with the son and a close relative of Sudhir Choudhurie, an Indian origin British citizen currently being investigated by CBI and ED and whose name figures in CBI’s list of “undesriable” middlemen, received hundreds of millions of dollars from Russian arms manufacturers in 2007-08.

ET accessed a confidential report commissioned by Credit Suisse that shows the Choudhurie “family group” – as the report described it – had 18 accounts in the bank. The accounts are, jointly or individually, in the names of Choudhurie’s son, Bhanu Choudhurie, and his cousin, Aman Chopra.

Russian companies making payments include Russian Aircraft Corporation MiG, Rosoboronexport and NPO. All these firms have significant business interests in India. The Credit Suisse report does not link payments to any specific defence deal in India. But the report notes the payments are “incoming funds from clients offset business”. In the AugustaWestland corruption case, part of the payment to middlemen were described as offset payments, according to the judgment of an Italian court.

Offsets are defined as compulsory spending that foreign defence firms selling equipment to India have to undertake for sourcing local material.

Rosobornexport is a Russian government entity in charge of military exports. All Russian military deals with India are routed through this entity. Russian Aircraft Corporation MiG makes MiG fighter jets, which are part of the Indian Air Force’s fleet. In January 2010, India decided to purchase 29 MiG 29K fighters for close to $1.2 billion. NPO is a leading space and rocketry company in Russia. The Indian-Russian BrahMos joint venture was established with NPO.

ET sent a detailed questionnaire to the London-based Choudhrie family last week. There was no response. No responses were forthcoming from Rosoboronexport either.

A Credit Suisse spokesperson, responding to ET’s questions, wrote: “As a matter of principle, Credit Suisse does not comment upon its actual, potential or rumored client relationships. Credit Suisse complies with applicable rules and regulations related to Anti-Money Laundering’’.

BBC television’s Panorama programme obtained the Credit Suisse confidential report. Commissioned in 2008 as part of risk assessment exercise, the report notes payments were made in 2007-08 to 18 Choudhurie family group accounts through companies and bank accounts located in Seychelles, Zurich and Panama.

“In total there are 18 account relationships (17 in Zurich 1 in Singapore) that were established for the Choudhrie family and relatives….The accounts relate to the Choudhrie family group,” the report, dated October 2, 2008 reads.

The report also notes Choudhurie family business operations have presence in tax havens like British Virgin Islands, Panama and Seychelles.

Three companies – Carter Consultants Inc, Belinea Services Ltd and Cottage Consultants Ltd – also figure in the so called Panama papers. Panama papers refer to a set of documents from a Panamanian law firm on financial transactions and companies of many individuals and entities from different countries, including India. Tax avoidance has been alleged as one of the motives behind these transactions.

Panama papers show Bhanu Choudhrie (Sudhir Choudhurie’s son) and Aman Chopra (a cousin) as directors or share holders of the companies.

These companies received over $126 million from Russian arms companies in 2007-2008. The biggest share went to Belinea Services Ltd, Seychelles. It received over $60 million from Russian companies.

On Cottage Consultants Ltd, the report says, “The background information to this account is the same as for the private account of Bhanu Choudhrie and refers to the family as being very wealthy with an overall fortune of approximately $2bn. The family started off with the catering business four generations ago and built up a number of additional businesses in real estate, aviation, property and construction, IT support etc”.

The report mentions that Cottage Consultants has received “EUR 28.1 mn from State Corporation Rosonboronexport, EUR 4.7 million from PJSC RAC * MIG * and EUR 9.7 mn from ABC,” since October 2007. The report links this money to the offsets business.

“PJSC RAC MIG is the leading Russian industrial corporation for design, production, sale, logisitics, support of aeronautical engineering. The flow of funds comment for these transfers was incoming funds from clients offset business,” the Credit Suisse report says.

On Belinea, the report says” “Since Oct 1st 2007 there have been inflows of EUR 60.88 mn and outflows of EUR 23.6 mn. The in and out flows mirror that of Cottage Consultants limited in that EUR 37.2 mn were received from State Corporation Rosoboronexport, EUR 18.85 mn from ABC $2 mn from JSC MIC NPO”.

MiG and other firms paid millions to CBI, ED suspect Sudhir Choudhurie’s son, cousin