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Pak family-run UK company, Formations House, at centre of global investigation

Founded by Pakistani-origin businessman Nadeem Khan, Formations House emerged as a known destination for companies wishing to set up offshore entities and financial institutions. While Khan died in 2015, weeks before he was to stand atrial for money laundering in London, the company is being run by his daughter, Charlotte Pawar.

, ET Bureau|
Updated: Dec 04, 2019, 04.07 PM IST
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Investigation
The operations, which at one point involved 150 employees, were run by Pakistani nationals who took on western sounding names.
NEW DELHI: A UK company run by a Pakistani origin family that specialised in creating shell companies across the globe is at the middle of a worldwide collaborative journalism investigation after several hundred thousand documents were disclosed in what is being termed as #29Leaks.

The Formations House, which outsourced a significant part of its work to Karachi with Pakistani nationals using western sounding names to communicate with clients, helped create several thousand companies in jurisdictions that are typically used to evade taxes and other regulations, investigations have found.

The leaks contain details of several Indian individuals that created companies and bank accounts in the UK and Africa, the workings of a Singapore-based bank that is accused in several fraud cases in the Indian subcontinent and the creation of an offshore bank by an Indian businessman who is being investigated by income tax authorities in Mumbai for stock market fraud and now claims to be an advisor for the government’s Invest India initiative.

The data was obtained by information activist group Distributed Denial of Secrets (DDoS) and shared with journalists. While personal details are not being disclosed, teams including The Times (UK), The News (Pakistan), South China Morning Post, OCCRP and The Economic Times have found trails of dubious transactions and possible fraud in the 131 gigabytes of leaked internal data.

THE FORMATIONS HOUSE
Founded by Pakistani-origin businessman Nadeem Khan, Formations House emerged as a known destination for companies wishing to set up offshore entities and financial institutions. While Khan died in 2015, weeks before he was to stand atrial for money laundering in London, the company is being run by his daughter, Charlotte Pawar.

Within the data reviewed by ET are inquiries by Indian individuals requesting the company to create UKbased and offshore bank accounts to receive foreign funds, creation of IT firms and investment proposals.

While clients who approached the company thought they were dealing with professionals based in London, investigations by The News have found that a large part of the work was being handled by a company in Karachi.

These operations, which at one point involved 150 employees, were run by Pakistani nationals who took on western sounding names.

For example, The News has found that an executive who communicated with global clients as Oliver Hartmann was is in fact a man named Rizwan from Lahore.

In an emailed statement to joint questions by the media collective, Charlotte Pawar said the leaked data has been reported as stolen and refused to answer questions, saying the information was “unverified”.

Arun Panchariya, promoter of Indian film distributor KSS (formerly K Sera Sera), who is being investigated by the IT department for financial fraud, used Formations House to open up a shell company in the UK and a bank in Gambia, the documents reveal.

Strangely, in an interview with media partner, Serbia-based KRIK and OCCRP, Panchariya claimed he is an advisor to ‘Invest India’.

As reported earlier by ET, KSS is under investigation for allegedly duping Indian investors by manipulating an issue of global deposit receipts, not disclosing its overseas interests and evading tax. While the I-T investigation wing found that money was being routed through the foreign institutional investor and companies to K Sera Sera, ZAHID the global investigation has found that the businessman opened at least one suspicious financial institution in Gambia, called the Global Suvarchase Bank Ltd.

DUBIOUS CREDIT BANK
The Axios Credit Bank, purportedly based in Singapore, has been named in fraud cases in India, Pakistan, Switzerland and Bangladesh.

The bank, which records show is actually based in Gambia, has an Indian director but has no authority to operate in India. Leaked records show that the bank was run by an Indian businessman, named Ngulminthang Lhanghal, who allegedly paid 20,000 GBP for the international bank in 2017 that claimed a $50 million capital.

In response to queries, the bank promoters admitted they have no authority to operate in India.

However, in a case involving Hero Exports in Ludhiana, line of credit issued by the bank for an export order to Dubai was alleged to be fake. The case is being investigated by the police and the individual who gave the invalid LoC is currently in jail. The bank claims that it helped local authorities in recovering the money after the case was registered.
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