India Legal 30 April 2016

24
NDIA EGALL
April 30, 2016 `100
www.indialegalonline.com
I STORIES THAT COUNT
6856
GrabbingEnemyProperty
RameshMenon
2222224444444444
TheSupremeCourthascomedown
heavilyonJalikattuinthenameofreligious
celebrations,thenwhynotfireworkswhich
consumehumanlives?
—JusticeVChitambaresh
Naveen Nair reports on the
avoidable tragedy
Th S C h d
UNHOLY
INFERNO
KERALATEMPLEFIRE
Dinesh
Sharma
Goodbye
to E-Waste
64
Kalyani
Shankar
Mehbooba’s
Mission 42
Ramasubramanian
Judiciary in the Dock 18
Ajith Pillai’s
special report on
the real players
behind the tax
havens 36
PANAMA PAPERS
TheArtofFaking
ShobhaJohn

LETTER FROM THE EDITOR
ensured that the stories kept coming. In fact, all
the major stories we broke—ranging from mis-
feasance and malfeasance on benches, the judi-
cial appointments controversy, executive vs
judiciary, rape and dowry laws, the beef ban,
intolerance and sedition debates, dismissal of
state governments, judicial activism in the crick-
et and tele-spectrum scams, the first interview
with former telecom minister A Raja after his
release from prison, animal sacrifice, actor
Sanjay Dutt’s legal tangles… were solid law-ori-
ented stories which we reported and analyzed in
our own special format.
Our covers reflect vigor, dynamism and cur-
rency. The appreciation from the general public
was hugely encouraging. But what about the
legal community? Why should lawyers and
judges and law students read India Legal if they
could get the same news elsewhere and unless
there was something exceptional within its pages
which was of special interest to them?
We expanded our reach by adapting our sto-
ries to the needs of our sister concern, APN
News TV (Tata Sky 481) and added special pro-
grams like the daily half-hour Courts and the
hour-long India Legal talk show in Hinglish that
airs Saturday nights at 8 pm. Coming Soon: An
English language 24X7 India Legal TV channel.
That our editorial formula, partly planned,
partly self-materializing, is working is evident
from an agreement signed on April 13 between
HEN we re-launched India Legal
as a fortnightly magazine some
two years ago, dubbing it “India’s
first politico-legal fortnightly”,
we were unsure how long we
could maintain this special niche identity and
how soon it would be before we ran out of good
story ideas and writers and reporters who could
provide focused, exclusive content.
Would we turn into a plodding legal tome or
a law gazette or a me-too Lex Witness or
Legally India or Bar & Bench or a law review?
We did not know because ours was a novel
experience. We knew what we wanted—a jour-
nalistic magazine and not a handbook or an
academic paper for lawyers. We wanted to tell
fast-breaking news, current affairs, investiga-
tive and features stories within their legal and
constitutional framework.
The idea was not only to attract lay readers
to a novel concept of reporting and editing but
also to hook the legal profession and communi-
ty to the product and to make it our core target
audience. Deft and nimble-footed editors
W
COMING OF AGE
INDERJIT BADHWAR
The idea was not only to attract lay
readers to a novel concept of reporting
and editing but also to hook the legal
profession and community to the product.
4 April 30, 2016

the moot court on their campus which will be
aired on our TV channels via campus-based stu-
dios and broadcast facilities.
I have already tried to explain the USP of
India Legal. Dr BS Bajpai, NLU’s registrar,
explained his institution’s USP beautifully: “We
do not treat our students like inmates. We
encourage them to set creative agendas.”
Bringing the two institutions together, I
hope, will create editorial magic.
India Legal and the iconic National
Law University in Delhi. I cannot
describe its significance, its uniqueness
better than I did in my pithy Facebook
post that same evening:
“This is a great moment for my
news organization India Legal/APN
News-TV. We just signed an MOU
with one of the world's most renowned
law colleges, NLU, Delhi, for a joint
venture in involving students/
faculty/journalists/foreign law schools
like Columbia and Harvard and visit-
ing professors to bring powerful legal
news and opinion to the world. BTW
NLU is to law what IIT is to science
and technology. This month NLU
received 80,000 applications for 80
student (full strength) openings. What a rocket
science campus!
“This is truly a Make-in-India success story
(without political showmanship) producing
Rhodes Scholars and faculty/student exchanges
sought after by Colombia and Harvard and
Princeton and Oxford. Vice-Chancellor Prof
Ranbir Singh is a legend in his own lifetime. It
was an honor to shake his hand.”
Not only will students and faculty participate
and help in moving forward the content of India
Legal magazine but also participate in seminars,
discussion groups, reconstruction of trials from editor@indialegalonline.com
PROUD MOMENT
(L-R) NLU registrar
Dr BS Bajpai, APN
editor-in-chief Rajshri
Rai, NLU VC Prof Ranbir
Singh and India Legal
editor Inderjit Badhwar
after inking the pact
(Below) The sprawling
campus of NLU Delhi
Anil Shakya
INDIA LEGAL April 30, 2016 5

APRIL30,2016
Taxing Times
Twenty-one years after notices were issued to the Congress and the Janata
Party for not filing I-T returns, the Delhi High Court has slammed them and
asked them to cough up the money. JAGDEEP S CHHOKAR
Temple Tempest
Will the Kerala government have the will to ban fireworks in temples after the
deadly blast in Putingal which killed many and injured scores? NAVEEN NAIR
24
LEAD
14
Judiciary in the Dock
The Madras High Court suspended a judicial magistrate for graft, sending out a strong
message to the subordinate judiciary in Tamil Nadu. R RAMASUBRAMANIAN
18
28
VOLUME. IX ISSUE. 16
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Editor
Inderjit Badhwar
Managing Editor
Ramesh Menon
Deputy Managing Editor
Shobha John
Executive Editor
Ajith Pillai
Associate Editors
Meha Mathur, Sucheta Dasgupta
Deputy Editor
Prabir Biswas
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Convergence Manager
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Assistant Editor
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Technical Executive (Social Media)
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Technical Executive
Anubhav Tyagi
6 April 30, 2016
A Sprawling Web
The Panama leak has exposed heads of state, criminals and celebrities from
across the world. A report by The International Consortium of Investigative
Journalists. ProPublica
COURTS
PROBE

A “loyalty form” by an Urdu language council has said that adverse
comments against the government by authors and editors in their
books could invite legal action. VENKATASUBRAMANIAN
Yet Another Muzzling
REGULARS
Cover Design: ANTHONY LAWRENCE
Edit............................................................................... 4
Quote-Unquote........................................................... 8
Ringside.....................................................................9
Supreme Court........................................................... 10
List of Cases................................................................13
Courts......................................................................... 22
National Briefs............................................................ 41
International Briefs.................................................47
Campus Update......................................................... 51
Wordly Wise................................................................ 81
People......................................................................... 82
The Himachal CM is facing the heat on IT returns and
disproportionate assets but blames it all on vendetta
politics. VIPIN PUBBY
EDUCATION
The Rajya Sabha recently passed a bill which seeks
to debar half of eligible Sikhs from voting for the
SGPC. VIPIN PUBBY
Baptism Bar
RELIGION
78
FollowusonFacebook.com/IndiaLegalMagazine
andTwitter.com/IndiaLegalMag
74
48
The Panama Papers have brought the focus back on black
money, but with the interests of powerful nations involved, can the
Indian government successfully investigate it? AJITH PILLAI
36The World of Tax Havens
Virbhadra’s Asset Test
The new E-Waste
Management Rules 2016
will ensure that used
products are returned
to manufacturers
who will then be
responsible for
recycling them safely.
DINESH C SHARMA
ENVIRONMENT
Goodbye to E-Waste 64
The center has promulgated an ordinance that lets it seize
some 16,000 “enemy properties” even if their heirs are Indian citizens
and has also barred courts from hearing their cases. RAMESH MENON
SPOTLIGHT
Govt’s Land Grab 56
Mehbooba’s Mission 42Heading an uneasy alliance with the BJP, J&K’s first woman
CM has an unenviable task at hand—keeping the flock together
and handling trouble on the border. KALYANI SHANKAR
STATES
The Kolkata flyover tragedy has brought to the fore
the administration’s apathy and the insensitivity of politicians
who tried to milk the situation for electoral gains. SUJIT BHAR
Deadly Collapse
52
The booming art market
has led to the works of
famous painters being
forged and sold by
unscrupulous dealers
and galleries for crores,
with some even being
taken to court.
SHOBHA JOHN
Fakes
and
Fortunes
ART
68

QUOTE-UNQUOTE
“Fire crackers are used
only for the happiness of
people and not god. God
is not deaf. So I would
say that it is best to ban
it completely.”
—Mata Amritanandamayi,
spiritual leader from Kerala,
following the firecracker tragedy
in Kerala, to CNN-IBN
8 April 30, 2016
“You know what’s the meaning of
TMC? T means terror, M means
maut (death) and C means
corruption.”
— Prime Minister Narendra Modi at an
election rally in Siliguri, West Bengal,
in The Telegraph
“I know I should have handled
this better. I could have handled
this better. I know there are
lessons to learn and I will
learn them. Blame me.”
—British PM David Cameron,
on his late father’s inclusion in
The Panama Papers, to Tory
activists in London, in
The Independent
“You have to be true to yourself
and have a personality that
reflects who you are and unless I
am true to yourself (sic), I can
never be true to others.”
—Priyadarshini Chatterjee,
answering her final question: What it
takes to be Miss India, on her way to
being crowned Femina Miss India
World 2016
“Now they talk of ‘Make in
India’, ‘Start-up India’ and
‘Stand-up India’, but will
ultimately take the nation to
‘sit down, lay down and
sleep India’ stage.”
—Bihar Chief Minister Nitish
Kumar, referring to NDA
government at the center, in
The Times of India
“All these senseless
suicides achieve nothing!
Life is god’s gift for us
to live.”
—BJP MP Hema Malini’s tweet,
referring to TV actress Pratyusha
Banerjee’s death
“CBI bothered me a lot. It
searched my house and
also of my relatives for
disproportionate assets.
Fields and cattle were also
counted but they got
nothing. In such scenario I
can say that now I am
CBI-certified honest.”
—SP chief Mulayam Singh Yadav,
addressing a gathering at party
office in Lucknow

Good judgment comes from experience, and a lot of
that comes from bad judgment.
—Will Rogers,
actor, humorist and newspaper columnist
VERDICT
Aruna

SUPREME COURT
10 April 30, 2016
Karisma Kapoor’s divorce deal
Bring Mallya back
The Supreme Court observed
that liquor baron Vijay Mallya
who owes `9,000 crore taken as
loans from various government
banks must come back to India.
He must initiate a purposeful dia-
logue with lenders on the schedule
for repayment. It directed Mallya’s
counsel to report the exact date of
his arrival in India by the next hear-
ing on April 26. Mallya is currently
in London.
The Court also asked Mallya to
declare truthfully all assets owned
by him and his family in India and
overseas, as well as the amount he
is willing to offer in an affidavit
by April 21 to prove that he
means business.
The directive came after the
banks had turned down Mallya’s
offer to pay `2,000 crore upfront
and another `2,000 crore by
September this year. However, they
were ready to enter into a fresh
discussion with him on the pay-
back issue. But for that they want-
ed the Kingfisher Airlines boss to
be brought back to the country. If
that was not done, they expressed
doubts about the chances of
recovering their money.
The protracted divorce process
between actor Karisma Kapoor and
Sunjay Kapur finally reached a conclu-
sion in the apex court recently. Both
settled for divorce by mutual consent
and also ironed out all vexed issues
that had come in the way of their
separation. The Supreme Court
endorsed the deal.
The terms of agreement for divorce
were recorded in the Court which was
also told that Karisma will no longer
pursue the domestic violence case
against Sunjay and his mother. The
actor said that she will withdraw it within
two weeks. Based on her testimony, the
apex court struck down the FIR filed
against them.
The couple will now move the
Bandra court in Mumbai on June 13 for
their divorce. Karisma and Sunjay got
married in 2003.
The apex court gave a clean chit to the
Reliance Group owned by Mukesh Ambani
in the allocation of 4G spectrum. It struck
down a PIL filed by the NGO, Centre for Public
Interest Litigation (CPIL), that had opposed the
granting of 4G license to Reliance Jio
Infocomm (RJIL) on the ground that it was
undervalued and resulted in a loss to
the exchequer.
The government had in 2013 allowed RJIL
to offer voice services on 4G spectrum. The
apex court noted that the RJIL was awarded
the license on the basis of a proper auction in
2010, attended by reputed companies and no
objections had so far been raised in courts on
the allocation process. It observed that the
decision was based on experts’ view and
endorsement from TRAI.
The top court ruled there was no need for a
judicial review on policy matters unless these
were found “arbitrary, based on irrelevant con-
siderations or mala fide or against any statu-
tory provisions.”
Clean chit
for RJIL

While hearing objections raised by the BCCI over the
Lodha Committee suggestions to overhaul the
world’s richest cricket body, the apex court made a
stinging observation. It noted that BCCI did not do any-
thing for cricket in India and was only fulfilling its own
interests.
The Court did not budge from its stand that it was
time the BCCI adhered to the recommendations and felt
that it could be done easily. It pulled up the BCCI over its
biased fund disbursal policy. It noted that states like
Gujarat and Goa got huge funds but several others,
including Bihar were starved of money. Cricket should be
developed uniformly throughout India, the Court noted.
Smelling foul play in money allocation, the Court
directed that BCCI accounts be vetted by three compa-
nies of international standing.
BCCI pulled up
for nepotism
A relook at
Nirbhaya case
The Supreme Court was on the same page as the
convicts in the gruesome 2012 Nirbhaya murder
case. The convicts had pleaded that they did not get
adequate chance to defend themselves either in the trial
court or in the Delhi High Court. The Court observed
that there was a need to take a fresh look at all angles
of the case and lawyers well-versed in criminal law
should take it up for their defense to ensure that there
was no denial of justice.
Senior advocate Raju Ramachandran will represent
convicts Mukesh and Pawan while Sanjay Hedge will
fight for Vinay and Akshay. All four of them were award-
ed capital punishment by the trial court and the deci-
sion was later supported by the
Delhi High Court. The convicts
pleaded before the apex court
against the verdict which
put on hold the execution
in 2014.
Refuting the argu-
ment of the convicts
against the appoint-
ments, the apex court
felt that it had the
power to decide on
“amicus curiae” to help
it in any case.
The next hearing is on
July 18.
The ongoing water crisis in India was
taken up earnestly by the apex court,
with the states as well as the center
receiving a dressing down from it over
apathy in addressing the drought scenario
in the states. It was adjudicating on a PIL
filed by NGO Swaraj Abhiyan.
When the center pleaded for an
adjournment on the ground that its Addi-
tional Solicitor General (ASG) Pinky Anand
dealing with the case was not present in
court, the Court was livid and pointed out
that it amply reflected the center’s
don’t-care-a-hoot mindset. The ASG had
to quickly present herself at the hearing.
Then it was the turn of Gujarat and
Haryana to be in the firing line. The Court
observed that they had presented “poor”
data on drought-affected areas. Gujarat
tried to put up a defense by citing infor-
mation on the villages declared drought-hit
and apprising the Court that the National
Food Security Act was notified from April
1. That irked the Court further which
sought an explanation on why the Act
came into force so late when drought con-
ditions had emerged last September.
In another hearing, the apex court felt
that there was laxity on the center’s part
to implement welfare schemes, like
MGNREGS in the right manner in areas hit
by drought. It observed that wages were
taking inordinate time to reach workers
under MGNREGS. The Court directed the
center to place before it the funds slated
for states under such welfare schemes.
Later, the center released `12,230
crore to states under MGNREGS.
Be serious
about drought

SUPREME COURT
12 April 30, 2016
The Special Investigation Team
(SIT) probing into the role of
former CBI chief Ranjit Sinha in
the coal scam probe indicated in
its report that there were solid
grounds to believe that Sinha did
try to “derail” the investigations
into critical coal scam cases.
The SIT was formed by the
apex court in July 2015 under
former special CBI director ML
Sharma. The report was tabled
in the apex court in a sealed
envelope.
Advocate Prashant Bhushan
had alleged that Sinha met sev-
eral people accused in the coal
scam at his residence without
any investigating officer accom-
panying them. The meetings took
place when the CBI was filing
charge-sheets. The visitors’
diary was cited as evidence.
The probe team’s findings are
based on a threadbare examina-
tion of the charge-sheets filed by
the CBI related to the scam when
Sinha was in office. It has asked
the court to allow it to scan the
preliminary enquiries that were
not considered for action,
allegedly on Sinha’s instructions.
The cases up for scrutiny
include the allocation of
Talabira-II coal mine to Hindalco.
Former PM Manmohan Singh
name was also dragged in by the
trial court in the case.
SIT report accuses
Ranjit Sinha
The apex court expressed its concern for
senior citizens and asked the center
about its plans for their shelter, food
and healthcare.
The Court took note of a PIL filed by
Congress leader Ashwani Kumar which
pointed out the neglect and apathy the elderly
faced from their children as well as their mis-
erable existence. The PIL underlined the mea-
ger budgetary funds allocated by the center
for the aged and its sluggish approach to
work for the community as several welfare
schemes for senior citizens are yet to
take off.
No concern for the aged
—Compiled by Prabir Biswas
Illustrations: UdayShankar
Delhi University professor GN Saibaba, undergoing
trial for his links with Maoist ultras was granted
immediate bail by the apex court. The Court also blamed
the Maharashtra government for its rigidity in opposing
his bail when all critical witnesses in the case had been
heard and interrogated by the trial court, terming it
as “unfair”.
The Court overlooked the objections of the
Maharashtra government which pleaded that Saibaba
may take to subversive activities that hurt national inter-
est. It observed that there is no point in keeping the pro-
fessor behind bars, especially when he is physically
challenged and afflicted by ailments.
However, the apex court ordered that Saibaba
must present himself before the trial court whenever
summoned.
Bail for Saibaba

13INDIA LEGAL April 15, 2016
Hearing on the Akshardham Temple case in Gujarat.
The apex court will examine the reference under Article 143
pertaining to the Punjab Termination of Agreements Act,
2004 passed by Punjab, terminating all water sharing
agreements with the neighbouring states.
The apex court will take up a PIL challenging the ban on the
entry of women to Sabrimala Temple in Kerala.
Hearing of a PIL on the constitutional validity of the Schedule
Tribes and other traditional forest dwellers (Recognition of
Forest Rights) Act, 2006 and also questions on preservation
of forest in the context of the above Act.
The apex court will hear a PIL on the prolonged detention of
undertrial prisoners and their condition.
Hearing of a PIL on the large number of Indians being killed
by Manipur Police and other security forces while they are in
judicial custody, or in stage-managed encounters.
The apex court will take up an appeal challenging directions
passed by the NGT on taxi vehicles plying on the Rohtang
Pass. NGT had asked the concerned government to provide
CNG buses for Rohtang Pass. The present limit is 500
vehicles per day.
Hearing a PIL on bad loans advanced by HUDCO and other
banks to few companies. The Court had made RBI a party to
the case and directed it to provide details of companies who
have defaulted loans of more than `500 crore.
SLP to recover `6,963 crore debts from Kingfisher Airlines filed
by consortium of banks. The Court had directed Vijay Mallya to
disclose assets and liabilities and rights of his wife and chil-
dren. The Court will also want to know the amount he deposits.
Hearing on a PIL in which SC issued directions to the center,
state governments, and UTs to implement the provisions of
Persons with Disabilities (Equal Opportunities, Protection of
Rights and Full Participation) Act, 1995.
DATE
Supreme Court
WP(Crl) 25/2015
Adambhai Sulemanbhai Ajmeri & Ors
vs State of Gujarat
April 18
April 18
April 18
April 18
April 19
April 22
April 25
April 26
April 26
April 26
Supreme Court
Spl Ref 1/2004
U/A 143(1) of the Constitution of India
[Reg: The Punjab Termination Of
Agreements Act, 2004]
Supreme Court
WP(C) No 373/2006
Indian Young Lawyers Association &
Ors vs State of Kerala & Ors.
Supreme Court
WP(C) NO 109/2008
Wildlife First & Ors vs Union of
India & Ors
Supreme Court
WP(C) 769/2013
Suma Sebastian (Advocate) vs Union
of India & Ors.
Supreme Court
WP(C) 129/2012
Extra Judicial Execution Victim Families
Association (EEVFA) vs Union of
India & Ors.
Supreme Court
Civil Appeal D 17731/2015
Himachal Taxi Operators Union and
Anr vs State of Himachal Pradesh
and Ors.
Supreme Court
WP(C) 573/2003
Centre for Public Interest Litigation vs
Housing & Urban Development Corp.
Ltd & Ors.
Supreme Court
SLP(C) 6828-6831/2016
State Bank of India and Ors vs
Kingfisher Airlines Ltd and Ors.
Supreme Court
WP(C)116/1998
Justice Sunanda Bhandare Foundation
vs Union of India.
COURT, CASE NO. & NAME DETAILS
COURT HEARINGS
List of cases to come up from April 16-30, 2016

I
N a surprising and rare develop-
ment, a division bench of the Delhi
High Court, passed strictures agai-
nst two political parties—the Cong-
ress and the Janata Party—21 years
after notices were issued to them by the
income tax department for not filing their
IT returns.
On March 23, 2016, a bench comprising
of Justices S Muralidhar and Vibhu Bakhru,
passed separate judgments on the same day
against these two parties on this issue. Rarely
are political parties pulled up by courts. The
coincidences don’t end there.
It was on September 20, 1995, that the
Assessing Officer (AO) issued a notice to the
Congress Party asking it to file its IT return
COURTS/ Delhi/Political Parties
In a surprising
development, the
High Court here has
slammed the
Congress and the
Janata Party for trying
to evade income tax
and asked them to
cough up the
required amount
By Jagdeep S
Chhokar
Taxing Times for
Congress, Janata Party
14 April 30, 2016
MONEY MATTERS
Politicians crisscross
thousands of kilometers in
choppers during elections,
thus spending crores
Photos: UNI

for Assessment Year 1995-96. And it was on
September 21, 1995, a day later, that the Ja-
nata Party case began with the AO issuing a
notice asking it to file its IT return for Ass-
essment Year 1995-96.
TAX EVASION
The notices by the AO were issued, presum-
ably, after a PIL was filed by a civil society
organization, Common Cause, in 1995 alleg-
ing that the political parties were not filing
IT returns but were enjoying 100 percent ex-
emption. The case was heard in 1995 and
decided by the apex court on April 4, 1996.
The apex court had then passed critical
observations about the functioning of the IT
department. Inter alia, it said: “It is obvious
that there has been total in-action on the part
of the Government to enforce the provisions
of the Income Tax Act relating to the filing of
a return of income by a political party.” One
of its conclusions said “that the Income-tax
authorities have been wholly remiss in the
performance of their statutory duties under
law. The said authorities have for a long peri-
od failed to take appropriate action against
the defaulter political parties”.
The Common Cause judgment describes
the mechanics of the election in very realistic
terms: “The general elections—to decide who
rules over 850 million Indians—are staged
every 5/6 years since independence. It is an
enormous exercise and a mammoth venture
in terms of money spent…The political par-
ties in their quest for power spend more than
one thousand crore of rupees on the general
election (parliament alone), yet nobody
accounts for the bulk of the money so spent
and there is no accountability anywhere.
Nobody discloses the source of the money.
There are no proper accounts and no audit.
From where does the money come no-body
knows. In a democracy where rule of law pre-
vails this type of naked display of black
money, by violating the mandatory provi-
sions of law, cannot be permitted.”
IT DEPARTMENT
It is likely that the Common Cause case stir-
red the IT department into action, resulting
in it issuing notices to the Congress and the
Janata Party. Both cases were heard over ti-
me and the respective Assessment Officers
(AOs) passed their orders on March 21, 1997,
for the Congress, and March 31, 1998, for the
Janata Party. Appeals were filed to the
THE MORE THE
MERRIER
Voters queuing up
to cast their votes.
Political parties deal
with huge sums of
public money
during elections
After going into
the nitty-gritty
and pinpointing
exactly how the
parties took
shelter behind
utterly irrelevant
and baseless
arguments, the
Court held that
the Congress
and the Janata
Party were liable
to pay IT on
`25.12 crore and
`1.23 crore
respectively.

Commissioner of Income Tax (Appeals) in
both cases and rejected in July 1998 for the
Congress and in February 2000 for the
Janata Party. Both parties then filed appeals
to the Income Tax Appellate Tribunal (ITAT).
The ITAT upheld the appeals in April 2001
for the Congress, and in November 2001 for
the Janata Party. The IT department then
filed appeals in the High Court in January
2002 and January 2004 respectively for the
Congress and the Janata Party. And the judg-
ment of that was given this March.
The two-judge bench of the Delhi HC
exhibited great sensitivity about the impor-
tance of the case and the issue, stating it
clearly in the judgment itself: “The signifi-
cance of this case, which has had a chequered
history, lies in it being symbolic of the gener-
al lack of transparency and accountability of
political parties in this country. By a separate
judgment today the Court is disposing of a
similar case involving the Janata Party for
AY 1995-96.”
The 71-page elaborate judgment refers to
some seminal cases and legislations on elec-
toral reforms such as the KanwarLal Gupta
vs Amar Nath Chawla (1975) case, the
Common Cause (1996) case, the Guidelines
on Transparency and Accountability in Party
Funds and Election Expenditure issued by
the Election Commission of India on August
29, 2014, and the 255th Report of the Law
Commission of India submitted in March
2015. The judgment opens with a quotation
from the KanwarLal Gupta vs Amar Nath
Chawla case: “More than four decades ago,
while noting the distortion that large contri-
butions of money made to political parties
and candidates could bring about to the elec-
toral process, the Supreme Court (made sig-
nificant observation) in the KanwarLal
Gupta vs Amar Nath Chawla case.”
TOUGH OBSERVATIONS
After going into the nitty-gritty of the current
cases, pinpointing exactly how the political
parties took shelter behind utterly irrelevant
and baseless arguments and ambiguities, the
Court ruled that the Congress and the Janata
Party were liable to pay income tax on `25.12
crore and `1.23 crore respectively. The “Su-
mmary of conclusions” itself runs into
17 points!
The essence of the judgment is captured
eloquently in its concluding paragraph:
“Considering that political parties are an
essential part of our democracy and are deal-
ing in large sums of public money, much of
which is unaccounted, the proper auditing of
the accounts of the political parties is both
imperative [and] critical to the conduct of
free and fair elections. The above recommen-
dations of the LCI should receive serious and
urgent attention at the hands of the executive
and the legislature if money power should
not be allowed to distort the conduct of free
“…political parties in their
quest for power spend more
than one thousand crore of
rupees on the general
election (parliament alone),
yet… there is no
accountability anywhere.
Nobody discloses the
source of the money. There
are no proper accounts and
no audit.”
—SC in Common Cause case
16 April 30, 2016
COURTS/ Delhi/Political Parties
UNDER SUSPICION
Congress, with Narasimha
Rao (right) as PM, was
slapped an IT notice in
1995, seeking its returns
for the assessment
year 1995-96

IL
INDIA LEGAL April 30, 2016
and fair elections. This will in turn infuse
transparency and accountability into the
functioning of the political parties thereby
strengthening and deepening democracy.”
Whether this judgment will “receive seri-
ous and urgent attention at the hands of the
executive and the legislature” is debatable
though it seems reasonably clear that the
issue will go to the Supreme Court as both
the Congress and the Janata Party are unlike-
ly to accept the verdict.
Notwithstanding that, the Income Tax
department seems to have vindicated itself
by persisting with these cases for over 21
years. Let’s hope they continue to persevere
in their efforts to contribute to the “strength-
ening and deepening (of) democracy”.
The judiciary is equally worthy of com-
mendation for upholding the rule of law, as
clearly enunciated in the Common Cause
case. “The political parties are not above law
and are bound to follow the same,” said this
judgment.
AUDITORS SLAMMED
The two-judge bench has also commented in
some detail on how the chartered account-
ants who audited the accounts of the
Congress and the Janata Party performed
their jobs. These comments are far from
laudatory and specific instances of derelic-
tion of their professional duties have been
pointed out. The judgment makes observa-
tions which need to be noted by the Institute
of Chartered Accountants of India who need
to take appropriate action.
While considering the estimation of the
income of a political party “with a degree of
certainty”, the bench observed: “This kind of
an exercise would require collating a vast
amount of data which as of now does not
exist in the public domain particularly with
political parties resisting attempts at bring-
ing them within the ambit of the Right to
Information Act, 2005.”
This is a very significant observation
given the fact that the Central Information
Commission declared six national political
parties to be public authorities under the RTI
Act as far back as March 2013 but none of the
parties complied with that decision. The
matter is now under consideration of the
Supreme Court.
On the whole, this is a very significant
judgment. One hopes it will be upheld by the
Supreme Court if and when it comes up
there, and that the IT department will con-
tinue to perform its duty with the same dili-
gence it has done in these two cases.
—The writer is a former Professor, Dean,
and Director In-charge of IIM, Ahmedabad
LONG DRAWN CASE
Subramanian Swamy (L) was the Janata Party president till 2013 when he merged it with
the BJP in August 2013 in the presence of party leaders including Rajnath Singh (R)
As per Section 13A of the Income Tax Act 1961, political parties regis-
tered with the Election Commission need not pay income tax. However,
this incentive is only applicable if the parties file their income tax returns
every assessment year along with their audited balance sheet.
Aam Adami Party, Congress and 48 other entities had received
notices last February from the IT department for getting funds from "dubi-
ous" sources.
Congress had received an IT notice in the National Herald case in 2014.
It was asked to explain its tax-free funds to The National Herald and from
there to Young Indian.
In 2012, the CPM came under spotlight when a national daily alleged
that it was one of the biggest beneficiaries of corporate donations and
the identities of such companies were not revealed. However, the party
denied such insinuations.
—Prabir Biswas
Taxconnection

T
HESE are tough days for the
subordinate judiciary in Tamil
Nadu as the whip has been
cracked against erring judicial
officers. On April 1, in a deci-
sive move, the Madras High Court sus-
pended KV Mahendra Bhoopathy, judicial
magistrate, Melur (in Madurai district).
This was after Bhoopathy passed orders in
favor of granite baron PR Palanichamy or
PRP as he is popularly known. In fact, the
High Court had earlier appointed an
enquiry committee headed by IAS officer U
Sagayam, which had passed scathing com-
ments against PRP for destroying natural
wealth and illegally looting granite. The
committee pegged the loss to the state
exchequer at over `1 lakh crore due to this
illegal quarrying.
The issue created a huge furore in the
state and the local media went to town over
it. “The huge pressure generated by the
COURTS/
In an unprecedented move, the High Court
here has suspended a judicial magistrate
for corruption. Will this send a message
to the subordinate judiciary in Tamil Nadu
embroiled in various controversies?
By R Ramasubramanian
WatchOutfor
BigBrother!
Madras/Corruption Complaints
PULLING NO PUNCHES
The Madras High Court
has declared an all-out
war on corruption within
the lower judiciary
18 April 30, 2016

media coverage and protests by a few envi-
ronmental groups resulted in the Madras
High Court appointing the Sagayam com-
mittee. It is against this background that
the suspension of the magistrate has to be
looked at. Though the Madurai Bench of
the Madras High Court had framed guide-
lines for the concerned magistrate to deal
with this matter, he threw caution to the
winds,” said J Sekar, an advocate practicing
in Madurai.
The immediate provocation for the sus-
pension was not only the magistrate giving
a clean chit to PRP but also his direction to
the government to take action against then
Madurai collector for initiating actions
against the granite baron. “This challenged
the very authority of the High Court
because it was under its directions that
prosecution was initiated against PRP,”
added Sekar.
TAKE ACTION
Immediately after PRP got a clean chit, a
group of lawyers met Chief Justice Sanjay
Kishan Kaul of the High Court and made a
representation. He directed that an enquiry
be conducted and two district judges of
Madurai did so and submitted their report
to the CJ. On April 1, the High Court sus-
pended Bhoopathy.
In fact, the Madras High Court had
started tightening the screws on erring
subordinate judges a year ago. A few
months back, a lady special judge of a Fast
Track Mahila Court was suspended on the
day of her retirement and was not allowed
to retire. The High Court directed the
Crime Branch Criminal Investigation
Department or CBCID of the Tamil Nadu
police to look into the allegations against
her. Accordingly, the CBCID registered an
FIR and started an enquiry. Legal circles
say that this is the first time a serving dis-
trict judge was facing a CBCID enquiry in
Tamil Nadu.
District judges are supposed to retire at
58. Usually, the practice is that they will be
given a two-year extension. But in the past
one year, the Madras High Court has
refused to extend the services of at least
IN THE LINE OF FIRE
Judges return after probing
Melur judicial magistrate KV
Mahendra Bhoopathy (above
left) who had favored PR
Palanichamy (above right) in the
`1 lakh crore granite scam
half-a-dozen district judges. The reason:
corruption charges against them.
STRICT ACTION
In one case, though the administrative com-
mittee of the Madras High Court favored an
extension for one male judge, it was overruled
by a Full Court. In February this year, another
district judge—TS Nandakumar—was sus-
pended following several corruption charges.
The suspension would not have received huge
publicity if not for his suicide attempt in
Trichy district. In March, another judge was
forced to take compulsory retirement because
he granted interim bail to a doctor who was
arraigned as one of the main accused in a kid-
ney racket. Another lady sub-judge is facing
the heat of the vigilance wing of the Madras
High Court for simply under-reporting the
actual value of her total assets.

who prayed to the SC to fix decent salaries
and establish proper working conditions for
subordinate judicial officers right up to the
level of district judges. Accepting the plea, the
Supreme Court then appointed the K
Jagannath Shetty Commission and a formal
notification was issued in this regard on
March 21, 1996.
“The Shetty Commission filed its report
long ago, and most of the state governments,
including Tamil Nadu, implemented its find-
ings. Decent salaries were paid to subordinate
judicial officers. Laptops were given. Skill-up
gradation courses were conducted at periodi-
cal intervals, three office assistants, a vehicle
and housing and medical requirements too
were given. In spite of this, there are cases of
corruption,” said N Ramesh, a former magis-
trate and now a practicing advocate in the
Madras High Court. “There are several checks
and balances to curb the rot. To a large extent,
subordinate judicial officers are not allowed to
serve in one place for more than three years.”
Interestingly, there is a vigilance cell in
the Madras High Court campus headed by an
additional deputy superintendent of the state
police. It has a skeletal staff and looks into
corruption complaints against the subordi-
nate judiciary. “But in over 99 percent of the
cases, FIRs are not filed because there are no
first-party complainants. They usually get
anonymous letters and the matter ends there,”
said B Ramanathan, a lawyer in the High
Court. Even in the suspension of Bhoopathy,
no official reason was cited. It’s not clear how
long he will be under suspension and whether
an enquiry will be conducted against him.
To top it, there is the Judges Protection
Act which is like a shield for judges and pro-
tects them against all sorts of complaints.
The framers of the Act felt that subjecting
judges to allegations would not only demor-
alize them but also destabilize the justice sys-
tem of the country. But in the process, all-
pervasive corruption has crept into the judi-
ciary. In fact, Justice Markandey Katju wrote
in his blog that 50 percent of the judiciary
was corrupt.
The action of the Madras HC has sent out a
strong message to the over 2,000 subordinate
judicial officers in Tamil Nadu. It is hoped that
they will reform their corrupt ways. IL
So, how did the subordinate judiciary in
this state become so corrupt? “The role of
advocates is very crucial in this matter,”
revealed a retired district judge from south-
ern Tamil Nadu. “If there is a corrupt judge in
a subordinate court or in a district court, it
means that there are many corrupt advocates
in that court. It is these practicing advocates,
to a large extent, who not only function as
conduits but also nudge and perhaps instigate
judges to accept bribes. During my work in
over six districts, the offers mainly came
through lawyers practicing either in my court
or from the same district.”
Further, he said that cell phones, laptops,
television sets, other consumer durables, hard
cash and land would be offered as induce-
ments. The lawyer “touts” are smart and know
the personal likes and dislikes of concerned
judges and can gauge their psychology, he
said. “They are totally focused in this endeav-
or. With regard to corruption in the lower
judiciary, 99 percent responsibility lies with
the lawyers and 1 percent with the concerned
judges,” he added.
SHETTY PANEL
Corruption in the lower judiciary is an age-
old problem in the Indian judicial system and
the Supreme Court had taken steps to rectify
this. One such step was appointing the Shetty
Commission to look into the working condi-
tion of subordinate judicial officers. It was
instituted while hearing a case filed by the All
India Judges Association and a few others
COURTS/Madras/Corruption Complaints
VOICES AGAINST GRAFT
(L-R) Justice Markandey
Katju believes 50 percent of
the judiciary is corrupt; Chief
Justice Sanjay Kishan Kaul
who ordered the probe
against Bhoopathy
20 April 30, 2016

NO
HOLDS
BARRED
NDIA EGALEEEL
March 31, 2016
`100
NI STORIES THAT COUNT
SriSriRaviShankar’scultfestontheYamunafloodplainshasstrangulatedtheriverbed andstirredalegalstorm.DineshSharma10
MarketingMantrasandMantris
18
34
Dointelligencereportshaveanylegalvalue?byAjithPillai Judicialreform:TheappealofNationalCourtofAppealbyVenkatasubramanian
NEETA
KOLHATKARBohra
activists
battle againsta primitive
ritual 54
NAVEEN
NAIR
Will
Kerala’s
liquor
policy
47
NAVANK S MISHRAVishnu Sahai Report onMuzaffarnagar riots keepsall politicians happy 40
VIPIN
PUBBY
Jat violence
creates a
legal mess
24
ARTOFLIVINGJAMBOREE
NDIA EGALEEEL
March 15, 2016
`100
Areservations-linkedcivilwarinHaryanahasdamagedthismodelstateandmade
Bharatbleed.InderjitBadhwar,VipinPubbyandVenkatasubramaniandissectthe
legal,politicalandsocialconsequencesofquotablackmailing
ReapingaViolentHarvest
12
28ToHell&Back:TheReturnofSanjayBaba
CriticalanalysisofhiscasebyRameshMenon
AjithPillairecallsaninterviewwiththelateSunilDuttafterhisson’sarrest
VIJAY
MALLYA
Legal
Turbulence
Ahead?
56
UNION
BUDGET
What Jaitley
Really
Wants
38
OPEN
LETTER
Lawyers
Condemn
Lawyers
42
CS KARNAN
The
Judge
22
Army patrolling
the streets of Jind
JATREBELLION
12
NDIA EGALEEL
April 15, 2016 `100
74
RELENTLESSONSLAUGHT
Yamunafloodplainsturnanendangeredzone
InderjitBadhwar:TramplingonFederalism
AjithPillai:TheConqueringGame
MaryMitzyandNavankMishra:DramaintheCourtroom
PlayingwithFire
UTTARAKHANDCRISIS
TMC
Narada
Scam Gets
Murkier
24
Punjab vs
Haryana
Fishing in
Troubled
Waters 29
Medical
Malpractice
Physician
Heal Thyself
66
STATE ELECTIONS: The Battles Begin
Kerala: Scam Politics 32
Tamil Nadu: Amma’s Hopes 38
Assam: Skirting the Issues 44
KK Paul, governor,
Uttarakhand
AmitShah,
president,BJP
HarishRawat,
formerCM,
Uttarakhand
VijayBahuguna,
formerCMandleader
ofrebelMLAs
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COURTS
It is a typical case of justice
delayed but not denied. A Special
CBI Court in Lucknow awarded
life imprisonment to 47 police-
men for killing 10 Sikhs in a
“fake encounter” in the Pilibhit
district of UP and passing
them off as Khalistani mili-
tants in 1991.
The CBI, which was
directed by the Supreme
Court to probe the incident,
had chargesheeted 57
cops but 10 of them died
during the protracted trial
period.
The policemen held guilty
were from different grades and
the Court slapped different slabs on
them as fines. The station officers
were asked to cough up `11 lakh
each, sub-Inspectors `8 lakh, while
constables needed to pay `2.75
lakh each. Incidentally some are no
longer in service.
The Court, however, did not feel
the need to go for capital punish-
ment even though the crime was
heinous and the CBI had strongly
pleaded for it.
The Sikhs were brutally killed
after being forced to get off a luxury
bus filled with pilgrims, around 100
km from Pilibhit in July 1991. They
were later shot dead.
The incident took place at a
time when Punjab militancy was at
its peak.
Justice at last
Acourt in Jammu and Kashmir held a
well-known milk manufacturing
company of the Kashmir Valley respon-
sible for selling “impure” milk and
slapped a `9 lakh fine on it.
The order came in after it found that
“detergent, urea and other dangerous
chemicals” had been mixed with milk. It
also directed the Commissioner of Food
Safety to stop the company from pro-
ducing any milk and have its products
removed from the market.
Taking a serious view of the matter,
the lower court also sent the operations
head of the concerned company,
Khyber Agro Farms Private Ltd, to jail for six
months. It observed that the sentence was
necessary as various sections of the Food
Safety and Standards Act, 2006 had been
breached.
The Court was also convinced that the
Food Analyst of Kashmir, Hamidullah Dar, had
been approving the quality of milk produced by
the company, and ordered that he be sacked. It
observed that there was hardly any doubt over
the offense committed by the company as alle-
gations of adulterated milk produced by it had
surfaced in other courts as well.
Contaminated milk
22 April 30, 2016

The Special Court formed by the
Supreme Court for hearing all cases
in the coal block scam that jolted the
UPA government, came out with its first
conviction and sentence recently. It held
Jharkhand Ispat Pvt Ltd (JIPL) and its
directors RC Rungta and RS Rungta
guilty of cheating the government by
obtaining the allotment of North Dhadu
coal block in Jharkhand by furnishing
false and forged documents. They were
sentenced to a four-year jail term and
asked to pay `5 lakh each as fine. JIPL
too was slapped a fine of `25 lakh.
The Special Court, formed around
two years ago, is handling 21 cases in
the coal block allocation scam. Nine-
teen of these have been probed by the
CBI while the ED had investigated the
other two.
Firstconvictionin
coalblockscam
The request of Saritha S Nair,
accused in the solar scam in Kerala
for a CBI probe into the alleged role of
Chief Minister Oommen Chandy was
turned down by the Kerala High Court.
The Court observed that it was a
politically motivated plea considering
that the state goes to polls on May 16.
It also questioned Saritha’s right to
seek a CBI probe considering that she
herself had been accused in more than
30 cases of amassing crores of
rupees from the public in the name of
setting up solar panels in the state.
Saritha in her plea had trained her
guns on the SIT formed by the state
government for probing the solar
scam, insinuating that it did not focus
on the role of Chandy despite strong
evidence and wanted the CM to be
made a respondent in the case.
ShiftIPLmatches
After coming down hard on BCCI and
cricket associations in Maharashtra
and Mumbai for using huge amount of
water for maintaining cricket pitches for
the money-making IPL 2016 matches in
drought-hit Maharashtra, the Bombay
High Court ruled that all matches
post-April 30 be shifted out of
Maharashtra. In its earlier order, the
Court had allowed the first IPL match in
Mumbai, on April 9.
The Court observed that the financial
losses accruing out of the decision was
not as serious as the harm caused to
the people due to misuse of water in a
state reeling under drought. It had earlier
asked the authorities to think seriously if
matches could be shifted.
The orders came in response to a
PIL which had raised objection to 60
lakh liters earmarked for keeping pitches
match-ready for IPL at the three venues
in the state.
Observing that it was the responsibil-
ity of courts to ensure that the
exact compensation amount decided by
claims’ tribunals in road accidents
reached the victims or claimants, the
Madras High Court ruled that the
amounts be electronically transferred to
their bank accounts from August 1.
This process, it observed, will be much
less time consuming and insure the vic-
tims against “delayed compensation” or
getting less than what was actually
awarded to them.
While citing a clutch of rules and
regulations for all motor accident
claims’ tribunals, the court asked the
tribunals to get all bank details (includ-
ing IFSC code), address and PAN num-
bers of the claimants or victims at the
time of trial.
The Court asked the tribunals to
make sure that once the concerned
insurance company or similar bodies
are held liable for compensation, the
amount must be transferred to the
account of the tribunal through National
Electronic Fund Transfer (NEFT) or Real
Time Gross Settlement (RTGS). It fur-
ther held that the tribunal should then
transfer the amount to bank account of
the victim or claimant through NEFT or
RTGS. It asked the tribunals to explicitly
mention all bank account details in their
compensation order.
No CBI probe
into CM’s role
Pay compensation
through
RTGS/NEFT
— Compiled by Prabir Biswas; Illustrations: UdayShankar

LEAD/ Temple Tragedy
With more than 110 dead in the
Putingal fireworks explosion and
scores injured, will these illegal
festivities be stopped or continue to
pander to the majority community
as the state heads for polls?
By Naveen R Nair in
Thiruvananthapuram
Kerala’sDeadlyInferno
24 April 30, 2016
B
Y the sheer number of lives lost—110
dead and more than 350 injured—it is
undoubtedly the second largest tragedy
to hit Kerala. The temple tragedy in
Putingal in Paravoor, Kollam district, set
a new benchmark in horror as badly
burnt bodies were discovered and people
with grievous injuries rushed to nearby hospitals. Only the
2004 tsunami might be a bigger tragedy in terms of the
number of lives lost.
On April 10 at 3.30 am, Kerala woke up to a macabre
dance of death as a fireworks display at a local temple went
horribly wrong. One of the lighted crackers fell into a depot
UP IN FLAMES
The Puttingal Devi Temple premises
moments before the explosion

where unused and high intensity explosives
were stored. What followed was a loud explo-
sion, heard at least two kilometers away, as
leaping balls of fire charred to death dozens
that stood in its way. Many others were
crushed beyond recognition by flying con-
crete and debris.
As the sun rose, a shell-shocked district
administration was quick to reveal that the
temple had been denied permission to con-
duct the fireworks display. It soon became
clear that what took the lives of so many peo-
ple was flouting of laws by the governing
body of the temple which went
ahead with the fireworks ignoring all
safety concerns.
GROSS NEGLIGENCE
Many questions have been raised—why did
the fireworks display which started at
10 pm the previous day go on till the wee
hours of Sunday morning? Why was it not
stopped in spite of policemen being present
at the spot? Why did the district administra-
tion turn a blind eye despite denial
of permission?
As always, politics came in the way. With
elections hardly a month away, the Hindu
vote bank was too precious to be antago-
nized. The sitting MLA from the CPI and
the Congress candidate for the upcoming
polls would obviously not want
to intervene as a BJP-backed
backlash would have hurt their
electoral fortunes. It is believed
that politicians coaxed the
police to stay silent as the
deadly show unravelled. Even
the district collector’s letter
had little value when compared
to the rich electoral haul to
be gained.
It wasn’t as if there wasn’t
enough resistance to the show.
An elderly woman living some
60m from the temple had run
from pillar to post trying to
make the authorities ban the
fireworks which had nearly
destroyed her house and others
the previous year. All her pleas
to the police, the district admin-
istration and the state government fell on
deaf ears.
JUDICIAL INTERVENTION
Finally, the judiciary stepped in as this
tragedy shook its collective conscience.
Justice V Chitambaresh of the Kerala High
Court wrote a letter to the court registrar
seeking to admit a PIL on banning high deci-
bel explosives from fireworks display. This
was an extraordinary situation as it is rare for
a sitting judge to do this. (See Box)
Chitambaresh wrote in his letter: “Life is
the most precious creation on this planet
OFFERING SOLACE
Modi visits victims of the
tragedy at a hospital
“The Supreme Court has come down heavily on Jalikattu in the name of
religious celebrations, then why not fireworks which consume human lives?”
“The right to profess, practice and propagate the religion of one’s choice
under the Art 25 of the Constitution of India does not take in the freedom to
use dangerous crackers.”
“The time is more than ripe for immediate judicial intervention to stop such
manmade tragedies by banning the use of high decibel explosive fire crackers.”
“Rituals and festivals must give way to changing times and the lavish use
of dangerous fireworks in the festival-centric state has to be stopped sooner
than later.”
Strongindictment
ExcerptsofJusticeVChitambaresh’slettertotheKeralaHigh
Court registrar:

which cannot be replaced
by money and right to
life guaranteed under
Article 21 of the
Constitution of India is
very valuable.” The judici-
ary had woken up to
evils that need to be done
away with.
It was obvious that the
Putingal temple authori-
ties grossly violated the
Explosives Act 2008. The
Act clearly states that
“there should be no hous-
es, schools or hospitals
within 100 meters radius
of the fireworks display.
Potassium chlorate which is banned in India
should never be used”.
The fireworks display was planned on an
open ground belonging to the temple, but
was hardly 50 m away from a colony nearby.
This was gross negligence. What’s more,
forensic analysts have now confirmed that
potassium chlorate was used, given the
intensity and havoc the blast caused.
Annamma John, former assistant director at
the forensic department, Government of
26 April 30, 2016
Playingwithfire
Year Location Casualties
1952 Sabarimala 52
1978 Thrissur Pooram 8
1987 Thalaessry Jagadnath 27
Temple
In last three years across Kerala, 213 accidents
involving fireworks have been reported and
451 people have lost their lives. Some of the
firework tragedies in Kerala:
In 1987, 1998, 1999, 2011, 2012 and 2013,
Palakkad saw 50 deaths
Kerala, said: “It is beyond doubt that the
temple had flouted all norms of the Explosive
Act 2008. Preliminary investigation clearly
shows the presence of potassium chlorate
and that too in high quantities. Also the place
is so close to a residential area that any explo-
sion can be fatal. It is unbelievable that such
a thing happened.”
TRADITION VS RULES
This is not the first time that temple adminis-
trators in Kerala have openly flouted rules in
the name of protecting local traditions. Every
year when the temple festival season arrives,
the debate kicks off. By the end of the season,
a few people would have lost their lives during
some of these pyrotechnic displays which go
horribly wrong. But these issues are hardly
ever addressed as the political class in Kerala
doesn’t have the will to do it, fearing a back-
lash from the majority community.
However, the Paravoor tragedy is certain-
ly a rude awakening. That Prime Minister
Modi came all the way from Delhi with an
army of doctors to take stock of the situation
takes the dimension of this tragedy to a dif-
ferent level. Some would argue that Modi
may have had an eye on the forthcoming
assembly elections in the state when he made
LEAD/ Temple Tragedy

IL
the flying visit. But with national and inter-
national media picking up the news, post the
PM’s visit, this could just be the catalyst
needed to stop this malaise forever. The
political class in Kerala may finally have the
courage to act against such festivities, what
with the season of temple festivals getting
under way. If the existing rules are not
enforced in letter and spirit, more lives could
be lost.
Kerala is known as God’s Own Country,
and it is baffling that God takes predomi-
nance over plain logic in India’s most literate
state. The list of such festivities is long in tra-
ditional Kerala. Thrissur Pooram tops the
list. (See Box) It is a festival that is touted in
almost all record books for parading the max-
imum number of caparisoned elephants,
another cruelty that is still under debate. But
perhaps the darker side is the huge fireworks
display organized every year to mark the clos-
ing of the Pooram, leaving the government,
judiciary and the common man mute specta-
tors in spite of a number of accidents that have
taken place in the past. And this year too, work
is in full swing there to put up yet another
grand and potentially dangerous show.
SC RESTRICTIONS
It was after the 2006 accident there that the
Supreme Court placed fresh restrictions on
the use of firecrackers at temple festivals. But
the order, jurists now say, had fallen short of
addressing the fundamental issue of safety. It
only talked about the permissible decibel lev-
els and the use of crackers between 10 pm
and 6 am.
Senior high court lawyer Kaleeshwar Raj
said: “The court seems to have looked at the
sound pollution and timings only, not the
safety aspect. Regulation alone won’t help.
What is needed is total prohibition of the use
of high-grade explosives.’’
A Thrissur-based NGO has now petitioned
the chief and home secretaries of the state to
completely ban the use of firecrackers during
Thrissur Pooram, something the government
is unlikely to do in an election year. However,
there are many devotees who now question
the spiritual value behind the use of fireworks.
As no religious texts call for such extravagant
use of gunpowder and dangerous chemicals,
one wonders what the purpose is.
With the judiciary finally cracking the
whip, the state government can heave a sigh
of relief. The government has wasted no time
in declaring a judicial probe and a thorough
investigation by the crime branch.
Meanwhile the police is conducting raids
across the state and has seized explosives and
gunpowder from various locations. These
were meant to be used for temple festivals in
the coming months.
What is now needed is strong political
will from the next government to stop these
fireworks during festivals. If not, more
Kollams will hit the headlines again and
innocent lives lost.
DANGEROUS COCKTAIL
(Above) Unused fireworks
stacked outside the temple
post the tragedy
(Facing page) Rescue
workers and police clear
debris of buildings which
collapsed in the blaze
It is believed that politicians coaxed the police
to stay silent as the deadly show unravelled.
Even the district collector’s letter had little value
vis-â-vis the rich electoral haul to be gained.

GiantLeakof
OffshoreFinancial
RecordsExposes
GlobalArrayofCrime
andCorruption
A
MASSIVE leak of docu-
ments exposes the offshore
holdings of 12 current and
former world leaders and
reveals how associates of
Russian President Vladi-
mir Putin secretly shuffled
as much as $2 billion
through banks and shadow
companies. The leak also provides details of
the hidden financial dealings of 128 more
politicians and public officials around
the world.
The cache of 11.5 million records shows
how a global industry of law firms and big
banks sells financial secrecy to politicians,
fraudsters and drug traffickers as well as bil-
lionaires, celebrities and sports stars.
These are among the findings of a yearlong
investigation by the International Consortium
of Investigative Journalists, German newspa-
per Süddeutsche Zeitung and more than 100
other news organizations.
The files expose offshore companies con-
trolled by the prime ministers of Iceland and
Pakistan, the king of Saudi Arabia and the
children of the president of Azerbaijan.
They also include at least 33 people and
companies blacklisted by the U.S. government
because of evidence that they’d been involved
in wrongdoing, such as doing business with
Mexican drug lords, terrorist organizations
like Hezbollah or rogue nations like North
Korea and Iran.
One of those companies supplied fuel for
the aircraft that the Syrian government used
to bomb and kill thousands of its own citizens,
U.S. authorities have charged.
“These findings show how deeply
ingrained harmful practices and criminality
are in the offshore world,” said Gabriel
Zucman, an economist at the University of
California, Berkeley and author of The
Hidden Wealth of Nations: The Scourge of
Tax Havens. Zucman, who was briefed on the
media partners’ investigation, said the release
of the leaked documents should prompt gov-
ernments to seek “concrete sanctions” against
jurisdictions and institutions that peddle off-
shore secrecy.
World leaders who have embraced anti-
corruption platforms feature in the leaked
PROBE/ Panama Papers/ Global Investigations
WORLDWIDE WEB OF FRAUD
(L-R) Ramón Fonseca and Jürgen Mossack,
co-founders of the Panama-based firm
Millions of documents show heads of
state, criminals and celebrities using
secret hideaways in tax havens
28 April 30, 2016

documents. The files reveal offshore com-
panies linked to the family of China’s top
leader, Xi Jinping, who has vowed to fight
“armies of corruption,” as well as Ukrainian
President Petro Poroshenko, who has posi-
tioned himself as a reformer in a country
shaken by corruption scandals. The files
also contain new details of offshore deal-
ings by the late father of British Prime
Minister David Cameron, a leader in the
push for tax-haven reform.
The leaked data covers nearly 40 years,
from 1977 through the end of 2015. It
allows a never-before-seen view inside the
offshore world—providing a day-to-day,
decade-by-decade look at how dark money
flows through the global financial system,
breeding crime and stripping national
treasuries of tax revenues.
Most of the services the offshore indus-
try provides are legal if used by the law
abiding. But the documents show that
banks, law firms and other offshore players
have often failed to follow legal require-
ments that they make sure their clients are
not involved in criminal enterprises, tax
dodging or political corruption….
The documents make it clear that major
banks are big drivers behind the creation of
hard-to-trace companies in the British
Virgin Islands, Panama and other offshore
havens. The files list nearly 15,600 paper
companies that banks set up for clients who
want keep their finances under wraps,
including thousands created by interna-
tional giants UBS and HSBC.
The records reveal a pattern of covert
maneuvers by banks, companies and peo-
ple tied to Russian leader Putin. The
records show offshore companies linked to
this network moving money in transactions
as large as $200 million at a time. Putin
associates disguised payments, backdated
documents and gained hidden influence
within the country’s media and automotive
industries, the leaked files show....
T
he leaked records—which were
reviewed by a team of more than
370 journalists from 76 countries—
come from a little-known but powerful law
firm based in Panama, Mossack Fonseca,
that has bran-ches in Hong Kong, Miami,
Zurich and more than 35 other places
around the globe. The firm is one of the
world’s top creators of shell companies, cor-
porate structures that can be used to hide
ownership of assets. The law firm’s leaked
internal files contain information on
214,488 offshore entities connected to
people in more than 200 countries and
territories. ICIJ will release the full list of
companies and people linked to them in
early May....
Mossack Fonseca’s fingers are in Africa’s
diamond trade, the international art mar-
ket and other businesses that thrive on
secrecy. The firm has serviced enough
Middle East royalty to fill a palace. It’s
helped two kings, Mohammed VI of
Morocco and King Salman of Saudi
Arabia, take to the sea on luxury yachts.
In Iceland, the leaked files show how
Prime Minister Sigmundur David
Gunnlaugsson and his wife secretly
owned an offshore firm that held millions
of dollars in Icelandic bank bonds during
that country’s financial crisis.
The files include a convicted money
launderer who claimed he’d arranged a
$50,000 illegal campaign contribution
used to pay the Watergate burglars, 29 bil-
lionaires featured in Forbes Magazine’s list
of the world’s 500 richest people and movie
star Jackie Chan, who has at least six com-
panies managed through the law firm.
As with many of Mossack Fonseca’s
clients, there is no evidence that Chan used
his companies for improper purposes.
Having an offshore company isn’t illegal.
For some international business transac-
tions, it’s a logical choice….
The files contain new details about
major scandals ranging from England’s
most infamous gold heist to the bribery
allegations convulsing FIFA, the body that
rules international soccer.
The leaked documents reveal that the
law firm of Juan Pedro Damiani, a mem-
ber of FIFA’s ethics committee, had busi-
ness relationships with three men who
have been indicted in the FIFA scandal—
former FIFA vice president Eugenio
Figueredo and Hugo and Mariano Jinkis,
the father-son team accused of paying
bribes to win broadcast rights to Latin
American soccer events. The records show
that Damiani’s law firm in Uruguay repre-
sented an offshore company linked to
HALL OF SHAME: Kin of Chinese President Xi Jinping and British PM David Cameron are named in
the Panama files
Mossack Fonseca’s
fingers are in Africa’s
diamond trade and
other businesses that
thrive on secrecy.

the Jinkises and seven companies linked to
Figueredo….
The world’s best soccer player, Lionel
Messi, is also found in the documents. The
records show Messi and his father were
owners of a Panama company: Mega Star
Enterprises Inc. This adds a new name
to the list of shell companies known to
be linked to Messi. His offshore dealings
are currently the target of a tax evasion case
in Spain.
W
hether they’re famous or
unknown, Mossack Fonseca
works aggressively to protect its
clients’ secrets. In Nevada, the records
show, the law firm tried to shield itself and
its clients from the fallout from a legal
action in U.S. District Court by removing
paper records from its Las Vegas branch
and having its tech gurus wipe electronic
records from phones and computers.
The leaked files show the firm regularly
offered to backdate documents to help its
clients gain advantage in their financial
affairs. It was so common that in 2007 an
email exchange shows firm employees talk-
ing about establishing a price structure—
clients would pay $8.75 for each month far-
ther back in time that a corporate docu-
ment would be backdated.
In a written response to questions from
ICIJ and its media partners, the firm said it
“does not foster or promote illegal acts.
Your allegations that we provide sharehold-
ers with structures supposedly designed to
hide the identity of the real owners are
completely unsupported and false.”
The firm added that the backdating of
documents “is a well-founded and accepted
practice” that is “common in our industry
and its aim is not to cover up or hide unlaw-
ful acts.”....
The law firm’s co-founder, Ramón
Fonseca, said in a recent interview on
Panamanian television that the firm has no
responsibility for what clients do with the
offshore companies that the firm sells. He
compared the firm to a “car factory” whose
liability ends once the car is produced.
Blaming Mossack Fonseca for what people
do with their companies would be like
blaming a carmaker “if the car was used in
a robbery,” he said.
Until recently, Mossack Fonseca has
largely operated in the shadows. But it has
come under growing scrutiny as govern-
ments have obtained partial leaks of the
firm’s files and authorities in Germany and
Brazil began probing its practices.
In February 2015, Süddeutsche Zeitung
reported that German law-enforcement
agencies had launched a series of raids
targeting one of the country’s biggest
banks, Commerzbank, in a tax-fraud inves-
tigation that authorities said could lead to
criminal charges against Mossack Fonseca
employees.
In Brazil, the law firm has become a tar-
get in a bribery and money laundering
investigation dubbed “Operation Car
Wash” (“Lava Jato,” in Portuguese), which
has led to criminal charges against leading
politicians and an investigation of popular
former president Luiz Inacio Lula da Silva.
The scandal threatens to unseat current
President Dilma Rousseff….
Reporters at Süddeutsche Zeitung
obtained millions of records from a confi-
dential source and shared them with ICIJ
and other media partners. The news outlets
involved in the collaboration did not pay for
the documents.
Before Süddeutsche Zeitung obtained
the leak, German tax authorities bought a
smaller set of Mossack Fonseca documents
from a whistleblower, a move that triggered
the raids in Germany in early 2015. This
smaller set of files has since been offered to
tax authorities in the U.K., the U.S. and
other countries, according to sources with
knowledge of the matter.
The larger set of files obtained by the
news organizations offers more than a
snapshot of one law firm’s business meth-
ods or a catalog of its more unsavory cus-
tomers. It allows a far-reaching view into
an industry that has worked to keep its
practices hidden—and offers clues as to
why efforts to reform the system have
faltered. The story of Mossack Fonseca is,
in many ways, the story of the offshore sys-
tem itself.
B
efore dawn on Nov. 26, 1983, six
robbers slipped into the Brink’s-
Mat warehouse at London’s
Heathrow Airport. The thugs tied up the
BELLIGERENT
POSTURE
((L-R) Iceland PM
Sigmundur David
Gunnlaugsson is
defiant even in
resignation; the
establishment of
Russian President
Vladimir Putin is
vehemently
defending him
30 April 30, 2016

security guards, doused them in gasoline,
lit a match and threatened to set them afire
unless they opened the warehouse’s vault.
Inside, the thieves found nearly 7,000 gold
bars, diamonds and cash.
“Thanks ever so much for your help.
Have a nice Christmas,” one of the crooks
said as they departed.
British media dubbed the heist the
“Crime of the Century.” Much of the loot—
including the cash reaped by melting the
gold and selling it—was never recovered.
Where the missing money went is a mys-
tery that continues to fascinate students of
Eng-land’s underworld.
Now documents within Mossack
Fonseca’s files reveal that the law firm and
its co-founder, Jürgen Mossack, may have
helped the conspirators keep the spoils out
of the hands of authorities by protecting a
company tied to Gordon Parry, a London
wheeler-dealer who laundered money for
the Brink’s-Mat plotters.
Sixteen months after the robbery, the
records show, Mossack Fonseca set up a
Panama shell company called Feberion Inc.
Jürgen Mossack was one the company’s
three “nominee” directors, a term used in
the business for stand-ins who control a
company on paper but exercise no real
authority over its activities.
An internal memo written by Mossack
shows he was aware in 1986 that the com-
pany was “apparently involved in the man-
agement of money from the famous theft
from Brink’s-Mat in London. The company
itself has not been used illegally, but it could
be that the company invested money thr-
ough bank accounts and properties that
was illegitimately sourced.”
Mossack Fonseca records from 1987
make it clear that Parry was behind
Feberion. Rather than help authorities gain
access to Feberion’s assets, the law firm
took steps that prevented U.K. police from
gaining control of the company, the rec-
ords show.
After police obtained the two certifi-
cates that controlled the company’s owner-
ship, Mossack Fonseca arranged for
Feberion to issue 98 new shares, a move
that appears to have effectively wrested
control away from investigators, the leaked
records show.
It was not until 1995—three years after
Parry was sent to prison for his role in the
gold caper—that Mossack Fonseca ended
its business relationship with Feberion.
A spokesman for the law firm said any
allegations the firm helped shield the pro-
ceeds of the Brink’s-Mat robbery “are
entirely false.” ….
The offshore system relies on a sprawl-
ing global industry of bankers, lawyers,
accountants and these go-betweens who
work together to protect their clients’
secrets. These secrecy experts use anony-
mous companies, trusts and other paper
entities to create complex structures that
can be used to disguise the origins of dirty
money.
“They are the gasoline that runs the
engine,” says Robert Mazur, a former U.S.
drug agent and author of The Infiltrator:
My Secret Life Inside the Dirty Banks Beh-
ind Pablo Escobar’s Medellín Cartel.
“They’re an extraordinarily important piece
of the formula of success for criminal
organizations.”
Mossack Fonseca told ICIJ that it fol-
lows “both the letter and spirit of the law.
Because we do, we have not once in nearly
40 years of operation been charged with
criminal wrongdoing.”
T
he men who founded the firm
decades ago—and continue today as
its main partners—are well-known
figures in Panamanian society and politics.
Jürgen Mossack is a German immigrant
whose father sought a new life in Panama
for his family after serving in Hitler’s
Waffen-SS during World War II. Ramón
Fonseca is an award-winning novelist who
has worked in recent years as an adviser to
Panama’s president. He took a leave of
absence as presidential adviser in March
after his firm was implicated in the
Most of the services
the offshore industry
provides are legal if
used by the law
abiding.
IT GETS MESSIER
(Extreme left) Jackie
Chan has at least six
companies
managed through
the law firm
(Left) Soccer star
Lionel Messi and his
father also own a
Panama company

Brazil scandal and ICIJ and its partners
began to ask questions about the law firm’s
practices.
From its base in Panama, one of the
world’s top financial secrecy zones,
Mossack Fonseca seeds anonymous com-
panies in Panama, the British Virgin
Islands and other financial havens….
An ICIJ analysis of the leaked files
found that more than 500 banks, their sub-
sidiaries and branches have worked with
Mossack Fonseca since the 1970s to help
clients manage offshore companies. UBS
set up more than 1,100 offshore companies
through Mossack Fonseca. HSBC and its
affiliates created more than 2,300....
In its efforts to protect Feberion Inc., the
shell company linked to the Brink’s-Mat
gold heist, Mossack Fonseca used the serv-
ices of a Panama-based firm, Chartered
Management Company, run by Gilbert R.J.
Straub, an American expatriate who played
a cameo role in the Watergate scandal.
In 1987, as U.K. police were investigat-
ing the shell company, Jürgen Mossack and
Feberion’s other paper directors resigned,
with the understanding they’d be replaced
by new directors appointed by Straub’s
Chartered Management, the secret files
show.
Straub was eventually caught in a U.S.
Drug Enforcement Administration sting
that was unrelated to the Brink’s-Mat case,
according to Mazur, the former undercover
agent. During one of his deep-cover stints,
Mazur built the case that led Straub to
plead guilty to money laundering in 1995.
Believing Mazur was a well-connected
money launderer, Straub tried to establish
his own criminal bona fides, Mazur says, by
describing how he’d illegally channeled
cash to President Nixon’s 1972 re-election
campaign.
N
ick Kgopa’s father died when Nick
was 14. His father’s workmates at a
gold mine in northern South
Africa said Nick’s dad had been killed by
chemical exposure.
Nick and his mother and his younger
brother, who is deaf, survived thanks to
monthly checks from a fund for widows
and orphans of mineworkers.
One day the payments stopped.
His family was one of many that lost out
because of a $60 million investment fraud
pulled off by South African businessmen.
Prosecutors alleged that a group of individ-
uals connected to an asset management
company, Fidentia, had schemed to loot
millions from investment funds—inclu-
ding the mineworkers’ death benefits pool
that was supporting some 46,000 widows
and orphans.
Mossack Fonseca’s leaked documents
show that at least two of the men involved
in the fraud used the Panama-based law
firm to create offshore companies—and
that Mossack Fonseca was willing to help
one of the fraudsters protect his money
even after authorities publicly linked him to
the scandal.
Ponzi schemers and other fraudsters
who bilk large numbers of victims often use
offshore structures to pull of their schemes
or hide the proceeds. The Fidentia case isn’t
the only big-ticket fraud that appears in the
files of Mossack Fonseca’s clients.
In Indonesia, for example, small
investors claim a company incorporated by
Mossack Fonseca in the British Virgin
Islands was used to scam 3,500 people out
of at least $150 million.
“We really need that money for our son’s
education fee this April,” one Indonesian
investor emailed Mossack Fonseca in April
2007 after payouts had stopped. “You can
give us any suggestion something we can
do,” the investor asked in broken English
after seeing Mossack Fonseca’s name on
the investment fund’s advertising leaflet....
Mossack Fonseca also created offshore
structures for Steven Goodwin, a man that
prosecutors later claimed had played an
“instrumental role” within the Fidentia
swindle. As the scandal broke in 2007,
Goodwin flew to Australia, then to the U.S.,
where a Mossack Fonseca lawyer met with
him at a luxury hotel in Manhattan to dis-
cuss his offshore holdings, the firm’s inter-
nal records show.
The firm official later wrote that he and
Goodwin “spoke deeply” about the Fidentia
scandal and that he had “convinced Good-
win to better protect” his offshore compa-
ny’s assets by passing them to a third
party….
In April 2008, the FBI arrested
There was a pattern
of covert maneuvers
by companies and
people tied to
Russian leader Putin.
LONG TRAIL OF
CRIME
Brazilian police
crack down on
Mossack Fonseca
office as part of
Operation
Car Wash
32 April 30, 2016

Goodwin in Los Angeles and sent him back
to South Africa, where he pleaded guilty to
fraud and money laundering. He was sen-
tenced to 10 years in prison.
A month after Goodwin’s sentencing, an
employee at Mossack Fonseca suggested a
plan for frustrating South African prosecu-
tors who were expected to start digging
into assets linked to Goodwin’s offshore
company, Hamlyn Property LLP, which
had been set up to buy real estate in South
Africa.
The employee proposed having an
accountant “prepare” audits for 2006 and
2007 “to try to prevent the prosecutor from
taking actions against the entities behind
Hamlyn.” He set off “prepare” in quote
marks in his email. It’s unclear whether the
proposal was adopted.
Mossack Fonseca did not answer ques-
tions from ICIJ about its relationship with
Goodwin. A representative for Goodwin
told ICIJ that Goodwin “had nothing what-
soever” to do Fidentia’s collapse “or any-
thing directly or indirectly to do with the
46,000 widows and orphans.”
O
n Feb. 10, 2011, an anonymous
company in the British Virgin
Islands named Sandalwood
Continental Ltd. loaned $200 million to an
equally shadowy firm based in Cyprus
called Horwich Trading Ltd.
The following day, Sandalwood assig-
ned the rights to collect payments on the
loan—including interest—to Ove Financial
Corp., a mysterious company in the British
Virgin Islands.
For those rights, Ove paid $1. But the
money trail didn’t end there. The same day,
Ove reassigned its rights to collect on the
loan to a Panama company called Inter-
national Media Overseas. It too paid $1. In
the space of 24 hours the loan had, on
paper, traversed three countries, two banks
and four companies, making the money all
but untraceable in the process.
There were plenty of reasons why the
men behind the transaction might want it
disguised, not least of all because the
money trail came uncomfortably close to
Russian leader Vladimir Putin.
St. Petersburg-based Bank Rossiya, an
institution whose majority owner and
chairman has been called one of Putin’s
“cashiers,” established Sandalwood Conti-
nental and directed the money flow.
International Media Overseas, where
rights to the interest payments from the
$200 million appear to have landed, was
controlled, on paper, by one of Putin’s old-
est friends, Sergey Roldugin, a classical cel-
list who is godfather to Putin’s eldest
daughter.
The $200 million loan was one of
dozens of transactions totaling at least $2
billion found in the Mossack Fonseca files
involving people or companies linked to
Putin. They formed part of a Bank Rossiya
enterprise that gained indirect influence
over a major shareholder in Russia’s biggest
truck maker and amassed secret stakes in a
key Russian media property.
Suspicious payments made by Putin’s
cronies may have in some cases been
designed as payoffs, possibly in exchange
for Russian government aid or contracts.
The secret documents suggest that much of
the loan money originally came from a
bank in Cyprus that at the time was major-
ity owned by the Russian state-controlled
VTB Bank.
In a media conference call, Putin
spokesman Dmitry Peskov said the govern-
ment wouldn’t reply to “honey-worded
queries” from ICIJ or its reporting part-
ners, because they contain questions that
“have been asked hundreds of times and
answered hundreds of times.”
Often, Mossack Fonseca appeared not
to realize who its customers were. A 2015
internal audit found that the law firm knew
the identities of the real owners of just 204
of 14,086 companies it had incorporated in
Seychelles, a tax haven in the Indian Ocean.
British Virgin Islands authorities fined
Mossack Fonseca $37,500 for violating
anti-money-laundering rules because the
firm incorporated a company for the son of
former Egyptian President Hosni Mubarak
but failed to identify the connection, even
after the father and son were charged with
corruption in Egypt. An internal review by
the law firm concluded, “our risk assess-
ment formula is seriously flawed.”
I
n all, an ICIJ analysis of the Mossack
Fonseca files identified 61 family mem-
bers and associates of prime ministers,
presidents or kings.
The records show, for example, that the
family of Azerbaijan President Ilham
Aliyev used foundations and companies
Mossack Fonseca
works aggressively
to protect its clients’
secrets—be they
famous or not.
ERASING EVIDENCE
Fonseca tried to prove
that its Las Vegas
office wasn’t its branch
office at all

in Panama to hold secret stakes in gold
mines and London real estate. The children
of Pakistani Prime Minister Nawaz Sharif
also owned London real estate through
companies created by Mossack Fonseca,
the law firm’s records show.
Family members of at least eight cur-
rent or former members of China’s Polit-
buro Standing Committee, the country’s
main ruling body, have offshore companies
arranged though Mossack Fonseca. They
include President Xi’s brother-in-law, who
set up two British Virgin Islands companies
in 2009.
Representatives for the Azeri, Pakistani
and Chinese leaders did not respond to
requests for comment.
T
he list of world leaders who used
Mossack Fonseca to set up offshore
entities includes the current presi-
dent of Argentina, Mauricio Macri, who
was director and vice president of a
Bahamas company managed by Mossack
Fonseca when he was a businessman and
the mayor of Argentina’s capital, Buenos
Aires. A spokesman for Macri said the pres-
ident never personally owned shares in the
firm, which was part of his family’s busi-
ness.
During the bloodiest days of Russia’s
2014 invasion of the Ukraine’s Donbas
region, the documents show, representa-
tives of Ukrainian leader Petro Poroshenko
scrambled to find a copy of a home utility
bill for him to complete the paperwork to
create a holding company in the British
Virgin Islands.
A spokesperson for Poroshenko said the
creation of the company had nothing to do
with “any political and military events in
Ukraine.” Poroshenko’s financial advisers
said the president didn’t include the BVI
firm in his 2014 financial disclosures
because neither the holding company nor
two related companies in Cyprus and the
Netherlands have any assets. They said that
the companies were part of a corporate
restructuring to help sell Poroshenko’s con-
fectionery business.
When Sigmundur David Gunnlaugsson
became Iceland’s prime minister in 2013 he
concealed a secret that could have damaged
his political career. He and his wife shared
ownership in an offshore company in the
British Virgin Islands when he entered par-
liament in 2009. He sold his stake in the
company months later to his wife for $1.
The company held bonds originally
worth millions of dollars in three giant
Icelandic banks that failed during the 2008
global financial crash, making it a creditor
in their bankruptcies. Gunnlaugsson’s gov-
ernment negotiated a deal with creditors
last year without disclosing his family’s
financial stake in the outcome.
Gunnlaugsson has denied in recent
days that his family’s financial interests
influenced his stances. The leaked records
do not make it clear whether Gunnlaugs-
son’s political positions benefited or hurt
the value of the bonds held through the off-
shore company.
In an interview with an ICIJ media
partners, Reykjavik Media and SVT, Gunn-
laugsson denied hiding assets. When he
was confronted with the name of the off-
shore company linked to him—Wintris
Inc.—the prime minister said “I’m starting
to feel a bit strange about these questions
because it’s like you are accusing me of
something.”
Soon after, he ended the interview.
Four days later, his wife took the matter
public, posting a note on Facebook assert-
ing that the company was hers, not his,
and that she had paid all taxes on it.
Since then, members of Iceland’s parlia-
ment have questioned why Gunnlaugsson
never disclosed the offshore company, with
one lawmaker calling for the prime minis-
ter and his government to resign.
The prime minister has fought back,
putting out an eight-page statement argu-
ing he wasn’t required to publicly report his
connection to Wintris because it was really
owned by his wife and because it was
“merely a holding company, not a company
engaged in commercial activities.”
I
n 2005, a tour boat called the Ethan
Allen sank in New York’s Lake George,
drowning 20 elderly tourists. After the
survivors and families of the dead sued,
they learned the tour company had no
insurance because fraudsters had sold it a
fake policy.
Malchus Irvin Boncamper, an account-
ant on the Caribbean island of St. Kitts,
pleaded guilty in a U.S. court in 2011 to
helping the con artists launder proceeds of
ICIJ analysis of the
files identified 61 kins
and associates of
prime ministers,
presidents or kings.
MINING TRUTH
State heads are
found to have
held secret
stakes in gold
mines
34 April 30, 2016

IL
their frauds.
This created a problem for
Mossack Fonseca, because Bon-
camper had served as the front
man—a “nominee” director—for
30 companies created by the law
firm.
Once it learned of Boncamper’s
criminal conviction, Mossack
Fonseca took quick action. It told
its offices to replace Boncamper as
director of the companies — and to
backdate the records in a way that
made it appear the changes had
taken place, in some cases, a
decade earlier.
The Boncamper case is one of the exam-
ples in the leaked files showing the law firm
using questionable tactics to hide its own
methods or its customers’ activities from
legal authorities.
In the “Operation Car Wash” case in
Brazil, prosecutors allege that Mossack
Fonseca employees destroyed and hid doc-
uments to mask the law firm’s involvement
in money laundering. A police document
says that, in one instance, an employee of
the firm’s Brazil branch sent an email
instructing co-workers to hide records
involving a client who may have been the
target of a police investigation: “Do not
leave anything. I will save them in my car or
at my house.”
In Nevada, the leaked files show,
Mossack Fonseca employees worked in late
2014 to obscure the links between the law
firm’s Las Vegas branch and its headquar-
ters in Panama in anticipation of a U.S.
court order requiring it to turn over infor-
mation on 123 companies incorporated by
the law firm. Argentine prosecutors had
linked those Nevada-based companies to a
corruption scandal involving an associate
of former presidents Néstor Kirchner and
Cristina Fernández de Kirchner.
In an effort to free itself from the Ame-
rican court’s jurisdiction, Mossack Fonseca
claimed that its Las Vegas office, MF
Nevada, wasn’t in fact a branch office at all.
It said it had no control over the office.
The firm’s internal records... indicate
that the firm controlled MF Nevada’s bank
account and the firm’s co-founders and
another Mossack Fonseca official owned
100 percent of MF Nevada.
To erase evidence of the connection, the
law firm arranged to remove paper docu-
ments from the branch and worked to
delete computer traces of the link between
the Nevada and the Panama operations.....
One big worry, an internal email said, was
that the branch’s manager might be too
“nervous” to carry out the effort, making it
easy for investigators to discover “that we
are hiding something.”
Mossack Fonseca declined to answer
questions about the Brazil and Nevada
affairs, but denied generally that it had
obstructed investigations or covered up
improper activities….
I
n 2013, U.K. leader David Cameron
urged his country’s overseas territo-
ries—including the British Virgin
Islands—to work with him to “get our own
houses in order” and join the fight against
tax evasion and offshore secrecy. He could
have looked no further than his late father
to see how challenging that would be.
Ian Cameron, a stockbroker and multi-
millionaire, was a Mossack Fonseca client
who used the law firm to shield his invest-
ment fund, Blairmore Holdings, Inc., from
U.K. taxes.
The fund’s name came from Blairmore
House, his family’s ancestral country estate.
Mossack Fonseca registered the investment
fund in Panama even though many of its
key investors were British. Ian
Cameron controlled the fund
from its birth in 1982 until his
death in 2010.
A prospectus for investors
said the fund “should be managed
and conducted so that it does not
become resident in the United
Kingdom for United Kingdom
taxation purposes.” ....
Ian Cameron’s tax-haven his-
tory is an example of how deeply
offshore secrecy is woven into the
lives of political and financial
elites around the world.... The
weight of that self-interest has
made reform difficult.
In the U.S., for example, states like
Delaware and Nevada, which have allowed
company owners to remain anonymous,
continue to fight against efforts to require
greater corporate transparency….
In April 2013, after ICIJ released its
“Offshore Leaks” stories based on confiden-
tial documents from the British Virgin
Islands and Singapore, some Mossack
Fonseca customers emailed the firm look-
ing for reassurance that their offshore hold-
ings were safe from scrutiny.
Mossack Fonseca told customers not to
worry. It said its commitment to its clients’
privacy “has always been paramount, and
in this regard your confidential informa-
tion is stored in our state-of-the-art data
center, and any communication within our
global network is handled through an
encryption algorithm that complies with
the highest world-class standards.”
(This story was reported and written
by Bastian Obermayer, Gerard Ryle,
Marina Walker Guevara, Michael Hudson,
Jake Bernstein, Will Fitzgibbon, Mar
Cabra, Martha M. Hamilton, Frederik
Obermaier, Ryan Chittum, Emilia Diaz-
Struck, Rigoberto Carvajal, Cécile Schilis-
Gallego, Marcos Garcia Rey, Delphine
Reuter, Matthew Caruana Galizia, Hamish
Boland-Rudder, Miguel Fiandor and
Mago Torres)
—Courtesy ProPublica
NO SANCTITY FOR LIFE
The sinking of the boat,
Ethan Allen, in New York
brought to light a big
insurance fraud perpetrated
by the firm

PROBE/ Panama Papers/Money Trail
While these papers have
brought the focus back on
black money, the harsh fact
is that big countries are
involved. So how successful
will the Indian government be
in pursuing a probe?
By Ajith Pillai
The
Powers
BehindTax
Havens
W
ILL the sensation-
al revelations of
financial fraud in
the Panama Pa-
pers bring to book
Indians guilty of
stashing away
black money in the tax haven strategically
located between North and South America?
The Modi government’s initial reaction to the
disclosures was almost immediate. It quickly
set up an expert team to investigate the
Panamanian link after the story broke last
The Cayman Islands
United States of America
36 April 30, 2016

fortnight in the international media.
The team drawn from officials of different
arms of financial intelligence, the tax depart-
ment and the RBI has been directed to fast-
track their probe and report directly to the
prime minister. However, a question mark
hovers over whether the team will make much
headway given the obstacles before it and
whether it will end up as another exercise in
the selective naming and shaming of political
rivals and, perhaps, even dispensable friends.
In fact, Union finance minister Arun
Jaitley almost gave a preview of the shape of
investigations to come when he revealed to
the media in Kolkata that the Congress will be
on the backfoot once the probe gets under
way. “An impartial multi-agency probe is
going on. When the details will come out, the
Congress will not have many reasons to cele-
brate,” he said. Jaitley may have been refer-
ring to the fact that the Panama Papers cover
the period from the 1970s to 2015 when the
Congress was largely in power and, therefore,
its leaders were more likely to be guilty of fun-
neling monies abroad.
However, investigators may not be able
UnitedWorld
ofTaxHavens
Luxembourg
Germany
Lebanon
Switzerland
UAE
Bahrain
Hong Kong
Singapore

India Legal 30 April 2016

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