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Reliance ADAG Co’s Smuggled Tina Ambani’s Yacht To Evade Customs ? Anil Ambani Group Had Denied It in 2009.

17 May 2012 4 Comments

TIAN Luxury Yact

17 May 2012, Mumbai: From the Desk of the Jt.Editor of RTI Activist News, Krishnaraj Rao. Three years ago, the media was awash with reports of Anil Ambani’s purchase of a yacht named ‘Tian’ for his wife Tina. It was painted as a story about Anil’s determination to outdo brother Mukesh Ambani, who had bought his wife Nita a plush corporate jet. And then, in 2009, Tina’s birthday present turned out to be tainted by customs duty evasion. A customs notice slapped on Tina, Anil, Reliance ADAG and two group companies in February 2011 has now surfaced through whistleblowers. This 47-page notice has step-by-set details of the modus operandi: http://tinyurl.com/Customs-Notice-Tian-Yacht-2011

 

Government, shareholders of Reliance ADAG and captains of industry should sit up and take note, because the notice reveals not merely duty evasion, but a blatant abuse of corporate governance and accounting principles. No less than four Reliance ADAG group companies have been used to create a cover-up of Rs 250 – 400 cr – the estimated value of the yacht. (TiAn, meaning “Peace” in Chinese Mandarin, is a name created using the first two letters of Tina and Anil’s names). ADAG claims that the boat is foreign flag boat, and hence does not require any import duty to be paid in India.

This scam was masterminded by Lt. Col. (Retd) Gautam Dutta, Director, Marine Solutions, who is extremely well known in the world of yachting, with the help of Sohel Kazani, Partner, Assar Lines. Also neck-deep in it is Hari Nair, Sr VP, Group Finance, Reliance ADAG — one of those arrested in connection with 2G scam. Hari Nair organized the finance for the purchase. Payments for TIAN was made by made by Gateway Net Trading, another ADAG associate of Reliance Communications. Both these companies are in non-taxable jurisdictions. Incidentally, Gautam Dutta’s father — Maj Gen (retd) S Dutta – is former Sr VP at Reliance ADAG.

Tian is a 112 feet yacht (a Custom line 112 Ferretti) imported from Italy by Marine Solutions for Ammolite Holdings, a Reliance ADAG group company. It was declared as a transshipment cargo (TP) – on which duty is not paid. It was declared to be a used and not a new yacht. The yacht came into India on another cargo and according to the yacht’s papers, was headed for Colombo. The yacht was brought to India and its possession was given to ADAG by way of charter from a foreign company and was declared as TP cargo.

Tian is generally anchored off Oyster rocks near Gateway of India. It has 5 cabins (10 berths) and six bathrooms, and is considered to be the marine equivalent of a Rolls Royce.

THE MODUS OPERANDI DESCRIBED IN THE 47-PAGE SHOW-CAUSE NOTICE served on Anil and Tina Ambani, Reliance ADAG, Reliance Transport & Travels Pvt. Ltd., Ammolite Holdings Ltd. (an ADAG group company): “To fully appreciate the intricate design adopted to import the luxury yacht  without paying any customs duty, it is important to understand  role played by each of the crucial players briefly:-

 

(i)         Shri Gautama Dutta, Director, M/s Marine Solutions brokered the sale of the impugned yacht to Shri Anil Ambani from M/s Ferretti.  He in association with Shri Sohel Kazani, Partner, M/s Assar Line, designed the modus operandi to bring the yacht as TP Cargo and evade applicable customs duty. He also allowed the name of his company M/s Marine Solutions to be used as importer for the Cradle and Lifting System of the yacht on the basis of fabricated invoice.

(ii)        Shri Sohel Kazani, Partner, M/s Assar Lines and Director, CHA M/s Interport Impex, designed the modus operandi which was improvised upon by Shri Gautama Dutta and executed in the import of Yacht Tian. Had this case not been detected they had plan to adopt the same modus operandi for import of other yachts as well.

(iii)       Shri Hari Nair, Senior Vice President, Group Finance, M/s Reliance ADAG, has designed the fund flow  arrangements for the purchase of yacht Tian. He, with the help of Shri V.R. Mohan and Shri Gautama Dutta of M/s Marine Solutions facilitated import of the yacht Tian into India and executed the plan of duty evasion.

(iv)       Shri V.R. Mohan, Director, M/s Ammolite Holdings Ltd. was an accomplice of Shri Hari Nair and allowed acquisition of the yacht in the name of M/s Ammolite and kept signing documents required for its import into India and for execution of the plan of duty evasion on the yacht.

(v)       Shri Tushar Motiwala, Director, M/s. Reliance Transport & Travels Pvt. Ltd., was involved in plan of camouflaging the import of the yacht as if it was brought under Charter Hire for temporary period. He also used and dealt with the smuggled yacht at Goa for the new year celebration along with other members of Ambani family.

(vi) Mrs. Tina Ambani and Shri Anil Ambani purchased this yacht for their personal use and with the assistance of Shri Hari Nair, Vice President of M/s Reliance ADAG, routed the money for the purchase and effected the import of the yacht adopting the aforesaid modus operandi with the help of Shri Gautama Dutta and Shri Sohel Kazani in order to evade applicable customs duty and were the main beneficiary of the design.”

SUMMARY OF FACTS ON VIDYUT KALE’S BLOG…

This crucial document came to light because of the efforts of Vidyut Kale, a blogger, who wrote about this in her blog titled The Unromantic Gift: http://aamjanata.com/sailgate-the-unromantic-gift/

Incidentally, Ms Kale was served a legal notice yesterday by Lt. Col. Gautam Datta to pull a blog that put out details of his continuing manipulations titled, Sailgate – The Party that Wasn’t: http://aamjanata.com/sailgate-the-party-that-wasnt/

Ms.Kale can be contacted at wide.aware@gmail.com.

The report in Times of India on 8th May 2009 states the below :

 Anil Ambani group denies smuggling yacht

NEW DELHI: Reliance Anil Ambani Group on Thursday refuted allegations levelled by Mumbai Customs that the corporate house had “smuggled” a luxurious yacht into Indian waters.

“The yacht was duly and validly brought into Indian waters after the necessary approvals granted by the Customs department,” a group spokesperson said on phone.

The Mumbai Customs had levelled the allegation in an affidavit filed in Mumbai High Court.

“The allegation levelled by the department are totally baseless and will be refuted in an affidavit by the group to be filed in the Honourable High Court tomorrow,” the spokesperson said sildenafil citrate generic.

The customs department has alleged that Anil Dhirubhai Ambani Group company Ammolite Holdings has violated the Customs Act by “smuggling in” a luxurious yacht, which is believed to be a gift by Anil to his wife.

“The imported luxury yacht ‘Tian’ was imported in contravention of Section 111(m) of the Customs Act, hence is liable for confiscation. The petitioner has indulged in smuggling by violating the provisions of the Act and in league with others to evade duties,” Assistant Commissioner of Customs S R Vichare stated in reply to a petition filed by Ammolite Holdings challenging seizure of the yacht.

Ammolite Holdings has filed the petition in Bombay High Court challenging seizure of the yacht. The yacht was seized by the customs department in February for alleged duty evasion. It was bought by Ammolite Holdings last October and it has been chartered by Reliance Transport and Travels Ltd, another ADAG company.

4 Comments »

  • Shaumik said:

    This is simply cheating the shareholders and the government. I hold shares in both Reliance Capital and Communications. We shareholders strive hard to buy Alto’s or Santro’s on loan, and here the promoters buy luxury yachts with the shareholders funds.

    Giving loans to group associate companies incorporated in foreign countries without paperwork is a crime in itself. That too making payments to 3rd parties. This is height of corporate MisGovernance. Today
    if i sell my shares, i dont even get 25% of my investment. No doubt where the 75% erosion of shareholders value has landed into. Into the Mumbai High seas.

  • Jignesh Mehta said:

    A show cause notice dated February 2011, and no action till date. The show cause notice is also c.c. to Income Tax and Enforcement Directorate. If Income Tax and Enforcement have not made investigation, then what stops customs to come out with final report on this case which it emphatically states is evasion of custom duty.
    Somethings even RTI cannot expedite.

    Cannot fully blame Anil Ambani on duty evasion as he opted for a route suggested to him. But his executives with knowledge of finance and import laws should have done complete due diligence before adopting it.

    Unfortunately a genuine blogger like Vidyut, who is passionately bringing out such cases in public has to undergo the agony of working in public interest.

    The takedown notice is a slap on freedom of speech and expression. We should all support vidyut in fighting it to the end.

  • Rohit Ahuja said:

    This is scandalous. Showcause notice in Feb 2011 and no penalty or action till May 2012. On top of it, people exposing it get slapped with legal notices. Absurd. There is no hope as the ones who evade taxes make enough money to take the long legal route. And the ones who expose are under threat of the legal system as they cannot match the legal battalions of the corrupt. There should be a fund to defend whistleblowers too. Else RTI ACT and Lokpal have no meaning in practical life.

  • Bystander said:

    The author is brave but we common citizens are all bystanders who keep watching big shots get away with anything and everything.

    This case is under settlement proceedings of Customs department at Bandra, Mumbai. And soon it will be settled without any penal action. At most by paying customs duty which was logical from Day one. See the way the same Group has settled a major case of Sebi by doing a consent order. Its all over the net. The UBS employee who helped them has been penalised, but the main beneficiary and owner of funds have gone scot-free.

    This is India’s state in a coalition government. And rest assured, the Customs department has not even confirmed from Yacht manufacturer about the real cost and how much was paid collectively for the yacht. If they do, u may find the value to be higher.

    But who listens to the few activists and the rest of bystanders like us.