US indictment links Seychelles offshore to Indian bribery scandal |22 April 2014

An investigation is being conducted into the alleged use of offshore companies registered in Seychelles as part of a broader criminal enterprise used to pay over US $18,000,000 in bribes to public officials in India.

The information was released through a communiqué by the Seychelles Financial Intelligence Unit (FIU) in which it added it is conducting the investigation.

A federal grand jury indictment in the United States, which has charged six defendants on five counts relating to the alleged bribery of state and central government officials in India to allow the mining of titanium minerals, alleges the use of companies and bank accounts in several jurisdictions, including Seychelles, to ease the transfer of funding in a manner designed to conceal its true nature.  

The investigation went highly public in the international media last month when the man at the centre of the case, a Ukrainian billionaire businessman, was arrested in Vienna. The subsequent FBI statement referred to him having engaged in the international transmission of millions of dollars for the purpose of bribing Indian public officials to obtain approval for the necessary licenses for the titanium mining project.

The FBI statement cited 57 transfers of funds between various entities and referred to a total of 159 companies registered in Austria, the British Virgin Islands, Cyprus, Germany, Hungary, the Netherlands, Seychelles, Switzerland and the United Kingdom. Most of the companies allegedly used are reported to be registered in Cyprus, Seychelles and the British Virgin Islands.

The FIU can confirm it has been cooperating with a number of other states investigating the matter under the provisions of the UN Convention Against Corruption (UNCAC) to which Seychelles is a signatory. A significant number of offshore companies registered in Seychelles have been linked to the investigation. The Seychelles offshore companies named in the indictment have various registered agents:  La Poudrière Law & Consultancy Chambers (Pty) Ltd, Apollo Business Solutions (Pty) Ltd, Abacus (Seychelles) Limited, and Intershore Consult (Proprietary) Limited.

The communiqué adds that the FIU has become increasingly concerned with the damage being done to the reputation of Seychelles by the abuse of our offshore sector in scandals such as this.

 While unreported to date in Seychelles, the matter has already received wide international coverage in the media. The links to Seychelles and other countries have been articulated by many reputable media outlets such as Bloomberg and the UK Independent. Events such as these are reinforcing perceptions overseas that the Seychelles offshore sector is a money laundering centre – a perception that is grossly unfair to the majority of people involved in the industry.

The FIU has said that government policymakers, law makers, state agencies and responsible industry stakeholders need to work together to mitigate the risk of legal offshore structures being used to ease corruption and profiteering from organised crime such as drug-trafficking, cybercrime, fraud, prostitution and the sexual exploitation of children.

“In international terms, our reputation is being placed at risk by existing practices and we need to adapt urgently if we are not to become permanently tainted as facilitators of crime and corruption. It is important that we now put in place an improved protective framework for our society and our standing in the international community,” adds the communiqué.