Pandora Papers: Harish Salve buys BVI company to acquire London apartment

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Supreme Court attorney Harish Salve, a former solicitor general of India, acquired The Marsul Company Limited in the British Virgin Islands in 2015 to own property in London, according to Pandora records, investigated by The Indian Express.

Salve was allocated 50,000 Marsul shares on September 15, 2015, according to the membership register prepared by the company’s agent, Aleman, Cordero, Galindo & Lee Trust (BVI) Ltd or Alcogal. A membership register is basically a list of the shareholders of a company.

Salve is named the beneficial owner of the company, which clearly indicates that the company is his own. He is the director as well as the secretary of Marsul. He has been reported as a high risk PEP (Politically Exposed Person) by the offshore intermediary while listing the risk profiles of all of his clients.

Responding to questions from The Indian Express, Salve said, “I acquired Marsul because it was the company that owned a London apartment in Park Tower. I was an NRI, so I didn’t need any permission.

When asked whether the income tax service had been made aware of this, he replied that it had been “fully disclosed”.

“To the best of my recollection, it was investigated by the tax department, and after which, to the best of my recollection, it shows up in my tax assessments – and in my tax returns,” he said.

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Salve said the property was acquired through a loan obtained from QIB (a bank headquartered in Qatar), which was refinanced from a loan from Coutts Bank where he holds bank accounts.

“I did not create Marsul, I bought the shares of Marsul. The ownership of real estate requires the payment of a tax called ATED. This tax was paid until the property was transferred out of the rent. Currently it is rented.

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ATED or the Annual Enveloped Dwellings Tax is an annual tax payable on UK dwellings by a Non-Natural Person, ie a business.

On whether the RBI has been notified, Salve said: “I did not need any clearance as I am an NRI and have acquired ownership of my funds in the UK.”

The Marsul Company’s register of members indicates that all of the issued share capital held by Salve has been guaranteed or allocated in favor of QIB (UK) plc in accordance with an “obligation” dated September 15, 2015. QIB (UK) plc is a bank. The charge was registered on October 28, 2015.

A debenture is essentially a security instrument that allows the bank to create a charge on the assets and property of the business.

Marsul gave the first legal mortgage on a leasehold property, an apartment on Brick Street, London, to QIB (UK) plc. The Indian Express accessed the UK land register and independently verified that this property is under lease, and Marsul was added on August 18, 2011.

The legal mortgage is considered the safest form of interest since it transfers ownership of the asset to the bank and prevents the borrower from undertaking any other transaction on the asset during the mortgage period.

In less than two and a half years, Marsul managed to obtain the release of the charge, that is, the bank agreed to absolutely, irrevocably and unconditionally release the guarantee created by the company on the property. This is clearly evident from a “load discharge certificate” issued by the BVI Corporate Affairs Registrar on February 20, 2018.

The Marsul Company Ltd is another BVI registered standard company. It was incorporated more than 15 years ago, on February 17, 2006, by Alcogal. A company limited by shares, the constituting act of Marsul was signed by Alcogal. The MoA and AoA were changed naturally after the shares were transferred to Harish Salve on September 15, 2015. The debenture or charge was also created on the same day.

Salve was also featured in the Panama Papers investigation conducted by The Indian Express in collaboration with the ICIJ in April 2016. The records of the founder of the Panama-based company, Mossack Fonseca, revealed that Salve and members of his family had registered three offshore companies in BVI – Crestbright Ltd, Pyebush Group Ltd and Edenval Ltd – via London based agent Rawi & Co with Vasant Vihar in New Delhi as address in India. He then declared that all companies had practically disappeared. “BVI companies have no value in any way – do not represent an asset or an investment abroad. In addition, all LRS remittances are disclosed by the remitting bank to the RBI, ”he said.


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