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Investment of Chaudhary Group family in tax haven Offshore country, one after another Scam over Binod

Kathmandu : The family of the only Nepali billionaire (in US dollars) Binod Chaudhary’s family has set up a company in a tax haven country by circumventing Nepal’s law, bringing in foreign investment to Nepal, taking dividends and setting up companies in different countries.

It has been found that five members of his family, including billionaire Binod Chaudhary, who claims to have legally invested abroad using a loophole in the law, have invested in a tax haven country.

According to a report provided by the International Consortium of Investigative Journalists (ICIJ) to the Center for Investigative Journalism (KHOPKE) Nepal, there are three companies registered in the British Virgin Islands, one in Singapore and one in Panama.

More than 600 journalists from 117 countries attended the event, according to the public Pandora Papers on Sunday night.According to Pandora Papers, Synovation Inc. in the British Virgin Islands, CG Hotels & Resorts Limited, Sensei Capital Partners Inc. and CG Hospitality Holdings Global PTE Ltd in Singapore are registered in the names of members of the Chaudhary family.

Although Chaudhary said in his book and various interviews that he had made legal investments abroad and that there was no room for questioning their legitimacy, the Pandora Papers leaks show that he had invested illegally in companies set up for tax evasion.

On the other hand, Abdul Awal Mintu, Chaudhary’s foreign partner and one of the foreign investors in Nepal, has been dragged into the investigation on the suspicion of money laundering in Bangladesh. According to Pandora Papers leaks, the information in Chaudhary’s autobiography needs to be examined to clarify the legal loopholes used by Nepal, the question of its legitimacy and the fears of money laundering against his partners.

“The biggest challenge for me was to fill in the gaps left by the law and move on. So that no one can raise legal questions about my foreign investment ‘, said Chaudhary in his book’ Binod Chaudhary: Autobiography ‘published in 2013. For that, he has described the provision of the Income Tax Act regarding ‘resident person’ as a ‘hole’.

‘Nepali citizens living abroad for more than 183 days of the year were treated as non-resident Nepalis. He was allowed to invest abroad, “Chaudhary said in his autobiography.” I took advantage of this and decided to stay abroad for more than 183 days a year and become a temporary citizen of my own country. Today, my two sons Rahul and Barun are doing business abroad as non-resident Nepalis. ‘

However, according to Pandora Leaks, investments have been made in the British Virgin Islands in the name of his wife Sarika Devi and eldest son Nirvana (both are Nepali citizens). That is, he and five members of his family have invested in Synovation Inc. of the British Virgin Islands. Singapore’s CG Hospitality Holdings Global PTE Ltd has invested in his three sons and wife. On the other hand, experts have commented that Chaudhary has invested abroad by misinterpreting the provisions of the Income Tax Act-2058 BS. The Income Tax Act stipulates that a person who has been in Nepal for 183 days or more in a period of 365 consecutive days should be considered a ‘resident’.

“He has misused the system,” said Rameshwar Khanal, a former finance secretary. If a Nepali citizen stays abroad for 183 days, then if he earns income, only he can invest abroad. ‘

But Khanal’s response is that his claim is not ‘rational’ as Chaudhary has invested money abroad from Nepal. “The dividend received by Nabil Bank’s foreign investors has been taken abroad,” Khanal said, “but he is the owner of the company.” He may have invested the same amount abroad. He is trying to confirm that the money taken from Nepal was earned by his sons living abroad. Which is wrong. ‘
On this basis too, the Chaudhary family has questioned the legitimacy of their investments abroad.

On the other hand, with the exception of two sons (who are non-residents), investment abroad in the name of Binod, his eldest son Nirvana and his wife is illegal. Because the ‘Prohibition of Investing Abroad Act-2021’ does not allow investment abroad without the permission of Nepal Rastra Bank.

According to a NRB source, Vinod, his eldest son Nirvana and Sarika have not sought permission from the National Bank to invest in some of the companies revealed by Pandora Papers.

“Binod has taken permission to have his name on it as a foreigner has gifted 50,000 units of shares to a Synovation Company in the British Virgin Islands,” said a Nation Bank source.

“Apart from this, we have not found any details of Vinod, Nirvana and Sarika seeking permission to invest in any other company.”

In our search, the fact that Binod had sought permission from the National Bank to invest in any foreign company other than permission for Synovation was not found in the public records.

The details of Pandora Papers show that Binod said that the gifted shares in Synovation were also invested by other members of the family and he has expanded his international business network by setting up various companies through the same company. Seeking proof of the last investor of this synovation, NRB has also stopped the dividend due to Nabil Bank of Nepal from 2076/77 BS.

“Even if it is called foreign investment, the distribution of dividends has been stopped by the decision of the Board of Directors of NRB about a year and a half ago on the suspicion that the Chaudhary family may be the last investor of Synovation,” said a NRB source. Dividend distribution will continue until it is brought. ‘

Over the past decade, tax haven investment has become a global issue. The details of Chaudhary’s global trade show that he started from similar countries. But Chaudhary has been taking the offshore business as a source of pride not only for himself but also for the country.

“If Kodak to Dabur can produce in Nepal, we should be able to produce it as well.” Nepal should also become a multinational company. It should be a symbol of Nepal and Nepali self-esteem. This is the birth of the mentality that there is no need to be petty, ”said Chaudhary in an interview with Nepali television channel AP1 on February 3, 2020.

According to the same interview, the Chaudhary family has invested in 122 companies in 50 countries by February 3, 2020. Established in Nepal under the name Chaudhary Group and CG Corp Global, they have 76 different brands around the world. Despite questions in the media and at the grassroots level about his mobilization of capital abroad, state bodies appear to be silent.

Chaudhary has been an MP from two influential parties during the republican period. In the Constituent Assembly election of 2064 BS, Chaudhary was made a Member of Parliament by the CPN (UML) from the proportional party.

Chaudhary, who later joined the Nepali Congress on the eve of the 2074 BS House of Representatives election, is now a member of the House of Representatives from the same party’s proportional quota. He is also the coordinator of the Congress’ Investment Infrastructure Employment Special Sub-Committee. The Congress has also launched a ‘Garikhane Abhiyan’ under the leadership of Chaudhary.

The CIJ informs the following 16 Nepali traders, including Nepali citizens and others conducting businesses in Nepal, were involved in offshore dealings as revealed by Pandora Papers:

  1. Binod Chaudhary, Chaudhary Group
  2. Sarika Devi Chaudhary, Binod Chaudhary’s wife, Chaudhary Group
  3. Nirvana Chaudhary, Binod Chaudhary’s son, Chaudhary Group
  4. Varun Chaudhary, Binod Chaudhary’s son, Chaudhary Group
  5. Rahul Chaudhary, Binod Chaudhary’s son, Chaudhary Group
  6. Lok Manya Golchha, Golchha Organisation
  7. Chandra Kumar Golchha, Golchha Organisation
  8. Hitesh Golchha, Golchha Organisation
  9. Ajeya Raj Sumargi
  10. Arjun Prasad Sharma, Sumargi’s relative
  11. Kishor Rana
  12. Rajendra Shakya, Guna Groups
  13. Suhrid Raj Ghimire, Kia dealer in Nepal,
  14. Purushottam Paudyal, Ghimire’s business partner
  15. Sudhir Mittal, Shree Airlines
  16. Radhe Shyam Saraf, Hotel Yak & Yeti
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