Sunday, 11 October 2015

A Billion-Dollar Shell Game in Seychelles

An Indian-born oligarch who purchased M.C. Hammer’s former mansion in California may have followed the previous owner into decadence and bankruptcy, but, unlike the bejeweled and balloon-panted rapper, this flamboyant figure appears to have benefited from the relaxed laws of an island nation to keep his assets out of the hands of his creditors.
 Once the owner of an estimated $3 billion business empire, largely founded on India’s telecom industry, Chinnakannan Sivasankaran, or Siva as his friends call him, filed for bankruptcy in August 2014 in Seychelles, following his loss, in British High Court, of a civil case brought against him by an erstwhile partner, a subsidiary of the Bahrain Telecommunications Company, or Batelco.
It was decided that Siva and his Bermuda-registered company Siva Limited should pay the Gulf-based company $212 million by June 26, 2014. 

However, even before the trial began, the oligarch used his Seychellois citizenship, to arrange a swift legal split from his wife, to whom he then transferred at least $95 million in assets—39 plots of land, one island and numerous corporate holdings registered in Seychelles and the British Virgin Islands, including those that owned even more real estate—as part of the divorce settlement. (That transfer, in fact, took place on May 14, 2014, a day before Siva testified in court on the Batelco case.)
Not that bankruptcy would have necessarily hurt Batelco’s chances of recovering their money under Seychelles’ prior law on insolvency. But about a year after Siva lost his case in Britain, the island nation “reformed” its bankruptcy statute, first introduced by Seychelles Finance Minister Jean Paul Adam, thereby shortening the timespan of official bankruptcy from three years to one and also making it more difficult for creditors to collect from the new owners of transferred assets.
That change occurred mere weeks before Siva became the first person in the history of Seychelles to file for bankruptcy. To date, he is also the only person to have done so, before or after the law changed. He hasn’t paid Batelco a cent and his actual financial relationship with his former wife remains a mystery. 

The whole story, uncovered by The Daily Beast, highlights the role of questionable offshore tax shelters, of which Seychelles is a small but hyper-caffeinated example, in allowing an international elite to transcend borders and sovereign jurisdictions in order to safeguard their assets.
The 59-year-old Siva first rose to prominence in India’s southern state of Tamil Nadu in the mid-1980s after he acquired Sterling Computers and sold cut-rate PCs in a burgeoning subcontinental tech industry, transforming the company into one of India’s top three in its field.  Frequently adorned with gold Rolexes and known for his obsession with health food and personal fitness, Siva formerly lived and worked out of presidential suites at the Ritz Carlton and Pan Pacific hotels in Singapore. He spent in excess of $80 million to buy himself three personal jets because, as he put it, “Every week, I have at least three flights to catch.”
 As a “back-up plan,” in 2008 Siva also became the first member of Dragon Blaze, a “luxury lifestyle” concern run out of Malaysia, which grants its members access to fleet of even more comfortable aerial and aquatic conveyances. (The annual membership is $1 million.)

Over the past four decades, he's had a hand in all sorts of things: engineering, shipping, commodities trading and alternative energy. According to NGO Grain, an international non-profit that supports small farmers, his Siva Group gobbled up about “a million hectares of land in the Americas, Africa and Asia, primarily for oil palm plantations,” making him “one of the world’s largest farmland holders.” 
Siva aimed to set up a new U.S. operation by relocating to Fremont, California, in 1996, buying M.C. Hammer’s mansion following the latter’s own loss of fortune, but by the mid-2000s, he opted to move to Seychelles and became a full citizen. This decision was followed almost immediately by his nomination as ambassador-at-large. 
In a 2008 U.S. State Department cable published by WikiLeaks, U.S. diplomats relayed statements by Ralph Vocere, “editor of a local paper and member of an opposition party,” alleging that Siva was part of a Seychellois “business mafia” that was buying land from the Seychelles government at the expense of a battered and hopelessly corrupt national economy — this, as the nation was seeking bailouts from the International Monetary Fund and World Bank.

 “[N]o one can deny that Siva has profited from his time in Seychelles,” the cable states.  “He now owns many business [sic], three islands in the Seychelles archipelago, and was nominated Ambassador-at-Large by President Michel after only being in Seychelles for about a year. Soon after awarding him the position, the Government of Seychelles [GOS] requested a U.S. diplomatic visa for Ambassador-at-Large Siva.  When Post requested information as to the plans and nature of the diplomatic trips planned by Siva, the GOS withdrew the application.”  
By 2008, Siva was one of Seychelles’ largest landowners.  He also donated an unspecified sum to the creation of Espace, a 6,500-square meter, $12 million performance-and-shopping centre in Victoria, Seychelles’ capital. It was the project of a youth organization called JJ Spirit Foundation, the patron of which is none other than Seychelles President James Michel. The opening ceremony for Espace occurred just days after the British High Court judgment against Siva.
Seychelles has been called the “world’s first socialist tax haven,” with a post-colonial history tethered closely to Italian mafia and South African apartheid, according to reports.  With a population of a mere 89,000 — smaller than that of Flint, Michigan — Seychelles has adopted an ask-no-questions economic policy catering to a jet-set, billionaire class of foreigner who travels there not to luxuriate in the tropical paradise where Kate and Wills honeymooned, but to set up companies for the purposes of moving GDP-sized amounts of money around the world.  
Much of Seychelles’ economy functions as a service industry for nominee directorships and hassle-free corporate filings. As such, according to the Independent Consortium of Investigative Journalists (ICIJ), Seychelles is “an offshore magnet for money launderers and tax dodgers,” a reputation owing, ICIJ finds, a great deal to the dubious company kept by its president and his coterie of advisors.
In the past two years alone, all sorts have passed through Seychelles including a mobbed-up Slovakian businessman accused of murder and the son-in-law of former Tunisian dictator Zine El Abidine Ben Ali, who lives there still, free from the threat of extradition on the pretext that he’d not receive a “free and fair” trial in post-revolutionary Tunis, where he has been sentenced to 16 years in jail on corruption chargesAt least four shell companies that launder stolen Russian taxpayer money, connected to the notorious Magnitsky affair, were established in the Seychelles. And the unscrupulousness is by no means confined to authoritarian regimes. In 2011, it was discovered that a subsidiary of the Reserve Bank of Australia moved millions in bribes through Seychellois companies. A year later, two Israelis pleaded guilty in the U.S. for running an unlawful online pharmacy through similar legal structures.
“We're seeing the abuse of companies that are either registered in Seychelles, or use nominee directors from there, to hide assets or conduct dubious activity,” says Tom Mayne, a specialist in offshore jurisdictions formerly affiliated with the transparency watchdog Global Witness.
With such precedents, then, fast-tracking a divorce seems a modest request. Documents obtained by The Daily Beast indicate that Siva filed a motion for his petition to divorce Jayalakshmi Sivasankaran to be processed as a matter of urgency, citing the former’s need to travel, and in camera, so as to not to interfere with Siva’s role as diplomat.  
The divorce was filed and temporarily granted within three days. A second petition was then filed to speed up the time for which it takes a Seychellois divorce to become absolute from six weeks to four.  The entire dissolution of marriage and transfer of close to $100 million in assets took about a month and concluded at the end of April, 2014.  Other documents obtained by The Daily Beast indicate, however,  that Jayalakshmi and Siva’s father both resided at the same address in India as of late August, 2014 — four months after she became the former Mrs. Siva. 
On June 12, 2014, the British High Court ordered Siva to pay $212 million to Batelco. Had he not got the time for the finalization of his divorce reduced to a month, there’s every chance that he’d have still been legally married to Jayalakshmi when the decision came down and that the $100 million in assets he granted her in the quicky settlement would therefore be susceptible to seizure to satisfy the judgment.
June was also the month that Seychelles’ National Assembly, where President Michel’s ruling party controls 31 of the 32 seats, discussed an insolvency amendment shrinking the time for an individual’s state of bankruptcy from three years to one and making it more difficult for receivers to try and recoup reassigned assets from the legally broke. The amendment passed soon thereafter.
And the timing was just right for Siva. On July 16, Britain’s High Court issued a Worldwide Freezing Injunction on all of Siva’s assets. It was a month later that he became the first Seychellois citizen to ever file for bankruptcy under the country’s newer, more favorable conditions for doing so.
Also interesting are the other assets he transferred that summer. One was a large Canadian property located in British Columbia —279 Anna's Drive, Salt Spring Island— which Siva Limited gave to Axcel Sunshine, British Virgin Island-registered company. According to Companies House, Britain’s corporate registry, the director and 25 percent-owner of Axcel Sunshine is a woman named Nithyavathi Venkatesan. As of 2004, her listed address was 44896 Vista Del Sol, Fremont, California — the M.C. Hammer mansion owned at that time by Siva. The sale documents were allegedly signed on July 11, 2014, five days before the High Court freezing order, but the transfer was not actually filed until July 22. 
“Notice how it works," said Ben Judah, author of a forthcoming book on London and an anti-corruption campaigner. “It shows that nation-states have become obsolete in the policing of the mega-rich.”
Siva did not respond to The Daily Beast’s request for comment on this story.

Tuesday, 29 September 2015

Today in Seychelles Gagged

Today in Seychelles can no longer write about the Damienne Morel murder. Chief Justice Mathilda Twomey who will hear the murder case, issued an order that was served on the editor of the newspaper a few hours ago, prohibiting the newspaper from writing about the court proceedings without the court's order. 

The request for a gagging order was made by defence attorney Anthony Juliette. Juliette later tried to intimidate the daughters of late Damienne Morel outside the courtroom. He was talking to his client - Damienne's former husband and father of her two daughters - together with his family members when one of them asked the lawyer not to be too loud for fear the daughters would hear. Juliette then started swearing at them. Among them were four witnesses to the case. 

 The case was supposed to be heard by judge Burhan and no explanations were given to explain why the case would no longer be heard by the head of criminal division but instead by justice Twomey. In the first case she is presiding since her appointment, Matilda Twomey gags the free press. A dangerous precedent indeed.

Wednesday, 26 August 2015

Rajapakses used Bank Of Ceylon Seychelles branch for money laundering

(Lanka-e-News -24.Aug.2015, 11.30) The Financial crimes investigation department (FCID) that is conducting investigations based on a complaint had unearthed a wealth of information regarding the colossal sums of money earned fraudulently via robbery of public funds by the Rajapakse family which have been remitted to Seychelles Island and are with the Seychelles State . It is also revealed that the Bank of Ceylon branch which  was opened in Seychelles some time ago has been used as a center for their money laundering activities.

With a view to obtain the relevant files and the details of the account holders  in connection with the complaint , the FCID had submitted a B report  B-663/15 to the Fort magistrate.
Investigations had disclosed that there is no valid reasonable ground to open a Bank of Ceylon branch in Seychelles. Yet , from the beginning , when considering the money exchange that took place, a massive  sum in excess had been exchanged.
In the circumstances , it has come to light that the Rajapakse family had used the bank branch for its money laundering activities, and such monies have been used by  the Rajapakse family.The FCID is also probing into the passengers who travelled to Seychelles via Mihin Lanka airlines , and the officers of the Seychelles bank branch are also being questioned.

Meanwhile Gotabaya Rajapakse is scheduled to appear this morning  before the presidential commission which he was dodging  for a while. A statement is to be recorded of his pertaining to his involvements with Rakna Lanka establishment.

Tuesday, 18 August 2015

Who Are The Pirates Somalis Or Seychellois?

Robbers target at least three yachts in the Seychelles

On 11 August, the counter-piracy Combined Task Force (CTF) 151 conducted a joint operation in the Somali Basin aimed at strengthening international cooperation in preventing piracy and illegal trade in the region. The exercise involved both military and non-military authorities from Pakistan, South Korea, Spain, USA and Japan, who took part in the operation that also extended to the Gulf of Aden and the Gulf of Oman. The operations indicate that, although levels of piracy have reduced in the region since the peak of activity in 2012, the threat remains of real concern on an international level.

Two late reports were received this week regarding robberies in the Seychelles. On 21 July at 0300 hrs local time, an unknown number of robbers boarded an anchored sailing yacht, Ceilydh, in Victoria Harbour, Seychelles. The robbers swam to the yacht, boarded and stole personal electronic items, a small amount of cash and the yacht’s dinghy, which was tied alongside. The robbers used the stolen dinghy to board another yacht which was anchored nearby and stole additional personal electronic items and jewellery. The dinghy was later found abandoned on a nearby beach. On 24 July, a sailing yacht, SY Imagine, was boarded by two robbers while anchored off Eden Island, Victoria, Seychelles. The yacht owner fired a flare to try and discourage the robbers. However, one robber took a second flare and fired it into the yacht cabin, starting a small fire. The yacht owner threatened the robbers with a machete and the robbers attacked the owner’s wife with a broom handle. The robbers escaped with a few personal items.
These are the first reported cases of robberies against maritime targets in the Seychelles. Since the beginning of the piracy crisis in the High Risk Area, the Seychelles has gone to considerable lengths to protect its tourism and fishing industries, and it is possible these incidents will prove to be isolated incidents of localised criminality aimed only at wealthy pleasure boat owners. Nonetheless, vessels should ensure crew are alert to these break-ins while the criminals remain at large.



Saturday, 8 August 2015

Drink and heroin killed sailor in Seychelles - but was alcohol spiked?

ROYAL Navy engineer Charlie Warrender, who was found dead while on active service in the Seychelles islands, had traces of heroin in his system, it has been confirmed.
But it is understood investigators are looking into the possibility that his drink may have been spiked as he and fellow crew members of HMS Richmond visited the island from their ship in May.
An inquest opening has heard the 22-year-old former Grimsby student from North Thoresby died from the combined effects of alcohol and heroin intoxication with positional asphyxia.
He was found dead at 6.30am near the docks in the main port of Victoria.
Seychelles Police said the death was suspicious because the serviceman had a head injury.
Toxicology tests later confirmed traces of heroin in his system.
Several crew members were out with the engineer technician on the evening before his body was found.
The coroner for Grimsby and North Lincolnshire, Paul Kelly, is awaiting a reports from the island police and the Royal Navy who have interviewed crew members.
A Royal Navy spokeswoman said Seychelles Police have primacy in the investigation.
She said: "The Royal Navy undertook an Immediate Ship's Investigation (ISI) into the circumstances surrounding this incident.
"The purpose of the ISI was to review the ship's leave and security policy at the time of the incident.
"This was not an investigation into ET Warrender's death, for which the Seychelles Police have primacy. Therefore, the ISI did not inquire into, assess or analyse any matters or material which may prejudice the findings of the Seychelles Police investigation.
"A review of the ISI is now being carried out to determine if there are any immediate lessons that should be identified."
The former Louth King Edward VI Grammar School pupil was serving on Portsmouth-based ship HMS Richmond, which was part of Operation Kipion in the Indian Ocean at the time.
At the time of the tragedy his family issued a statement describing Charlie as "a charismatic and loving young man, who made everyone who met him smile."
The family statement said: "He was extremely proud to serve in the Royal Navy and was thoroughly enjoying travelling the world, progressing his career as a Marine Engineer."

While on board HMS Richmond he played an active part in operations supporting UK Sovereign Territories in the South Atlantic, Defence Engagement with Chilean forces, counter narcotics duties in the North Atlantic and service in the Indian ocean.
Charlie was a former Franklin College student, who spent time with Humberside Engineering Training Association (HETA) in Stallingborough.
A guard of honour was held by The Royal Navy at his funeral in June at Grimsby crematorium.

Tuesday, 28 July 2015

Human Trafficking Report 2015 - Seychelles Tier 2

James Michel
Seychelles is a source country for children subjected to sex
trafficking and a destination country for foreign men and women
subjected to labor and sex trafficking, respectively. Seychellois
girls and, according to some sources, boys are induced into
prostitution—particularly on the main island of Mahe—by peers,
family members, and pimps for exploitation in nightclubs, bars, guest
houses, hotels, brothels, private homes, and on the street. Young
drug addicts are also vulnerable to being forced into prostitution.
Foreign tourists, sailors, and migrant workers contribute to the
demand for commercial sex in Seychelles. Eastern European
women have been subjected to forced prostitution in private
homes. Migrant workers—including those from China, Kenya,
Madagascar, and various countries in South Asia—make up
20 percent of the working population in Seychelles and are
primarily employed in the fishing and construction sectors. Migrant
workers are subjected to forced labor in the construction sector.
NGOs report migrant workers face exploitative conditions in fish
processing plants, and fishermen aboard foreign-flagged fishing
vessels in Seychelles’ territorial waters and ports are subjected to
abuses indicative of forced labor, including nonpayment of wages
and physical abuse.
The Government of Seychelles does not fully comply with the
minimum standards for the elimination of trafficking; however,
it is making significant efforts to do so. During the reporting
period, the government adopted anti-trafficking legislation and
began implementation of the 2014-2015 national action plan.
The national anti-trafficking committee, in collaboration with
international donors, began the development of a victim assistance
tool and conducted an extensive national awareness campaign
on trafficking. However, the government did not report any
prosecutions or convictions of trafficking offenders and did not
identify any trafficking victims. The government deports migrant
workers working for state-owned or private companies for
participating in strikes to protest poor employment conditions
without conducting comprehensive investigations and screenings
to identify if the individuals were victims of forced labor.
Use the newly adopted anti-trafficking legislation to investigate and
prosecute trafficking offenses and convict and punish trafficking
offenders; amend the penal code to harmonize the duplicative and
contradictory sections addressing sexual offenses—particularly
those related to the exploitation of children in prostitution—to
ensure the prohibition of and sufficiently stringent punishment for
the prostitution of all persons under 18 years of age and the forced
prostitution of adults; provide specialized training to government
officials—including members of the national committee on human
trafficking, law enforcement officials, social workers, and labor
inspectors—on how to identify victims of trafficking and refer
them to appropriate services; implement the national action plan
to combat human trafficking and dedicate appropriate resources
towards its implementation; provide adequate resources to labor
inspectors to conduct regular and comprehensive inspections of
migrant workers’ work sites and inform the migrant workers of
their employment rights; institute a standardized contract governing
the employment of domestic workers within private homes;
and continue awareness campaigns on trafficking to increase the
understanding of the crime among the local population and the
large number of foreign tourists and migrant workers entering
the country.
The government demonstrated minimal efforts to identify and
protect victims. It did not identify or provide protective services to
any trafficking victims. There are no shelters or protective services
specifically for trafficking victims in the country. The Department
of Social Affairs provided counseling to women in prostitution,
some of whom may have been victims of forced prostitution.
The national anti-trafficking committee began the development
of a victim assistance tool, which will include standard operating
procedures and victim identification and referral mechanisms; the
tool was not finalized at the end of the reporting period. There
were no reports of victims being penalized for unlawful acts
committed as a result of being subjected to trafficking; however,
the lack of formal identification procedures likely resulted in some
victims remaining unidentified in the law enforcement system.
Additionally, migrant workers who strike are considered to be in
breach of their work contracts and can be deported at the will of
their employers. Several migrant workers who gathered to protest
a variety of abuses relating to their employment were deported
during the reporting period; these deportations took place without
conducting comprehensive investigations or screenings to identify
if the individuals were victims of forced labor.
The government increased prevention efforts. The national
anti-trafficking committee served as a coordinating body for
collaboration and communication on trafficking matters; the
committee met regularly during the reporting period, but did not
receive a dedicated budget and relied on ad hoc funding from
various government agencies. As a result, the implementation of
the 2014-2015 national action plan was slow and many activities
remained in early planning stages. The government conducted
a two-month nationwide media campaign to raise awareness
on trafficking; the campaign was funded by an international
organization. As part of this campaign, the Ministry of Home
Affairs and Transport developed a website to educate the general
public on how to identify and report trafficking offenses. The
Ministry of Labor and Human Resource Development employed
11 labor inspectors responsible for conducting inspections of
all workplaces in the country and one labor officer assigned to
inform all migrant workers of their employment rights; government
officials acknowledged this number was inadequate and inspectors
lacked basic resources to perform their duties adequately. Despite
several complaints by migrant workers, primarily in the construction
sector, about poor working conditions, nonpayment of salaries,
and retention of passports, the government has never identified
a case of forced labor in the country. The government made no
discernible efforts to decrease the demand for commercial sex acts
or forced labor during the reporting period. The government did
not provide anti-trafficking training or guidance for its diplomatic