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Thursday 17 May 2012

Modus Operandi: How Reliance ADAG Cos smuggled Tina Ambani’s Yacht to evade Customs

17 May 2012, Mumbai: 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:
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."
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:
Incidentally, Ms Kale was served a legal notice yesterday by Lt. Col. Gautam Datta to pull a blog with details of his continuing manipulations titled, Sailgate - The Party that Wasn't:
Ms Kale can be contacted at
Warm Regards,
Krishnaraj Rao

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