#RaGaSaga – Connecting the dots

On 18th November 2015

Reblogged from : https://performancegurus.net/ragasaga-connecting-the-dots/

Summary of how Rahul Gandhi may have created a web of deceit to bag one of India’s biggest Defence Contracts:

  1. Rahul Gandhi and Ulrik R McKnight were Directors of Backops, which they closed in 2009.
  2. DCNS of France, the manufacturer of Scorpene submarines, announces a deal with Flash Forge to supply critical parts as part of a Rs. 20,000 crore ($4.5 billion) deal to supply 6 submarines in India, some time in June 2011.
  3. Ulrik McKnight is appointed as a Director in Optimal Armour Limited (OAL) on June 6, 2012. He states in this form that his Nationality is United States of America and that he resides there.
  4. Ulrik McKnight becomes a Director in Composite Resin Developments (CRDL)Limited on Feb 19, 2013. He states that he usually resides in the US and enters his Nationality as Swedish.
  5. Two Indian nationals, Gautam Makker and Sunil Menon who are Directors in the Indian company Flash Forge Pvt. Limited are also appointed as Directors in Optimal Armour and Composite Resin Developments at about the same time as McKnight.
  6. Flash Forge acquires a majority stake in Composite Resin on December 20 2013 and in Optimal Armour on March 23, 2012.

The first question that springs up in one’s mind is how Flash Forge’s contract with DCNS is related to its majority stake in 2 British registered companies. A good question indeed – Usually one of the ways bribery happens (and we are not suggesting it did) is that you over-invoice your imports and under-invoice your exports and pocket the difference. In case of muli-national corporations, this difference has to be routed through a corporate entity, who then will use the company’s name to transfer it to tax havens. Is this what happened? That is for the Government of India to find out.

The next question that maybe asked is how Rahul Gandhi is involved in all of this. Before we try to explain this, below are the corporate filings for CRDL and OAL. Note that CRDL was originally incorporated as Millennium Valves Limited.

Composite Resin Corporate Filings

Optimal Armour Corporate Filings

hen there is much smoke, it is difficult to see the path ahead. Before proceeding further let us look at how Shell companies have been operated to avoid paying taxes, hide illegal wealth and launder money. According to Global Financial Integrity, a Non-Profit Reasearch and advisory Organization, An anonymous shell companyis a corporate entity that has disguised its ownership in order to operate without scrutiny from law enforcement or the public. These “phantom firms” can open bank accounts and wire money like any other company, making them a favorite tool for money launderers to hide their business and assets from authorities.

“Shells are the No. 1 vehicle for laundering illicit money and criminal proceeds.”-Lanny A. Breuer, Asst. U.S. Attorney General, 2012

“Shells are the No. 1 vehicle for laundering illicit money and criminal proceeds.”-Lanny A. Breuer, 
Asst. U.S. Attorney General, 2012

How Do Shell Companies Work?

At first glance, it might seem pretty easy to find information about the individuals in control of a company. Many companies list names and phone numbers for its executives, staff, or board of directors on their website or in official documents, because they want customers to see the company as open and accountable. But the people running a phantom firm don’t want to be found and instead operate in the shadows—they don’t have websites and create as short of a paper trail as possible.

The forms filled out when a company is created are often the only public proof of a phantom firm’s existence, and they rarely ask for enough information to track down the individuals controlling it. Even where they do, this information can be misleading. Companies can list “nominee” shareholders or board members with no visible relation to the actual owner—for instance, a lawyer or a distant relative, or people that can be hired specifically to allow their names to fill in the blanks on these forms. They can also list other anonymous companies or trusts in order to make it more difficult to track down the actual owner. The true owners or people in control of the company are often known to no one in the outside world other than—possibly—a law firm or an incorporation agent.

Once created, anonymous shell companies do little or no actual business. Instead, they often exist and function entirely on paper, opening bank accounts and owning assets without ever revealing the name of the true person benefiting from its conduct, whether licit or illicit.

Unanswered Questions

  1. Why was Ulrik R McKnight appointed as a Director in CRDL and OAL, that too after the deal was signed?
  2. OAL has been in business for 30 years and its growth, given its high sounding name can only be termed as extremely modest.CRDL was incorporated in 2007 with a share capital of £1000 and its annual returns are also very small. What was the reason for Flash Forge Private Limited to acquire CRDL and OAL, when there appear to be no assets of value?
  3. What is the reason for Ulrik R McKnight to claim Swedish nationality in one filing and U S in the other?

Will the Government of India, move quickly to get to the bottom of this saga? This is just the beginning. Stay on, this ride is going to be exciting!

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