The Reserve Bank of India (RBI) may closely examine the fit-and-proper criteria of Indiabulls Group founder and chairman, Sameer Gehlaut, whose name appeared in the Panama Papers, before approving the proposal to merge the group’s housing finance arm with Lakshmi Vilas Bank (LVB).
Indiabulls Housing Finance and LVB boards had proposed a merger, that would help the bank get capital and, Indiabulls make an entry into banking. Mr. Gehlaut is proposed to be vice-chairman of the merged entity.
In 2016, leaked documents from the Panama-based law firm Mossack Fonseca, showed a list of those who had allegedly opened shell firms in tax havens. That included the names of 500 Indians. The non-banking finance company had applied for a universal bank licence when the RBI invited applications in 2013 but failed to secure one. Central bank sources said since the ‘fit and proper’ criterion was a key parameter for RBI to grant banking licence, the Panama Papers incident would be examined by the regulator before taking a call on the proposed merger.
“Promoter/promoting entity/promoter group should have a past record of sound financials, credentials, integrity and have a minimum 10 years of successful track record,” one of the RBI’s norms had said for on-tap licensing of universal banks in 2016.
Compliant with law
Indiabulls, in response to a query from The Hindu , said Mr. Gehlaut’s investments abroad were in full compliance with all extant and current laws of the land, both from the ‘FEMA angle, and also from the Income Tax angle.’
‘Every single penny, which was invested offshore, has been under Overseas Direct Investment (ODI) regulations, and all funds remitted were out of Mr. Gehlaut’s tax-paid moneys, and were duly reported to the RBI in regulatory filings through the Authorised Dealer. The same were also reported in his income tax returns and balance sheets,” Indiabulls said. The company said subsequent to the Panama leaks, authorities concerned had examined ‘each and every remittance’ Mr. Gehlaut made and they were found to be in full compliance with relevant laws of the land.
“All records, including approvals and work status in respect of projects undertaken under the aegis of Mr. Gehlaut’s offshore proprietary arm, have been shared with the authorities, and there has been no violation or infringement whatsoever of any of the rules and regulations governing overseas investment,” it added.
