Mauritius FSC Denies Offshore Fund Allegations Against Sebi Chief

The Financial Services Commission (FSC) of Mauritius clarified on Tuesday that the offshore fund involved in the conflict of interest allegations against the Sebi chief is not based in Mauritius. The FSC emphasised that it does not allow the creation of shell companies.

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In a statement, the FSC acknowledged the Hindenburg Research report dated August 10, 2024, which mentioned Mauritius-based shell entities and referred to Mauritius as a tax haven. The report also cited IPE Plus Fund and IPE Plus Fund 1 as being registered in Mauritius.

Denial of Allegations

The FSC clarified that neither IPE Plus Fund nor IPE Plus Fund 1 are licensed by the FSC or domiciled in Mauritius. "We wish to clarify that IPE Plus Fund and IPE Plus Fund 1 are not licensees of the FSC and are not domiciled in Mauritius," it stated.

Hindenburg Research had alleged on Saturday that Sebi chairperson Madhabi Puri Buch and her husband opened an account in 2015 with a wealth management firm in Singapore. This account was used to invest an undisclosed sum in a Mauritius-registered offshoot of a Bermuda-based fund.

Regulatory Framework

The FSC, which regulates the non-bank financial services sector and global business, denied that the fund was registered in Mauritius. It highlighted that Mauritius has a robust framework for global business companies. "All global business companies licensed by the FSC have to meet substance requirements on an ongoing basis as per section 71 of the Financial Services Act, which is strictly monitored by the FSC," it said.

The Mauritian fund was reportedly managed by an Adani director, and its ultimate parent company was allegedly used by two Adani associates to round-trip funds and inflate stock prices. However, the FSC reiterated that its legislative framework does not permit shell companies.

International Compliance

Mauritius adheres to international best practices and has been rated compliant with Organisation for Economic Co-operation and Development (OECD) standards. According to a peer review by the OECD Forum on Harmful Tax Practices, Mauritius does not have harmful features in its tax regimes. "Thus recognising Mauritius as a well-regulated, transparent and compliant jurisdiction," added the FSC.

Therefore, the FSC asserted that Mauritius cannot be termed as a tax haven. The commission's statement aims to dispel any misconceptions about Mauritius' regulatory environment and its compliance with international standards.