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Textile major Bhilwara Group has firm in BVI, says it is a lawful investment

According to the data from Panamanian law firm Mossack Fonseca, the Jhunjhunwala family who own the Bhilwara group, incorporated an offshore entity Cresthold Investments Limited in the British Virgin Islands (BVI) in 2004. It was the year the Reserve Bank of India (RBI) announced a new Liberalised Remittance Scheme (LRS), allowing a resident Indian to take $25,000 abroad every year.

An eight-month investigation by an Indian newspaper in collaboration with the International Consortium of Investigative Journalists (ICIJ) into the Mossack Fonseca files shows that Laxmi Niwas Jhunjhunwala (who founded the LNJ Bhilwara Group in 1961), son Ravi Jhunjhunwala and grandson Riju Jhunjhunwala, besides several other members of the family, have been/are shareholders of Cresthold Investments Limited.

The family’s Friends Colony residence in New Delhi is listed in all Mossack Fonseca records. For instance, records for 2008 show a list of seven members of the Jhunjhunwala family as shareholders of Cresthold Investments Limited, variously holding between 250 and 1,000 shares each.

Incidentally, email exchanges between company officials and Mossack Fonseca staff state that the objective of the offshore entity is ‘building wealth.’ According to a February 2013 email, the principal object of the company is to hold investments through its banking facility in Switzerland. The investments include participation in US-based funds for which formalities have been completed. The accounts and records of the offshore company have been kept with a ‘coordinator’ in the Isle of Man.