Thursday December 01, 2022

Tareen’s ‘Trust Deed’ signed, executed in Switzerland

November 17, 2017

ISLAMABAD/LONDON: The 38-page trust deed of Pakistan Tehreek-e-Insaaf (PTI) leader Jahangir Khan Tareen’s offshore trust was signed and formalised in Geneva, Switzerland, and facilitated by HSBC Guyerzeller Trust Company Geneva, raising questions about Swiss bank accounts.

During hearing in Pakistan’s Supreme Court, no questions were asked of Tareen about the Swiss connection of the ‘Trust Deed’ and no UK and foreign bank statements were presented before the court and the court didn’t go deep to ask for the full paper trail but just one ‘Trust Deed’ has raised several questions about Tareen’s various versions around his £7 million Hyde House on Newbury, UK.

Interestingly, HSBC Guzerzeller Trust Company of Switzerland finds extensive mention in Panama Papers report of International Consortium of Investigative Journalist {ICIJ}. The Financial Times (FT) reported that the banking group HSBC and its subsidiaries alone account for more than 2,300 of the 15,600 shell companies created by the Panama-based firm over nearly four decades.

The trust deed of Jahengir Tareen is witnessed by one Ian Iredale, officer of HSBC’s private Geneva bank, which specialises in dealing with high value clients. This vital fact recorded on the last page of the trust deed raises strong suspicion that Tareen holds or held Swiss Bank accounts. A chartered accountant, who advises on offshores shells and trust, said that someone who doesn’t have a Swiss account wouldn’t get services of Swiss bankers to get his offshore trust registered and that too in Geneva. He said Shiny View Limited of Tareen is registered in British Virgin Island (BVI) and Hdye House property, being debated and scrutinised in Supreme Court, is located in United Kingdom.

The HSBC Guyerzeller Trust Company SA operates as a subsidiary of HSBC Private Bank (Suisse) SA. This is located in Switzerland, in the heart of financial and private banking district of Geneva.

Jahangir Tareen’s ‘Trust Deed’ is witnessed by a person with address of 2, Quai du Général-Guisan, Geneva, and this is address of a luxury real estate company called “Société Immobilière Atlas”. This further strengthens the fact that sponsors of offshore trust, formed to park the £7 million Hyde House in Berkshire UK, have well entrenched Swiss business and banking connections.

The ‘Trust Deed’ is signed by one Valerie Michalowski who is a well-known offshore ‘Trust Administrator’ in Geneva. Valerie Michalowski is a Swiss national and resident in Geneva. She specialises in administration of a variety offshore trusts, offshore companies and foundation for high net worth clients. She is well known in Geneva’s financial circuit for carrying out special transactions (acquisition/sale of real estate, and registration of off shore companies for billionaires).

The offshore trust expert was then working for HSBC Guyerzeller Trust Company, Geneva, and is presently senior advisor at Summit Trust International Switzerland - another company that specializes in off shore wealth management. A fact worth mentioning is that the Summit Trust International also finds mention in Panama Papers as leading facilitator of offshore shell companies.

The fact that expert Valerie Michalowsk who got the offshore trust of Tareen registered is based in Switzerland and provides services to high value individuals associated with Swiss banks raises the key question that why was transaction of Tareen’s trust registered in Switzerland.

This also highlights the fact that Tareen did not present the detailed banking record of overseas bank in UK (or Switzerland) in the Supreme Court to avoid giving insight into how the funds reached in Shiny View Limited’s account, how these funds were used and whether funds from any country or source were also deposited in this account, including from Switzerland and Canada. Tareen’s lawyer has been repeatedly highlighting that funds went out of Pakistan through legal channels but never produced overseas bank details.

Another very interesting aspect of Jahengir Tareen’s offshore ‘Trust Deed’ is that it is registered in St Helier Jersey, The territory is often considered a major world offshore financial haven for super wealthy individuals. Imran Khan’s Niazi Services Limited was also registered in channel Island St Helier Jersey.

Five years ago, at its peak, the value of assets held through Jersey – its offshore banks, trusts and investment funds – was estimated at £700bn-£800bn, according to the island's former chief adviser Colin Powell. The figure is equivalent to about half of the UK's annual economic output.

Another key fact revealed by analysis of Jahengir Tareens trust deed is that the trust provisions clearly show that he practically controls the trust. Hence its non-declaration with Election Commission of Pakistan (ECP) and FBR is seen as indefensible for the PTI leader.

In section 6.2, the settlor of the trust (Jahangir Khan Tareen) has authority to direct the trustees to pay income of the trust fund to himself as lifetime discretionary beneficiary. Similarly section 6.3 and 6.4 empower the trustees to pay capital of the trust fund to discretionary lifetime beneficiaries (Tareen and his wife Amina Tareen). The trustees are also empowered by the trust deed to lend money from the trust fund to lifetime discretionary beneficiaries (Tareen & wife), interest free, and may even write it off.

Another key provision of the trust deed which gives absolute control of the trust to Jahengir Tareen in his role as settlor, in the constitution of the investment committee to manage investments and real estate portfolio of the trust. All key decisions pertaining to multi-million dollar investments will be made by investment committee. Whereas Jahangir Tareen is the first and controlling member of the investment committee, and even two other members of the investment committee are to be appointed by the settler, Tareen. Section 2 of the Schedule I of the trust deed stipulates all the details pertaining to Investment committee. All provisions are designed to give unfettered control to Jahengir Tareen regarding all matters pertaining to investment committee.

Section 5.2 and 5.7 further reveals that Jahangir Tareen in his capacity as settlor of the trust will call shots in all important financial matters. The Trust deed gives the settlor (Jahangir Khan Tareen) powers to give directions to trustees to make real estate owned by the trust available for use and enjoyment of himself and his family, or guests or any other person. The Trust provisions also empower Jahangir Tareen to direct that real estate owned by the trust to put it on sale in light of his directions, the settlor (Tareen).

Another intriguing feature of the Trust deed is that in a number of sections of the trust deed special provisions have been created vis a vis Canada and its tax law. These special provisions have been made part of the trust deed in order to cater for the legal compulsion created by famous Canadian tax and offshore trusts case called “Fundy Settlement”. Canadian Tax courts and Supreme Court have taken away the blanket protection enjoyed by offshore trusts. In Canada “offshore” and “illegality” are almost synonyms.

But this special provision for Candian Jurisdiction raises the question as to what’s the Canadian Connection? Does Tareen’s trust own properties or hold investments in Canada, if not why special provisions for Canada?

Jahangir Khan Tareen had told Shahzeb Khanzada on Geo News that he owned a property in Canada which he has sold. What happened to the income of that Canada property and whether it was owned through offshore or whether there are other properties owned by Tareen the trust is not know and neither the court asked Tareen’s lawyer about the Canadian property and its transactions nor his lawyer submitted anything.

In schedule IV of the trust deed, the beneficiaries are mentioned, other than the discretionary lifetime beneficiaries (Tareen & wife). This schedule in para one contains name of Jahengir Tareen’s wife. Tareen through out court proceedings has been arguing that he is not a beneficiary of the trust but his children are but in the trust deed his wife is also mentioned as a ‘Beneficiary’.

Even if Tareen’s contention is accepted, he becomes liable, since as per election law, declaration of assets of spouse is mandatory and hence Tareen gets trapped by his own argument that beneficiaries of trust are listed in the deed. However Tareen never mentioned in the election nomination papers that his wife is beneficiary of the trust owning a £7 million mansion in a London suberb.

It is worth noting that legal issue being debated in Supreme court were not about the sources of funds but whether assets were declared or concealed. Going by this yard stick, Tareen may find it difficult to justify non-declaration of wife’s off shore asset, his own control, his authority over the trust and the ‘Discretionary Lifetime Beneficiary’ status of himself and his wife.

A source close to Tareen, when approached for comment, said that he Tareen had told the court that the trust deed was signed in London and that the witnesses gave their Geneva addresses because they live in Geneca and that’s where the headquarter of the HSBC is located. “That’s how Geneva was mentioned.”

When told that the Trust deed indeed establishes that it was signed and executed in Geneva and not in London because if it was London then the witnesses were legally bound to declare their presence in London, the place where the trust would have been witnessed, the source said he can’t answer further questions.

Lawyers have confirmed that it would have been illegal for the witnesses to register their place as Geneva if they were in London. Three lawyers have confirmed that it would be “illegal” for Swiss witnesses to register their place of presence and witness status in Geneva if they signed these papers while in London.