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January 1, 2018

Tareen’s Hyde House exposed as asset hidden behind offshore sham trust

January 1, 2018

LONDON: The Supreme Court declared the PTI leader Jahangir Tareen’s arguments a “verbal jugglery”, “farcical” and “shocking” and did not accept a single contention or argument advanced by him in defence of his undeclared offshore asset, £7 million house, in Newbury, ironically called “Hyde House”.

As opposed to the contention of Imran Khan and Jehangir Tareen that he was disqualified on “technical interpretation” of the trust, the court disqualified Tareen for “blatant misstatement before the highest judicial forum of the country”, and conclusively declared that Tareen is actual, true, real and beneficial owner of the “Hyde House”, the luxury country house worth hundreds of millions of rupees in a London suburb, which he concealed and did not declare.

It’s at the same house that Jehangir Tareen and his son Ali Tareen stayed for half of the time during their visit to London after disqualification by the SC. Tareen met lawyers and Imran Khan’s aide Zulfi Bukhari during his stay in London but he has been advised by lawyers that the trust deed of the house make it abundantly clear that he’s the real beneficial owner of the house, not his children and that it was his “camouflaged” house, bought through Shiny View Limited offshore and then put in a trust to hide it from the Pakistani authorities.

Sources have confirmed that the UK lawyers told Tareen that the court may ask him questions about his trust’s links with the Swiss accounts and banks -- of which the evidence exists clearly -- as the trust deed was signed and executed in Geneva.

Tareen has been advised that if an inquiry is ordered, he will have to give full disclosure which will end up revealing more assets and accounts. When The News published reports for the first time establishing Tareen’s beneficial ownership of the Hyde House, he condemned these stories as “yellow journalism” but the SC confirmed the veracity of these stories.

A detailed analysis shows that the SC did not accept the money trail advanced by Jehengir Tareen for the 550 million rupees transferred abroad for purchase of offshore property. The court ruled that the amount of £2,295,000 was remitted by the respondent through 11 cheques from his foreign currency account No 1242-0000-1899-12 maintained with the HBL (Pakistan) to his own payee account (HBL) in the UK. This was done during the period from 15.12.2010 to 05.05.2011.

However, no corresponding credit entry for such amounts has been proved through the bank statement of Tareen’s bank accounts abroad. And its further utilisation and disbursement has not been established through any document. The Supreme Court further questioned the money trail while saying, “It is not clear as to who had opened or was operating the bank account of SVL abroad.”

The court further held that out of the entire amount which has been remitted by Jehengir Tareen from time to time to his own account abroad is £2,295,000; to SVL £750,000 and $1,100,000. As per the exchange rate prevalent at that time this was equivalent to a total of around Rs532,354,000.

However, no record of bank account of Tareen or SVL was presented before the court. In this regard, a self-prepared statement was placed on the record, which the court refused to accept. The SC conclusively ruled that financial aspect of the transaction remains absolutely unexplained and unclear. The court rejected the money trail by giving a finding that it was absolutely unclear that amounts which were sent by Jehengir Tareen through banking channels to his own account were ever transferred to the SVL or the trustees for the purchase of Hyde House. Nor was it clarified who opened and operated the account of SVL and how the amounts sent to the account of SVL were utilised.

Tareen had taken a plea that for reconstruction of Hyde House a loan was availed from a British bank but the SC did not accept this argument. It gave a finding that, “a loan was arranged from EFG Private Bank Limited by creating a charge dated 23.07.2015 over the property, but the amount of loan has not been disclosed. It is also not established when the loan was procured or granted”.

The fatal blow was given to Tareen’s argument by the three member bench when it held that in the light of the trust deed which was unwillingly presented before the court, Tareen has given “a blatant and shocking untrue statement that he has no beneficial interest in the trust or the property before highest judicial forum, which is not expected from an honest person.”

The Supreme Court held that unequivocal stance was maintained by Tareen that the offshore property Hyde House is not his property and it is property of an offshore company Sunny View Limited (SVL) which in turn was held by a trust. The SC unequivocally ruled that SVL or Hyde House was never transferred to any trust by Tareen and it is his asset. The court further ruled: “in the end Tareen was unable to avoid the truth”.

After analysing the trust document, judges held that “we are of the firm opinion that neither the SVL nor Hyde House were a trust property under “The Settlement”. The SC ruled that SVL was created as a repository to hide his tax paid money, sent through banking channels and shown to have been spent on the creation of SVL and the purchase/construction of the Hyde House but this was done in a clandestine and dubious manner.

The court unmasked the whole scheme by saying, “once the veil of incorporation of SVL is lifted”, Jehengir Tareen’s “face is clearly seen behind it as the true and actual owner of Hyde House. It was further held that Tareen thought he will get away with the camouflage and variety of covers, layers and veils of his off-shore company, and never expected such a deep probe”.

The court opined that the objective “behind this exercise was to hide and stash the said money, SVL and the property from the tax authorities and from the public eyes; by a person who has even in the past been a holder of a public office and presently occupies such an office”.

The SC conclusively thrashed the trust scheme and opined that “where a sham trust has been created, when it is regarded as a sham the trust must fail and the property should revert to the settlor. This might occur, for example, where an individual attempts to siphon off and hide his money in an offshore trust based in the Channel Islands while maintaining control and beneficial ownership of those funds”.

The court held that “where the settlor retained total control over the trust funds and, therefore, could never have genuinely intended to set up a trust, such circumstances, will look at the reality and substance of the purported transaction and a trust that at face value appears perfectly valid may be set aside if it is a sham trust or an illusory trust, i.e. if the settlor in essence retained the full beneficial interest and did not pass any interest in the property to the proclaimed trustee, the ‘trust’ is a mere fiction and a pretence”. It was finally ruled that Jehengir Tareen “was, has been and remains to be the true, real and beneficial owner of the property enjoying full control and discharging all the obligations of the owner”.

The court declared the defence of money gifted by Jehengir Tareen to his children was “farcical”. The court did not accept the defence of Tareen that he had sent all the money which was utilised for the purchase and construction of Hyde House. It held that “he never declared the said amounts in his own tax returns, rather he has shown these as gifts to his four children, without there being any gift actually made to them, because no cross-cheques of the gifted amounts were brought on the record envisaging the gift of the said amount in favour of the children”.

The three-member bench further charged Tareen of “withholding key information about his offshore company from the court. It declared that “certain information was withheld: the name of the company; how and when it was created, who established the same, where it was incorporated, who are the shareholders, what is the management setup thereof; what properties (assets) are owned by such company; and what is the nature of the trust arrangement. This vital information remained behind a fug of obscurity.”

The Supreme Court finally in the judgement authored by the chief justice himself sealed Tareen’s fate by concluding that “on account of what has been said above, we hold that the Jehengir Tareen for all intents and purposes was the actual, real, true and beneficial owner of Hyde House and he was required under the law to declare such property and the asset in his nomination papers filed on 09.09.2015 to contest the by-elections. And on account of this concealment that respondent is held not be an ‘honest’ person within the contemplation of Article 62(1)(f) of the Constitution and Section 99(1)(f) of ROPA, therefore’ he has incurred the disqualification to be the member of the Parliament and ceases to be the member thereof”.