UK Tribunal ruling on UBS brings rich Indians under lens

May 31, 2012

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Mumbai, May 31: Sachin Karpe would have never imagined that an innocuous $5,000 transfer from a friend's UBS offshore bank account to his personal bank account in Mumbai would come back to haunt him and the wealth advisory business his wife, along with three others, runs in the city.

The unidentified NRI friend, who was travelling to India, had moved the money from his UBS account to Karpe's account in a European bank's Mumbai branch. This single transaction triggered investigations that backfired on UBS and pointed out how Karpe and his colleagues helped ADAG entities violate Indian securities regulations.

Also, for the first time, the role that Swiss banks play in irregular transactions in Indian stock markets came to the fore.

"The use of FII structures for Indian resident investors was commonplace within UBS and that was well known to senior management," said the UK Upper Tribunal verdict in the case Karpe vs FSA, the British regulator.

The FII structure, set up by UBS, used funds from the Swiss bank's accounts to invest in offshore derivatives issued against stocks of ADAG group companies. The tribunal ruling has deepened suspicions of sharp practices that wealthy Indians and local business houses often indulge in.

"The FII structures were in relatively widespread use within UBS; for example, there had been 14 "cells" of the fund and only one had been the subject of the present allegation of misconduct," said the tribunal.

UBS Distances Itself

Multi-cell FIIs - through which select investors could route money separately without revealing their identities - were banned a few years ago when the Indian capital market regulator had a whiff of such transactions.

But, when ET contacted UBS, the bank preferred to distance itself from these transactions. Mark Panday, a Hong Kong-based spokesman for UBS said, "The fund structures used by the former employees in London during the relevant period were not approved or permitted by UBS."

"The conduct of Ms (Laila) Karan (who worked at the Asia-II desk) and Mr Karpe was in clear breach of UBS policies and procedures. Both Ms Karan and Mr Karpe were dismissed by UBS for gross misconduct. UBS has fully co-operated with the regulatory action taken by the FSA against them and notes the decisions of the Upper Tribunal to uphold that action. We are satisfied with the outcome and this matter is now closed," he said.

Like UBS, Altamount Capital, the wealth management and family office shop that Sachin Karpe's wife Richa runs would like to distance itself from the former Swiss Bank official. "Sachin has no direct connection with Altamount Capital in any manner barring that he is a consultant with Altamount," she told ET some time back.

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News Network
October 21,2024

khalistan.jpg

Khalistani terrorist Gurpatwant Singh Pannun on Monday warned passengers not to fly on Air India flights from November 1 to 19. He asserted that an attack could take place on an Air India flight during the specified dates, which coincide with the "40th anniversary of the Sikh genocide".

The founder of Sikhs for Justice (SFJ), who holds dual citizenship in Canada and the US, had issued a similar threat around the same time last year.

Pannun's fresh threat comes amid several airlines in India receiving multiple threat calls about potential bombings, all of which turned out to be hoaxes. It also occurred at a time when India and Canada are engaged in a murky diplomatic row following Canada's allegations of India targeting Khalistani elements in the country, including the murder of another terrorist, Hardeep Singh Nijjar.

In November 2023, Pannun released a video claiming that Delhi's Indira Gandhi International Airport would be renamed and would remain closed on November 19, warning people against flying on Air India that day. The National Investigation Agency charged him with criminal conspiracy, promoting enmity between different groups on the grounds of religion, and various offences under the Unlawful Activities (Prevention) Act (UAPA).

In December last year, Pannun threatened to attack the Parliament on or before December 13, following reports of an alleged foiled plot to kill him. December 13 marks the anniversary of the terrorist attack on the Parliament in 2001.

He also threatened to kill Punjab Chief Minister Bhagwant Mann and Director General of State Police Gaurav Yadav on Republic Day this year. He also urged gangsters to unite and launch an attack on Mann on January 26.

Pannun has been designated a terrorist by the Ministry of Home Affairs since July 2020 on charges of sedition and secessionism, as he leads SFJ, a group advocating for a separate sovereign Sikh state. A year prior to this, India banned SFJ as an "unlawful association" for engaging in "anti-national and subversive" activities.

In another development, on October 17, the United States charged a former officer of India's spy agency Research and Analysis Wing (RAW) for allegedly directing a foiled plot to murder Pannun, a charge New Delhi has rejected as baseless allegations.

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