The controversial Zambian businessman Rajan Mahtani is facing a potential new criminal investigation related to alleged tax evasion activities revealed by the whistleblower leaks of the so-called “Panama Papers” of law firm Mossack Fonseca.
According to tipsters based in London, Mahtani was spotted on Thursday, 14 July in Victoria Station on his way back from meeting with his lawyer Ashok Kumar Sancheti at Morgan Walker Solicitors LLP on Chancery Lane in Central London. The source indicates that Mahtani is in a panic to prepare a legal defence strategy following his implication in the Panama Papers ahead of a potential inquiry by the Serious Fraud Office (SFO).
Mahtani’s wholly owned subsidiary company Finsbury Investments Ltd. is listed among those companies listed in the Offshore Leaks Database of the Panama Papers provided by the International Consortium of Investigative Journalists (ICIJ). The documents show that Finsbury was incorporated in Switzerland via an intermediary Semely Conseil & Gestion in 1996. This incorporation took place just a few years before he was tried and convicted on several counts of money laundering by the government of former President Frederick Chiluba.
Since the original release of the Panama Papers, prosecutors in a number of jurisdictions have indicated that they are preparing investigations into those parties known to be using shell corporations for unlawful activities of money laundering and tax evasion. Last April, U.S. Attorney in Manhattan, Preet Bharara, sent a letter to ICIJ announcing that his office has “opened a criminal investigation regarding matters to which the Panama Papers are relevant.” Similar intentions are underway at the UK’s SFO.
Over the past 40 years, Mahtani has been caught breaking the law numerous times and has served time in prison on two separate occasions. Among the early scandals he was implicated in the Carlington maize corruption scheme, which involved the defrauding of a Canadian company through the Food Reserve Agency (FRA). A few years later, Mahtani engaged in another scheme through his company Furncoz, which had been given lucrative government contracts to provide schools desks and other equipment to hundreds of Zambian schools – however Furncoz absorbed the funds and failed to deliver the promised goods, declaring bankruptcy.
Later in his career as managing director of Finance Bank (which he has been forced into selling to Atlas Mara at a steep discount), Mahtani was further implicated a series of money laundering charges, leading to the closure of his bank and suspension of shareholder interests in both Malawi and Zambia.
Some of this criminal activity is coming back to haunt him as he used allegedly illegally offshore shells to funnel these stolen funds from Zambia abroad while avoiding tax payments. Now, with the Panama Papers exposing his vehicle, he is assembling a legal defence strategy from his base in London.
Mahtani’s lawyer, Ashok Kumar Sancheti at Morgan Walker LLP, is not without his own controversy. He and his firm were sanctioned and shut down by the Solicitors Regulation Authority for “dishonestly using client money.”
In a prosecution brought by the Solicitors Regulation Authority (SRA), it was also alleged that Mr Sancheti had breached a professional undertaking, failed to account for funds involved in that undertaking and failed to pay £135,000 of stamp duty on behalf of a client. In all, the SDT found ten allegations against Mr Sancheti proven, with four of them involving dishonesty.