August 14, 2024
New Delhi, India
The Financial Services Commission (FSC) of Mauritius has firmly denied the allegations made by Hindenburg Research in its recent report, which labeled Mauritius as a “tax haven” and accused the nation of facilitating the creation of shell companies. The FSC clarified that the offshore funds mentioned in the report are not domiciled in Mauritius and that the country has stringent regulations prohibiting the creation of shell companies.
Mauritius’ Response:
- Denial of ‘Tax Haven’ Label: In a statement issued on August 13, the FSC, which acts as the integrated regulator for the non-bank financial services sector and global business in Mauritius, refuted the claims made by Hindenburg Research. The FSC emphasized, “Mauritius has a robust framework for global business companies. All global business companies licensed by the FSC have to meet substance requirements on an ongoing basis as per section 71 of the Financial Services Act, which is strictly monitored by the FSC.”
- Compliance with International Standards: The FSC underscored Mauritius’ adherence to international best practices, stating, “Mauritius strictly complies with international best practices and has been rated as compliant with the standards of the Organisation for Economic Co-operation and Development (OECD).” The regulator further highlighted that a peer review conducted by the OECD Forum on Harmful Tax Practices confirmed that “Mauritius does not have any harmful features in its tax regimes,” thus rejecting the label of a tax haven.
Clarification on Offshore Funds:
- Funds Not Domiciled in Mauritius: Addressing specific claims made in the Hindenburg report, the FSC clarified that the funds “IPE Plus Fund” and “IPE Plus Fund 1” are not licensed by the FSC and are not domiciled in Mauritius. “The funds mentioned in the Hindenburg report are not under the jurisdiction of the FSC,” the regulator stated.
Hindenburg’s Allegations Against SEBI Chairperson:
- Response to Allegations: On August 10, Hindenburg Research alleged that SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, had invested in an offshore entity linked to the Adani Group, which purportedly used shell companies in Mauritius to inflate stock prices. The Buchs issued a joint statement categorically denying these claims, calling them “baseless” and “devoid of any truth.” They added, “Our financial activities have been fully disclosed to SEBI over the years, and we are willing to cooperate with any relevant authorities.”
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The FSC of Mauritius has strongly defended the country’s regulatory framework against the allegations made by Hindenburg Research, reaffirming its compliance with international standards and denying the presence of shell companies within its jurisdiction. The FSC’s statement aims to clarify the inaccuracies in the Hindenburg report and uphold Mauritius’ reputation as a well-regulated financial hub.
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