Never flouted rules in overseas activities: GMR

Hyderabad: GMR Infrastructure Limited said that it never flouted rules in its overseas activities and its overseas entities were always in conformity to well-established legal and business norms.

“GMR Group would like to emphasise that all overseas activities were conducted well within the parameters permitted by FEMA, Income Tax Act and Companies Act. Further, all its activities in overseas entities are in conformity to well-established normal business,” the infrastructure major said in a statement, responding the allegations levelled against it in ‘Paradise Papers’.

These papers include 13.4 million leaked financial documents from law firm Appleby on investments of major multinational corporations and that of well-known individuals in India and abroad in tax havens. GMR Infra further maintained that GMR Group had complied with all applicable tax laws in respective countries.

“All the transactions are well reflected in the books of accounts, annual reports and filed with all regulatory authorities like RBI, RoC and other concerned authorities in the respective countries,” it explained.

The statement further maintained that GMR Infra being an Indian listed entity followed the requisite governing practices and statutory/regulatory requirements in setting up overseas subsidiaries in various countries for running its business ventures.

“Overseas projects are to be necessary implemented through these local subsidiaries. Hence, separate companies had to be set up for running the overseas projects. Cross border transactions are done for either implementing such projects or for acquisition of assets by the group’s Indian businesses,” GMR explained.

It said the subsidiaries had to be set up in those countries, which had good trade and tax relations with the country where the projects were to be implemented. “In order to achieve this, formation of multiple companies in different jurisdictions have become a norm.

The overseas businesses and various transactions are always done in a transparent manner, which are in line with domestic laws and established practices”.

Pointing out that any business group would rationalize and re-arrange its shareholding structures and investment modes from time to time depending upon the business needs and returns on investments, the infra major said: “The group exited from Intergen NV and restructured its other overseas investments to optimise the cost of operations.

This reorganization was done under the purview of all local and international tax and corporate laws and with the necessary approvals of respective regulatory authorities”.