Jahangir Tareen Exposed by BBC – ‘Trust Deed’ signed and executed in Switzerland

Jahangir Tareen Exposed by BBC – ‘Trust Deed’ signed and executed in Switzerland

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ISLAMABAD/LONDON: The thirty-eight-page trust deed of Pakistan Tehreek-e-Insaaf (PTI) leader Jahangir Khan Tareen’s offshore trust was signed and formalised in Geneva, Switzerland, and facilitated by HSBC Guyerzeller Trust Company Geneva – raising questions about Swiss bank accounts.

During the hearing before Pakistan’s Supreme Court, Tareen was asked no questions about the Swiss connection of the ‘Trust Deed’ and no UK and foreign bank statements were presented before the court; the court didn’t go deep to ask for the full paper trail, but just one ‘Trust Deed’ has raised several questions about Tareen’s various versions around his £7 million Hyde House in Newbury, UK.

Interestingly, HSBC Guzerzeller Trust Company of Switzerland has been extensively mentioned in the ICIJ Panama Papers report. The Financial Times (FT) reported that the banking group HSBC and its subsidiaries, alone, account for more than 2,300 of the 15,600 shell companies created by the Panama-based firm over nearly four decades.

The trust deed of Jahangir Tareen is witnessed by one Ian Iredale, bank officer of HSBC’s private Geneva bank, which specialises in dealing with high-value clients. This vital fact recorded on the last page of the trust deed raises a strong suspicion that Tareen holds or held Swiss Bank accounts.

A chartered accountant, who advises on offshore shells and trusts, said that someone who doesn’t have a Swiss account wouldn’t get the services of Swiss bankers to get his offshore trust registered – and that too in Geneva. He said Shiny View Limited is registered in British Virgin Islands (BVI) and Hyde House property, being debated and scrutinised in the Supreme Court, is located in United Kingdom.

The HSBC Guyerzeller Trust Company SA operates as a subsidiary of HSBC Private Bank (Suisse) SA. This is located in Switzerland, in the heart of the financial and private banking district of Geneva.

Jahangir Tareen’s ‘Trust Deed’ is witnessed by a person with the address of 2, Quai du Général-Guisan, Geneva, and this is the address of a luxury real estate company called “Société Immobilière Atlas”.

This further strengthens the fact, that sponsors of the offshore trust, formed to park the £7 million Hyde House in Berkshire UK, have well entrenched Swiss business and banking connections.

The ‘Trust Deed’ is signed by one Valerie Michalowski who is a well-known offshore ‘Trust Administrator’ in Geneva. Valerie Michalowski is a Swiss national and resident in Geneva. She specialises in administration of a variety offshore trusts, offshore companies and foundations for high net worth clients. She is well known in Geneva’s financial circuit for carrying out special transactions (acquisition/sale of real estate, and registration of offshore companies for billionaires).

The offshore trust expert was then working for HSBC Guyerzeller Trust Company, Geneva, and is presently senior advisor at Summit Trust International Switzerland – another company that specialises in offshore wealth management. A fact worth mentioning is that the Summit Trust International also finds a mention in Panama Papers as a leading facilitator of offshore shell companies.

The fact that expert Valerie Michalowsk who had Tareen’s offshore trust registered, is based in Switzerland and provides services to high-value individuals associated with Swiss banks, raises a key question; why was the transaction of Tareen’s trust registered in Switzerland?

This also highlights the fact that Tareen did not present the detailed banking record of overseas bank accounts in UK (or Switzerland) before the Supreme Court to avoid giving any insight into how the funds reached Shiny View Limited’s account, how these funds were used and whether funds from any other country or source were also deposited in this account, including from Switzerland and Canada.

Tareen’s lawyer has been repeatedly highlighting, that funds went out of Pakistan through legal channels but never produced overseas bank details.

Another very interesting aspect of Jahangir Tareen’s offshore ‘Trust Deed’ is that it is registered in St Helier Jersey. The territory is often considered a major world offshore financial haven for super wealthy individuals. Imran Khan’s Niazi Services Limited was also registered in Channel Island St Helier Jersey.

Five years ago, at its peak, the value of assets held through Jersey – its offshore banks, trusts and investment funds – was estimated at £700bn-£800bn, according to the island’s former chief adviser Colin Powell. The figure is equivalent to about half of the UK’s annual economic output.

Another key fact revealed by analysis of Jahangir Tareens ‘Trust Deed’ is that the trust provisions clearly show that he practically controls the trust. Hence its non-declaration with the Election Commission of Pakistan (ECP) and the Federal Bureau of Revenue (FBR) is seen as indefensible for the PTI leader.

In section 6.2, the settler of the trust (Jahangir Khan Tareen) has authority to direct the trustees to pay income of the trust fund to himself as lifetime discretionary beneficiary. Similarly, section 6.3 and 6.4 empower the trustees to pay capital of the trust fund to discretionary lifetime beneficiaries (Tareen and his wife Amina Tareen). The trustees are also empowered by the trust deed to lend money from the trust fund to lifetime discretionary beneficiaries (Tareen & wife), interest-free, and may even write it off.

Another key provision of the trust deed which gives absolute control of the trust to Jahangir Tareen in his role as settlor, in the constitution of the investment committee to manage investments and real estate portfolio of the trust. All key decisions pertaining to multi-million dollar investments will be made by the investment committee. Whereas Jahangir Tareen is the first and controlling member of the investment committee, and even two other members of the investment committee are to be appointed by the settler, Tareen. Section 2 of the Schedule I of the trust deed stipulates all the details pertaining to the investment committee. All provisions are designed to give unfettered control to Jahangir Tareen regarding all matters pertaining to the investment committee.

Section 5.2 and 5.7 further reveal that Jahangir Tareen, in his capacity as settlor of the trust, will call the shots in all important financial matters.

The Trust deed gives the settler (Jahangir Khan Tareen) powers to give directions to trustees to make real estate owned by the trust available for use and enjoyment of himself and his family, or guests or any other person. The ‘trust’ provisions also empower Jahangir Tareen to direct that real estate owned by the trust to be put on sale in light of his directions, the settlor (Tareen).

Another intriguing feature of the Trust deed is, that in a number of sections of the trust deed special provisions have been created vis a vis Canada and its tax law. These special provisions have been made part of the trust deed in order to cater for the legal compulsion created by famous Canadian tax and offshore trusts case called “Fundy Settlement”. Canadian Tax courts and Supreme Court have taken away the blanket protection enjoyed by offshore trusts. In Canada “offshore” and “illegality” are almost synonyms.

But this special provision for Candian Jurisdiction raises the question as to what’s the Canadian Connection? Does Tareen’s trust own properties or hold investments in Canada, if not why special provisions for Canada?

Jahangir Khan Tareen had told Shahzeb Khanzada on Geo News that he owned a property in Canada which he has sold. What happened to the income of that Canadian property? Was it owned through an offshore company?

Whether there are other properties owned by Tareen’s trust is not known and neither did the court ask Tareen’s lawyer about the Canadian property and its transactions, nor did his lawyer submit anything in this regard.

In schedule IV of the trust deed, the beneficiaries are mentioned, other than the discretionary lifetime beneficiaries (Tareen & wife). This schedule in para one contains the name of Jahangir Tareen’s wife. Tareen throughout the court proceedings has been arguing that he is not a beneficiary of the trust but his children are; but in the trust deed his wife is also mentioned as a ‘Beneficiary’.

Even if Tareen’s contention is accepted, he becomes liable, since as per election law, declaration of assets of one’s spouse is mandatory and hence Tareen gets trapped by his own argument that beneficiaries of the trust are listed in the deed.

It is worth noting, that the legal issue before the Supreme court was not about the source of funds, but whether assets were declared or concealed.

Going by this yardstick, Tareen may find it difficult to justify non-declaration of his wife’s offshore asset, his own control, his authority over the trust and the ‘Discretionary Lifetime Beneficiary’ status of himself and his wife.

A source close to Tareen, when approached for comment, said that Tareen had told the court that the trust deed was signed in London and that the witnesses gave their Geneva addresses because they live in Geneva and that’s where the headquarter of the HSBC is located.

“That’s how Geneva was mentioned.”

When told that the Trust deed indeed establishes that it was signed and executed in Geneva and not in London because if it was London then the witnesses were legally bound to declare their presence in London, the place where the trust would have been witnessed, the source said he can’t answer further questions.

Lawyers have confirmed that it would have been illegal for the witnesses to register their place as Geneva if they were in London. Three lawyers have confirmed that it would be “illegal” for Swiss witnesses to register their place of presence and witness status in Geneva if they signed these papers while in London.

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