India’s Foreign Tax and Tax Research (FTTR) division has sought information from various countries, including Singapore, on the ₹6,500-crore investment by Singapore’s Biometrix Marketing in companies belonging to Reliance Industries (RIL) or its promoter group.

Sources told BusinessLine that following the Comptroller and Auditor General’s (CAG) recent rap on the knuckles of the Income Tax (I-T) Department for not assessing RIL’s past tax liability correctly, all pending cases, including the Biometrix FDI, are being re-looked.

The FTTR handles classified tax information between India, tax havens and other countries. It can seek information from foreign jurisdictions.

The investment by Biometrix into Reliance Ports and Terminals, Reliance Utilities, Reliance Gas Transportation Infrastructure and Relogistics Infrastructure by acquiring compulsorily convertible preference shares (CCPS), which was among the largest FDI from Singapore, has been under the I-T scanner since 2011. Investigators suspected round-tripping of funds, sources said.

Loan from ICICI Bank

Biometrix allegedly took a loan from ICICI Bank Singapore and lent to four RIL group companies during Financial Year 2007-08. The four-year loan was repaid with interest out of remittances from RIL group companies “other than those it had lent to”. CCPS of four RIL group companies held by Biometrix were purchased by other RIL or promoter group companies to bail Biometrix out of its loan obligation.

“The Biometrix FDI trail went cold for four years after a few officials were transferred. With the CAG questioning the I-T Department’s approach towards RIL, the matter will be taken to its conclusion,” said an official source.

The I-T investigation report, reviewed by BusinessLine , alleged that the source of the interest payment on the loan by Biometrix was not clear. Also, clarity was required on the source of funds of entities that bought CCPS from Biometrix, the use of the ₹6,500 crore by RIL or group companies and the tax implications. Companies that bailed out Biometrix may have taken a hit on the currency fluctuation as the loan was in dollar terms but the remittances were in rupees.

Biometrix was allegedly a shell company. Reliance Genemedix plc UK bought 9 per cent stake in Biometrix by investing $9,900 in 2007. The due diligence report on Biometrix submitted by ICICI Bank shows one Thakur Sharma, then President of RIL in the US, as Biometrix director, the I-T report says. Reliance Genemedix and Strasbourg Holdings, owned by Atul Shanti Kumar Dayal and Sandeep Tandon, promoted Biometrix, which was liquidated after the loan repayment. Tandon was another RIL group official.

‘Investments by Biometrix into Indian entities have been fully in accordance with the law and scrutinised by the I-T Department years ago. I-T has been provided with all information and been apprised of the facts. This is a regurgitation of an old matter,” an RIL spokesperson said in response to an email.