Why Britain is the playground of fugitive billionaires

Indian fugitive Nirav Modi has been staying in London since early this year. Kiran Rijiju, India’s Minister of State for Home, has confirmed that Baroness Williams, the British Minister for countering extremism, had assured him that the British government would fully cooperate with India’s efforts to extradite Nirav Modi. But those are mere assurances. Going by track record, the British have not adhered to a single Indian request for extradition despite the extradition treaty being in place since 1991. In fact, the British do their best to thwart extradition of people involved in financial frauds so that the looted wealth stays in Britain, in its banks and its offshore destinations.

After Lalit Modi and Vijay Mallya, Nirav Modi is the third Indian billionaire fugitive seeking asylum in Britain. But that is only because the British love fugitive billionaires. The British policy is to grant asylum first and then let countries plead in the British courts for extradition. The process is lengthy and cumbersome and often takes years as Britain has some of the best legal brains and lawmakers fighting for the wealthy billionaires who seek refuge in the UK.

In the case of Vijay Mallya, it is ‘Boutique Law’, a firm run by Anand Doobay and Christina Russell, who are the legal advisers. The top-notch law firm gives an all-round service and defends its billionaire asylum-seeking clients from ‘corruption and bribery’, ‘money laundering and sanctions’, and ‘extradition and Interpol’. Doobay was appointed by British PM Theresa May to a panel to review the United Kingdom’s extradition arrangements when she was the Home Secretary. Nirav Modi may also be seeking the services of the same law firm.

The British, however, do not favour asylum seekers and have been at loggerheads with the EU on this issue. But the attitude changes drastically when it involves fugitive billionaires. Here Britain is way ahead of other EU nations.

A Deutsche Bank report says that between 2006 and 2015, UK received $129 billion from fugitive asylum seekers that was routed to its offshore havens — the British Virgin Islands, Cayman, Gibraltar, Jersey and Guernsey.

Since the UK does not prosecute money-laundering offences, banks in the UK launder money with impunity, says Corruption Watch. Hence the UK is considered the safest and most lucrative haven for financial fraudsters.

Corruption Watch estimates that “UK’s wealth management industry manages $800 billion of global wealth at particular risk of laundering.” The Financial Control Authority (FCA), which is the regulator for the financial sector, has brought zero prosecutions for breaches in UK’s Money Laundering Regulations since 2007, claims Corruption Watch.

Britain’s financial industry is based on opaque laws, but the FCA has not budged despite immense global pressure. Be it money laundering, round-trip trading or hedging securities, UK laws provide full protection to investors against any legal scrutiny. The International Commodity Exchange ICE at London is the hotbed of deal-making where Big Banks and Big Oil along with Swiss commodity traders provide unique opportunity to convert all forms of money into commodity trading wealth with no questions asked.

US Senators Carl Levin and Diana Feinstein have repeatedly asked for transparency in the deregulated electronic London futures market where thousands of transactions every minute enable round-trip trading in commodities.

This is why ICE is at the heart of the commodity market volatility worldwide. In June 2008, after crude oil prices rose to around $140 per barrel despite moderate demand, US Senator Carl Levin introduced “Close the London Loophole Act” so that the US regulator CFTC retained the authority to obtain information and if need be “to detect, prevent and punish price manipulation by any trader who trades US crude or other commodities on any foreign exchange”. But the information the Americans got only monitors one single room in a massive opaque glass house of ICE.

As a matter of fact, the cleverly devised British tax laws and its money-laundering opportunities, its bouncy property and commodity trading markets, its National Lottery and sports betting avenues, and a nearly absent financial regulator has made Britain the playground of fugitive billionaires. And they come in all shapes and colours: the Arab Sheikhs, the African despots, the East European criminals, the Russian oligarchs and the Indian tax fugitives.

According to Tulip Financial Research, Britain has some 1,35,000 “high-net-worth” individuals, with liquid assets averaging £6.4 million. The Independent says Britain is today known as ‘Switzerland on the Thames’. It says: “More than 200 foreign law firms now have offices in the UK, while more cash is said to be managed out of a couple of square miles of Mayfair than in the whole of Germany”. So, it is highly unlikely the UK will adhere to India’s extradition request.

The biggest wealth to Britain comes from Russian tax fugitives and oligarchs. Among them are Nikolay Glushkov, former Director of Aeroflot, who was accused of the multi-million dollar fraud and corruption, Andrey Borodin, the former President of Bank of Moscow, accused of financial crimes, Boris Berezovsky and Sergei Kapchuk, all billionaire Russian fraudsters who have received political asylum in Britain. They have all bought exclusive properties in Mayfair, in Berkshire, in Belgravia and in Chelsea, along with dozens of other billionaire fugitives and have helped make the UK the undisputed financial capital of the world.

The writer is an author and senior journalist. Views are personal.