‘I had no idea that Cayman Islands does not levy income tax’: Vivek Doval

On day 2 and 3, Doval was cross-questioned about his links to a firm named in the Paradise Papers. He also denied giving a "formal" interview to Zee News.

WrittenBy:Gaurav Sarkar
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National Security Advisor Ajit Doval’s son, Vivek Doval, was cross-examined for three consecutive days at the Rouse Avenue District Court House complex last week. This was in connection with his defamation against The Caravan magazine and senior Congress leader Jairam Ramesh. 

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At 2 pm on July 30, a suit-and-tie Doval was back in the witness box in Additional Chief Metropolitan Magistrate (ACMM) Samar Vishal’s courtroom. He was standing, hands folded and fingers entwined, looking into the distance through the tinted window, waiting for the judge to enter. The rest of the room remained seated.

When ACMM Samar Vishal entered, he had a hint of a smile on his lips. He glanced at the room before taking his chair. Yesterday’s cross-examination had ended with Advocate Bhavook Chauhan, counsel for Caravan reporter Kaushal Shroff, circling in on Doval with a series of questions related to whether a certain Mr Amit Sharma was a portfolio manager at GNY Asia fund. The Caravan had published an article on January 16, 2019, titled “The D-companies” with the kicker “Ajit Doval’s sons run a  web of companies including a Cayman Islands hedge fund even as father demands crackdown on tax havens.” The article has Shroff’s byline.

Doval took his seat last. Jairam Ramesh’s counsel moved an exemption application on his behalf. An oath was administered to Doval, and the cross-examination picked up from where it was left off the previous day.

Chauhan shot his first question. “Would it be correct to say that in order to manage a hedge fund, one needs financial qualifications in terms of…?”

“It is correct to say that one needs financial expertise in terms of qualifications and work experience in finance, in order to manage a hedge fund,” Doval said.

“Although you’ve told the court (previously) about what your qualifications are…my question is very specific. Can you tell us which of your qualifications has given you the expertise to run a hedge fund?” said Chauhan, adding: “You may keep it brief.”

Doval began: “All of life’s experiences…” but was cut off by Chauhan. “I meant educational qualifications.”

Doval continued as if he wasn’t interrupted: “…including professional and academic qualifications has enabled me to be a good investor. That is the basis of a successful career in hedge funds, across. There is no particular academic qualifications which allow anybody or me to operate a hedge fund.”

“I will have to ask this question again. I am asking for specific qualifications.” Doval said: “I’m sorry, I don’t want to be hasty, but I’ve learnt it from you…”

Chauhan shifted his angle a little bit. “Can you tell us how many years of work experience have you had in the financial world that added to your expertise in managing the hedge fund? I’m talking in terms of numbers.”

Doval said: “Sure. 16 years.”

“Can you tell us the maximum quantum or amount of money you were entrusted with while you were working with different organisations to gain work experience?”

Doval paused, thinking. “I was part of a team at Boyer Allan which at its peak was managing $1.8 billion of assets. I was a fund manager at British Airways Pensions managing a portfolio of $2 billion approximately.”

“You had stated in your evidence recorded on May 27, 2019, that as a fund manager you have to give regulatory exams every year. Can you tell (us) the range of topics you’re required to cover for these exams?”

Addressing ACMM Samar Vishal, Doval said: “Your honour, I have a list of subjects and my marks that I want to submit as evidence. I was to place it on record. I have the mark sheets of those exams right now with me.”

ACMM Samar Vishal approves and Doval reaches into a black bag and pulls out the documents.

“It is okay if you want to place it on record,” said Chauhan. “I have no objection.”

Doval places “Training and Competence Certificate” on record. He said: “I also have the past certificates beyond three years, which I can bring if required…”

Chauhan continued: “Would it be correct to say that the aforesaid regulatory exams included anti-money laundering and market conduct in the course?”

“Yes.”

“Would it be correct to say that in order to efficiently manage a hedge fund, it is necessary to conduct due diligence of the financial market in order to increase the prospects of profits and reduce market risks?”

“In a profession in which the outcomes are uncertain, such as fund management, fund managers like myself consider several macro and micro factors in evaluating,” replied Doval. “Ex-ante we make best efforts to make the best investments. However, ex-post some of these investments are more or less successful than others. It is a very trivial question…”

“It’s a very trivial question but I deem it important for the case,” retorted Chauhan. He continued: “Do you have knowledge of accounts, balance sheets, profit and loss accounts?”

“I am not an accountant,” said Doval. “However, I have working knowledge of the major financial reports as mentioned.”

Doval’s counsel said that he did not respectfully want to object, but that he “failed to realise that on a defamation case, is qualification important?” Chauhan said, “It was a case of reputation…so it is relevant.”

“If you have not objected, then let it go on,” Samar Vishal told Doval’s counsel.

“I am not objecting, just asking where is it going?” said Doval’s counsel, and sat down. Chauhan continued his questioning.

“Are you aware of the concepts of income tax, corporate tax and capital gains tax?”
“Absolutely, yes.”

“Before the registration of GNY Asia fund at the Cayman Islands, did you, as a prudent financial expert/analyst, try to ascertain the rate of income tax, corporate tax, and capital gains tax, as applicable in Caymans Islands?”

Doval replied: “No, I didn’t. However, the reason for registering the fund in the Cayman Islands was premised on where other majority of hedge funds get registered, as opposed to any material tax benefits/tax factors that were provided there. In hindsight…forget it.”

Chauhan then asked Doval whether he had taken the same measures after the registration of GNY Asia fund.

“No, I didn’t,” replied Doval. “For the same reasons,” added his counsel.

Chauhan vehemently shook his head and said (to Doval’s counsel): “No, you should not do this…”

Doval continued: “This has never been a consideration that I have factored in before or after the launch of the fund.”

Chauhan went on to make a suggestion. “It is wrong to suggest that myself being a qualified and experienced financial expert/analyst, even before the registration of GNY Asia fund, I was aware that Cayman Islands does not levy income tax, corporate tax, and capital gains tax.”

ACMM Samar Vishal said that the suggestion needed to be rephrased. “I have understood your honour’s query,” said Chauhan. “I will rephrase.”

Chauhan suggested: “It is wrong to suggest that I have falsely deposed that I did not try to ascertain the rate of income tax, corporate tax, and capital gains tax, as applicable in the Cayman Islands, as I am aware that no capital gains tax, corporate tax, and income tax is levied at the Cayman Islands.”

Doval, who was sitting with his arms across his chest, raised his hand and said: “Let me ask one question…” However, he was cut across by ACMM Samar Vishal, who said, “You only have to answer.”

Upon being asked by Chauhan, Doval replied: “At the inception, or rather, before the launch of the fund and after the launch of the fund, I had no idea that the Cayman Islands did not levy income tax, capital gains tax and corporate tax.” 

He voluntarily added: “Now, having said that, the relevant factor in launching the fund was being aware that the geographies in which the fund invested, (they) did apply capital gains tax and income tax on their investments…so these proceeds were taxed.” 

Doval further said: “Also to note, I am not a tax expert. Just like the legal profession is a specialised profession, the finance profession has several lines—of which investment in public markets is one, and taxation is another.”

Chauhan made a suggestion. “It is wrong to suggest that my aforesaid explanation is an afterthought or that I am purposely feigning ignorance with respect to my knowledge about taxes not being levied in Cayman Islands, as this would falsify my allegations.”

“Did your fund ever make profits?”Chauhan asked Doval.

“Yes.”

“Did GNY Asia fund ever pay income tax, corporate tax, or capital gains tax on the profits of the GNY Asia fund, to the Cayman Islands government?”

“The GNY Asia fund made profits at several periods and on a regular basis paid capital gains tax…in the jurisdiction in which it was investing.”

“You haven’t answered my question,” said Chauhan.

Doval swiftly replied: “Let me.” “Given there were so many taxes that the fund was paying in various geographies, I genuinely was unaware of taxes, if payable, in the Cayman Islands,” he added.

Chauhan continued with his questioning. “Who was maintaining accounts of the fund at the Cayman Islands?”

Doval responded: “The accounts for the fund are maintained by the administrator which in the case of the GNY Asia fund was Wells Fargo (now called SS&C). The accounts were subsequently audited by Price Waterhouse Cooper.”

“Now, you had spoken about having attended a certain Edelweiss conference wherein you were training young trainees, rather one, Akul Jhajharia. Would it be correct to say that in the Edelweiss conference held in Mumbai on February 8, 2017, the GNY Asia fund was represented by Mr Akul Jhajharia? You might have attended the conference but the fund was represented by him (Jhajharia).” Doval replied: “It is incorrect.” He volunteered: “The fund had to be represented by an experienced fund manager or analyst.”

Chauhan pulled out a document and handed it over the court. The same document was put to Doval. It was a letter from the website of Axis Bank which showed that Akul Jhajharia was the participant on behalf of GNY Asia fund at the Edelweiss conference held in Mumbai on February 8, 2017.

After some more questions, Chauhan asked him to see the article once more.

He drew Doval’s attention to a paragraph of the Caravan article that read “date on companies registered in the UK, which The Caravan accessed, shows that there are 120 companies registered at GNY Capital’s new address.”

“Is it factually correct?” Chauhan asked Doval. “While I cannot verify the exact number of companies registered at that address, it is only normal for very small businesses in the UK to use their accountant’s address for a variety of corresponding purposes. The accountants in the UK allow for this service.”

Doval was shown another printout, which has been obtained from the official website of the Companies House in the UK. It shows that 120 companies were registered at 12 Gateway Mews.

“Are you aware of this document?”

“I have seen this document for the first time now,” replied Doval. He added: “However, it does not surprise me at all, and is in line with what I had mentioned previously. Many small businesses use their accountant’s address…”

“Can you tell if any of your family members own a flat in a complex called Unitech Horizon in Greater Noida?” asked Chauhan.

“There is a flat in Unitech Horizon in Greater Noida, which, to the best of my memory, is jointly owned by my father and myself. However, it should also be noted that this flat had been bought long back, perhaps in the time-frame of 2010-2011 approximately. Due to…”

ACMM Samar Vishal cut him off. “It is required you only answer what you are asked.”

Chauhan continued. “Can you tell as to when it (the flat) was registered in the joint name of you and your father?”

“If I jog my memory, it was perhaps in early 2017,” said Doval.

Chauhan ushered him to see the Caravan article once again. 

“The next paragraph says, ‘media reports indicate that Vivek Doval was in Noida in mid-January 2017, along with his father, the NSA Ajit Doval. Vivek arrived at a registry office in Noida to complete ownership formalities of a flat purchased in his name of a complex called Unitech Horizon’. Is this factually correct?”

Doval replied: “I do not believe the statement is accurate. I believe that the flat is jointly in the name of my father and myself. The delay in the registration of the flat was on account of Greater Noida Authority not registering flats over a period of six to seven years. Consequently…the timing of registry was purely coincidental.”

“Mr Doval, come to the first page of the article,” said Chauhan. “In this paragraph, there is a line ‘Ebanks is named in the Paradise Papers…a leaked database of over 13 million documents…”

“I am not aware,” came the response.

At this stage, Doval is shown a document which is a printout from the official website of the Consortium of Journalists regarding offshore leaks …referred to as Paradise Papers pertaining to Don W Ebanks.

“I have never seen this document earlier,” said Doval.

“Before I showed this document to you today, did you know Mr Ebanks was mentioned in the Paradise Papers?” asked Chauhan, as he circled in closer with his questioning. “Can you tell, as to before today, if you ever came to know of the allegations that Mr Ebanks was mentioned in Paradise Papers?”

“Yes,” replied Doval. “Post the printing of the article in the Caravan magazine, I spoke to Mr Don W Ebanks and I inquired about the veracity of these claims. He said that a number of unsubstantiated claims keep coming up but his firm—Walkers International and The Cayman Island Monetary Authority (CIMA)—follows very strict KYC and due diligence norms. It is also noteworthy that Mr Don W Ebanks was the head of compliance for CIMA over 10 years back, along with being a Managing Director at a leading accountancy firm called Ernst and Young. In my own interaction with Mr Don W Ebanks, he has always come across as professional and a man of integrity.”

“Please see the article again,” said Chauhan. “The legal address of GNY Asia fund shows that it is under the care of Walkers Corporate Limited.”

“It would appear correct that the legal address of GNY Asia fund would be at Walkers Corporate. Being a very small fund, GNY Asia fund could not afford to have offices in multiple locations. The address of GNY Asia fund was of its lawyers, Walkers Corporate Limited, who had also helped GNY Asia fund in (its) fund formation. In the UK, this kind of arrangement by lawyers or accountants and their clients is fairly known.”

Chauhan asked him to see the article once more. He points out to a part that reads: “The legal address of GNY Asia fund shows that it is under the care of Walkers Corporate Limited, a firm that finds a mention in the Paradise Papers as well as the Panama Papers, another leaked database that includes attorney-client information of millions of offshore entities.” He asked Doval whether he knew anything about this.

“Well, I cannot confirm or deny it,” said Doval. “I am not aware.”

He is then shown a fresh document by Chauhan. “Have you seen this document before? Can you tell, as to before today, if you have ever come to know that Walkers Corporate Services Ltd was named in the Paradise Papers?” Chauhan asked Doval.
“No. I have no verified information before today that…” came the response.

Chauhan asked: “Would it be correct to say that at the time of the filing of the present complaint, you were aware of the report titled: ‘Indian Black Money Abroad in Secret Banks and Tax Havens?’”

“As stated before, I was aware of the report, but unaware of the contents of the report. I have not read it,” said Doval.

Chauhan rephrased. “Did you read about the contents of this report any point of time?”

“No.”

“Did anyone inform you about the contents of the report at any point of time?”

“No,” replied Doval. “But I was made aware that a report had been printed several years back when I was working at British Airways Pensions in London. Perhaps, because I was out of the country, I hadn’t read the report at that time.”

Chauhan placed a suggestion before the court. “It is wrong to suggest that I was aware of the contents of the said report even at the time of filing the present complaint. It is wrong to suggest that I am…denying the knowledge of the contents of the said report as it would falsify my allegations of defamation.”

He continued: “Mr Doval, your interview was conducted by Zee News, which was published in DNA on January 21, 2019. Do you recollect?”

Doval’s counsel objected, saying that “this is an event which is post the filing of complaint, but Chauhan said, “I cannot expose my questions but I can discredit him.”

ACMM Samar Vishal asked Vivek Doval if he had given an interview to Zee News. “I have not given any formal interview to either of these two news agencies,” came Doval’s response. “However, I did have a chat with a couple of people from the media.”

A fresh document is shown to Doval. It is a printout of the aforementioned article from the official website of dnaindia.com.

“My question is, would it be correct to say that this article would show questions put to you and your responses to the said questions?” inquired Chauhan.

Smiling slightly, Doval replied: “No, I do not believe that this article is reflective of an interview.” He also said that he could not associate the picture used in the article, or the contents of the article, with any interview he had given.

Chauhan drew his attention to the first page of the DNA article and said that it showed how Doval had given a point-by-point rebuttal and answered questions. However, Doval’s counsel said how could the contents be put to their client, since Doval had neither authored it nor read it.

ACMM Samar Vishal stayed the objection. 

Doval went on to say: “I can quite categorically state that I have not said this to Zee News or anyone for that matter.” He further volunteered: “I could not have said so because I have never read the report.”

Chauhan made a suggestion. “It is wrong to suggest that I am deposing falsely that I did not give any interview to Zee News. It is wrong to suggest that the contents of the document would show the conversation that had taken place during my interview. It is wrong to suggest that I am purposely disowning the said interview as it would expose that I had already read the said report.”

Doval did not seem to grasp what a “suggestion” is, so Chauhan jokingly went ahead and said “it’s all false.” He then explained that a suggestion is a technical/legal term.

A document titled “Indian Money Abroad in Secret Banks and Tax Havens” downloaded from the BJP website was put next to Doval.

“I put it to you that you are aware of the contents of this document,” said Chauhan. He added: “I am conscious he will say no but I have to show him the document.”

Doval replied: “You have been answering a few things for me, so why don’t you go ahead and answer it?” He then replied to the question with a “no”.

ACMM Samar Vishal ended proceedings for the day. The hearing would continue at 10 am the next day. “I hope you will finish it (cross-examination) off by lunch, ACMM Samar Vishal said, addressing Bhavook Chauhan.

“I will try to.”

Day 3

Chauhan began the day’s cross-examination by showing Doval a document, asking him whether Motilal Oswal, HDFC Life Insurance, and Kotak Mahindra asset were present at the Edelweiss conference. “I am not even asking for correct figures regarding turnover…

“If it is your knowledge, you can give an answer,” said ACMM Samar Vishal.

Doval replied: “In a conference, there are many participants. I cannot say who attended and who didn’t in that conference.”

Now would it be correct to say that in 2019, GNY Asia Fund was not registered with SEBI as a foreign portfolio investor?”

“As stated before, the GNY Asia fund’s FPI provisional license was for the period of the first few months of 2017. I cannot say about the SEBI registry because I have not checked it subsequently.”

“Now please see the document about the FPI license,” said Chauhan, drawing Doval’s attention towards the document which is the certificate of registration, and the letter dated December 22, 2016 from Edelweiss Custodial Services Limited to GNY Asia fund. “Mr Doval, can you tell the court if have you seen this letter? Can you tell if you had received the certificate of registration issued by SEBI along with this letter dated December 21, 2016?”

Doval responded: “The correspondence with Edelweiss Securities was received by the middle office (support office) of Gordian Capital. I was informed that the GNY Asia fund had obtained the certificate by the middle office.”

When Chauhan asked him whether he had received the certificate along with the letter, Doval said that he hadn’t received the letter, so he couldn’t say. 

“Did you read the contents of this letter dated 21.12.2016 before filing the complainant?”
Doval looked at the document before and said: “Yes, I have skimmed quickly through the contents of the letter.”

“Would it be correct to say that this letter states that the FPI license issued to GNY Asia fund would expire on June 18, 2017?”

“I would read this letter slightly differently,” said Doval. Chauhan cracked a small smile. Doval read the letter once more, his fingers tracing the words. He paused and continued: “It says that the conditional registration is for a period of 180 days.”

“Mr Doval, please look at the contents of para 3 of this letter and I put it to you that para 3 of this letter expressly mentions that the FPI certificate/the conditional registration of 180 days would expire on June 18, 2017.”

Doval re-reads the letter. “I believe that this statement is essentially saying that the fund should be able to broad-base itself in the period of 180 days up to June 18, 2017.”

“Would it be correct to say that it would necessarily imply that in the event the fund fails to broad-base itself in the period of 180 days up to June 18, 2017, the registration of the fund as FPI would expire?”

Doval replied: “These are technical issues…” but Chauhan cut him across. “You say, yes or no first.”

Doval continued: “….and I am not the best person to assess this. But, if one actually looks at point six of the same letter, it seems to suggest that if the FPI fails to satisfy the DDP that it has attended broad-based criteria within 180 days, it shall be reclassified as category III and the SEBI regulations/guidelines shall apply accordingly.”

Chauhan went on to make a suggestion. “It is wrong to suggest that I am deliberately giving evasive answers. I cannot admit or deny that a plain reading of the letter dated Dec 21, 2016, would show that the conditional registration of the Fund was to expire on 18.6.2017 for failure to meet the conditions.”

ACMM Samar Vishal told Chauhan: “I think you cannot give this suggestion, it will give a completely different….he has not said so. He said he is not the best person to assess this. How can you say it is wrong.”

Chauhan rephrased. “Would it be correct to say that the fund was not able to meet the conditions laid down by SEBI for continuation of registration after the expiry of 180 days?”

“As stated before, it is a technical issue. However, being prudent financial managers, GNY Asia fund did all the advice of Edelweiss Securities, everything to comply with the integrity of the market and the spirit of the law.”

Chauhan persevered and gave an example of how Doval could say “one of three things”.

“You haven’t answered my question,” said Chauhan, but was interrupted by Doval. “You are not going to interrupt me,” Chauhan reminded him.

However, ACMM Samar Vishal said that no one could dictate what the answer has to/should be.

Chauhan addressed ACMM Samar Vishal and said: “Your honour, I put a question to the witness. He is required to answer it. He has done everything except to answer the question. My question was whether those conditions were met by the fund or not.”

A note was made mentioning Chauhan’s submission, that the witness (Doval) had not answered the question Chauhan put to him. The same note mentioned that on the contrary, the witness claimed that he had answered the question correctly. “The legal consequences of these submissions shall be considered taken care of at the time of judgement,” said ACMM Samar Vishal.

Chauhan made a suggestion. “It is wrong to suggest that I am evading answering the aforesaid question.

“Can you tell as to when did the provisional license issued by SEBI to the fund expire?”

“It is my understanding that  the provisional category II GNY Asia fund’s license expired on June 18, 2017.”

Chauhan made a suggestion. “It is wrong to suggest that I have been modifying my answers to the questions put to me with respect to the FPI license issued to the fund and am giving contradictory replies.”

He continued his cross-examination. “Can you show any document post-June 18, 2017 that would show that the fund was registered as FPI in the year 2019?”

Doval replied: “As stated, this task was undertaken by the middle office of Gordian Capital. However, there is a chain of emails between Gordian Capital and Edelweiss Securities, in which GNY Asia fund kept enquiring about the regulations and was assured by Edelweiss that we (GNY Asia fund)  are fully compliant.”

“Can you show if any of the said emails would mention that the Fund was registered as FPI in 2019?”

Doval put his hands on his lips and thought hard, looking upwards at the ceiling. “It’s a funny question…” but Chauhan cut him across: “It may be funny to you, but…”

ACMM Samar Vishal said there was “no need to give adjectives here.”

Chauhan suggested: “It is wrong to suggest that I have given an evasive answer to the question put to me. It is wrong to suggest that I have no document to show that the fund was registered as FPI in 2019.”

At this point, ACMM Samar Vishal told Chauhan he was “unable to understand what you’re trying to do”.

“Can you show any document which would show that the fund was registered as FPI with SEBI in 2019?” Chauhan asked Doval.

“I cannot.”

“I put it to you that you cannot produce any document to show that the fund was registered as FPI with SEBI in 2019 since the said fund was in fact not registered as an FPI with SEBI in 2019,” said Chauhan.

“I cannot agree or disagree with this suggestion exactly,” replied Doval.  “My own reading is that our FPI II license was valid till June 2017. Just like someone’s driving license is for a time period and one dies not check it after its expiry date. Hence, I have not checked.”

Chauhan drew Doval’s attention to a document/article. “In 2014, SEBI classified…GNY Asia was not registered as an FPI,” he said, quoting the piece. “Is it factually correct?”

At this point, Doval’s counsel tried appealing that the said paragraph was too long and that it could be broken down into smaller bits, but ACMM Samar Vishal said: “The witness is competent…trust him.”

Chauhan continued: “Mr Doval, see the next to next paragraph that reads ‘Edelweiss Custodial Services Turnover has seen exciting rises in recent years—from ₹5.64 crore to…’ Would it be factually correct?”

“GNY Asia fund was a very small fund and…that the India allocation was never more than 15 per cent. However, how Edelweiss, a much larger company, was performing, was of no consequence to GNY Asia fund, hence, I cannot admit or deny the aforesaid statement made in the article.”

“As a prudent financial expert/analyst, did you not deem it important to analyse the financial statements of Edelweiss Custodial Services at any point of time?” Chauhan asked him.

“Given the fact that Edelweiss Custodial Services was an unlisted company and the mandate of GNY Asia fund was to invest in listed companies in the public markets, even if GNY Asia fund wanted to invest in Edelweiss Custodial Services, it couldn’t. There are thousands of very successful private businesses where public market funds cannot invest. Hence, as a prudent financial investor, I have sought to spend my time in areas where I can use my expertise to benefit GNY Asia fund unitholders.”

“As a prudent financial expert/analyst, did you not deem it important to analyse the financial statements of Edelweiss Custodial Services at any point of time, for engaging the said company to provide custodial services to GNY Asia fund in India?”

“As stated, as Edelweiss Custodial Services was a service provider to GNY Asia fund, it was never necessary to analyse their financials.”

Chauhan asked Doval to see the Caravan article once more. He pointed to a part that read: “Jhajharia also claims to be an associate at ZAD Support Services Private Limited—the former title of a company now named Torcia Advisors Private Limited, where Shaurya (Doval) is a director.” He then asked Doval whether this information was factually correct.

“What is factually correct?” asked Doval.

Chauhan asked whether it would be correct to say that Torcia Advisors Pvt Ltd was previously known as ZAD Support Services Private Limited.

“I do not know,” came the response.

At this stage, the witness had been put a document which is certified copy from the registrar of companies, which would show that Torcia Advisors Pvt Ltd was earlier known as ZAD.

“No, I have not come across this document,” said Doval. 

“Are you aware that Mr Shaurya Doval and Mr Puneet Kamra were directors in Torcia Advisors Pvt Ltd?”

“No.”

“Please see the article,” said Chauhan, quoting a part from it: “Torcia Advisors is registered to a residence in Dwarka that is owned by the NSA Ajit Doval.” He added: “Is it factually correct?”

“I do not know.”

“Can you tell if Flat no 343, Chandanwadi Society, Sector 10, Palam Village, Dwarka, New Delhi, is owned by any of your family members?”

“I cannot precisely tell you that that address belongs to anyone in the family but there is a flat that is owned in Dwarka by someone in my family.”

Chauhan once again pointed out to a part of the article that read: “In October 2015, in a letter to the registrar of companies, Ajit Doval had declared he had no objections… this residence as its registered office.”

He asked Doval: “Can you tell if it is factually correct?”

“I have no idea,” came the response. 

“Did you try to ascertain the correctness of this statement in the article after having read the same?”

“No, I have not.”

At this stage, Doval is put certified copies of documents received from registrar of companies. “Have you come across this document before?”

“No.”

Chauhan said: “You have already stated you were one directors off GNY Asia. Now, would it be correct to say that Mr Amit Sharma and you were shareholders in GNY Asia fund?”

“That is correct.”

“Would it be correct to say that Mr Amit Sharma is a director in YFin Advisors in India, whereas Mr Shaurya Doval is a shareholder in YFin advisors in India?” asked Chauhan.

According to the Caravan article, “Several people who are in business with the younger Doval brother are connected to the older one as well, or vice versa. Aside from his roles at GNY Asia and GNY Capital, Amit Sharma also serves as a director for YFin Advisor, a Delhi-based company. Shaurya Doval is the only individual with a share in the company.”

“YFin Advisors India is a dormant company which has never traded. It was an initial idea by Mr Amit Sharma and myself to create a wealth advisory company in India. To the best of my memory, 99.9 per cent of shares of YFin India are held by YFin Singapore which is another dormant company owned by Mr Amit Sharma and myself. Also, it is my understanding that Mr Shaurya Doval has no shares in YFin India. Mr Amit Sharma, in my memory, is the only Director of YFin India and there is no other Director to the best of my knowledge. And Mr Amit Sharma owns rest of the 0.1 per cent shares of the company.”

Doval volunteered: “When YFin Advisors in India was set up, Amit Sharma and myself were in London. We required a local director. In that regard, we had requested Mr Shaurya Doval to become a director and a nominal shareholder in the company. Given the fact that the company never traded and it was never meant to be a permanent arrangement, both the directorship and shareholding have changed. Mr Shaurya Doval is no longer a director or a shareholder of YFIn in India.”

“It is wrong to suggest that even at present Mr Shaurya Doval continues to hold 0.1 per cent of the shares of YFIn Advisors registered in India,” said Chauhan. He also added: “It is wrong to suggest that Mr Amit Sharma is not the only director in YFIn Advisors Pvt Ltd registered in India.

Chauhan continued. “Mr Doval, I put it to you that one Mr Vipul Sharma is also a director in YFin Advisors listed in India.”
“I am not aware of Mr Vipul Sharma being Director in YFin Advisors. He is Amit Sharma’s brother in law.”

Another certified document is shown to Doval.

“Are you aware that Prince Mishaal bin Abdullah bin Turki bin Abdulaziz Al-Saud is on the supervisory board of Torch Financial Services?” Chauhan further asked Doval.

“No,” came the response. “My brother Shaurya Doval and I are professionals who follow their own careers. I have a lot of respect for my brother but my relationship with him is very personal.”

A document from Torch Fin Services is shown to Doval.

“Have you seen this printout before?”
“No.”

“Are you aware that Syed Ali Abbas, Prince Mishaal bin Abdullah bin Turki bin Abdulaziz Al-Saud, and Mr Shaurya Doval, are directors and shareholders in Torch Investment Management Pvt Ltd (Singapore)?”

“No.”

“Are you aware that Prince Mishaal bin Abdullah bin Turki bin Abdulaziz Al-Saud belongs to House of Saud and is great-grandson and a descendant of Abdulaziz Ibn Abdul Rahman Al-Saud?”

“No.”

“I put it you that anyone’s association with the House of Saud is a matter of pride and is not defamatory in any manner.”

“Give me a couple of minutes to just gather my thoughts,” said Doval. “I can only speak on my behalf and on behalf of my fund, the GNY Asia fund. The article says a lot of unrelated facts—some perhaps true and some perhaps false, put together in such a way to give a picture of something immoral and illicit happening. The House of Saud is an irrelevant point for Vivek Doval, or me, and the GNY Asia fund given I did not have any Saudi investors. So, an incorrect fact, placed with other incorrect facts creates a distorted picture of a professional, his organisation, and his life.”

At 1:22 pm, the court broke for lunch. Chauhan resumed his questioning after that. 

“Would it be correct to say that the House of Saud refers to members of the Saudi Royal family?”

“I don’t know exactly.”

Chauhan said: “I put it to you that you’re aware that Prince Mishaal bin Abdullah bin Turki bin Abdulaziz Al-Saud is a member of the Saudi Royal Family.”

“I said categorically that I’m unaware whether the gentleman mentioned is a member of the Saudi Royal Family.”

Chauhan ushered Doval to see the Caravan article once more. He points to a specific part that reads: “Jhajharia also claims to be an associate at ZAD Support Services Private Limited—the former title of a company now named Torcia Advisors Private Limited, where Shaurya is a director.” He then asked Doval whether this was correct or not.

Doval said: “However, the extent of the inaccurate facts is littered in the article. Facts put out of proportion and out of context giving an entirely different picture of how the GNY Asia fund was actually working. From numerous business perspectives it gives an impression to investors and prospective investors that GNY Asia fund was running an unprofessional business to say the least and perhaps an illicit business in actuality.”

Chauhan seem unfazed and said: “It is wrong to suggest that the aforesaid volunteered statements are baseless, vague and ambiguous.”

Doval’s counsel tried to introduce some humour and asked Chauhan “How many questions are left?” in a joking manner.

“Would it be correct to say that nowhere in the article had been stated that GNY Asia fund had a FDI license in India?”

Doval replied: “As stated before, a number of unrelated facts were pieced together to give an impression that something scandalous and big in magnitude was happening. The massive surge in FDI was an unrelated fact to the operations of the GNY Asia fund. However, for an average reader, the distinction between the two was blurred and an impression was given as if the massive surge on FDI came via the GNY Asia fund. He added: “So, the answer is explicitly not so stated, but it was implicit in the article.”

“Would it be correct to say that in 2018, GNY Asia fund was making huge losses up to 20 per cent in share markets?”
“It would be fair to say that the GNY Asia fund was suffering and its losses were in the magnitude of 18-20 per cent.”

At this point, ACMM Samar Vishal asked Chauan: “Will you conclude today?” Chauhan replied in the negative and said that he would need at least another three hours.

ACMM Samar Vishal said that it would be better to adjourn for the day.

The cross-examination will continue on September 3 and 4. 

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