There are countries where tax laws and corporate laws for international companies are deliberately kept lax to attract black money of individuals, companies and investment funds. These individuals, companies and investment funds register companies in such countries and then use these new companies to invest in their home markets or across global markets.
Mauritius is one such notorious country. Many companies and investment funds that are registered are investing in listed and unlisted companies in India.
I did some number crunching on quarterly 'greater-than-one-percent' shareholders' data of listed companies in India. I looked for shareholder names that had the word 'Mauritius'. The data analysis revealed that these Mauritius-based companies and funds have increased their dominance in listed companies in India.
Here is a summary of my analysis:
1) As on 31 December 2006 there were 470 Mauritius-based shareholders that held greater than one per cent stake in a listed Indian company across 311 companies. On that date, the aggregate market capitalisation of these 311 companies was Rs 12,34,275 crore and the aggregate market value of the holdings of the 470 Mauritius-based shareholders in these companies was Rs 59,872 crore, or 4.85 per cent.
2) As on 31 December 2007 there were 749 Mauritius-based shareholders that held greater than one per cent stake in a listed Indian company across 410 companies. On that date, the aggregate market capitalisation of these 410 companies was Rs 26,31,094 crore and the aggregate market value of the holdings of the 749 Mauritius-based shareholders in these companies was Rs 1,53,951 crore, or 5.85 per cent.
3) As on 31 December 2008 there were 643 Mauritius-based shareholders that held greater than one per cent stake in a listed Indian company across 375 companies. On that date, the aggregate market capitalisation of these 375 companies was Rs 7,11,956 crore and the aggregate market value of the holdings of the 643 Mauritius-based shareholders in these companies was Rs 45,594 crore, or 6.40 per cent.
4) As on 31 March 2009 there were 599 Mauritius-based shareholders that held greater than one per cent stake in a listed Indian company across 355 companies. On that date, the aggregate market capitalisation of these 355 companies was Rs 6,22,461 crore and the aggregate market value of the holdings of the 599 Mauritius-based shareholders in these companies was Rs 44,876 crore, or 7.20 per cent.
Notice the rise of the per cent figures -- from 4.85% in December 2006 to 5.85% in December 2007 to 6.40% in December 2008 to 7.20% in March 2009. Black money rules the corporate world!
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