Major Tory donor investigated over fraud and money laundering

By Al Mayadeen English
Source: News websites
21 May 2023 16:20

A prominent Tory contributor who has given the party more than £220,000 is being looked into on suspicion of fraud and money laundering.

Major Tory donor, Karan Chanana, at a press conference for Amira in Dubai. February 26, 2013. (Social Media)

A major Tory contributor who has given the party more than £220,000 is being investigated on suspicion of fraud and money laundering.

The CEO of the global rice brand Amira, Karan Chanana, is being probed in India on suspicion of illegally diverting tens of millions of pounds in bank loans through shell businesses. Chanana has yet to reply to the allegations.

The charges come as the UK government faces increasing pressure to tighten foreign donation restrictions and strengthen due diligence inspections. The Conservatives are under pressure this weekend to suspend the money given by Chanana pending an investigation.

The enforcement directorate in India, which is part of the finance ministry, claimed on May 2 that it conducted searches at 21 addresses in India linked to Chanana, the Indian company Amira Pure Foods, and other parties.

According to the directorate, about £100,000 in Indian currency was seized during the searches, which were carried out by India's Prevention of Money Laundering Act. Till now, no charges have been brought against him.

The enforcement directorate said in a statement that "investigations revealed that the accused entities, in connivance with each other, as well as other related/unrelated entities, have illegally diverted loan funds sanctioned by the consortium of banks by way of transferring loan funds into the accounts of various shell entities under the guise of genuine business transactions."

“It was also known that Karan A Chanana had donated to a political party of [the] United Kingdom since 2019 … while the accused entity had itself defaulted on repayment loans.”

Chanana, 50, has been credited with transforming a family business into a global conglomerate. In October 2012, his company Amira Nature Foods was launched on the New York Stock Exchange, specializing in Indian basmati rice farmed in the Himalayan foothills.

Its chairman and CEO, Chanana, ran the corporation from its headquarters in Dubai's 35-story Gold Tower, while its legal company registration was in the British Virgin Islands. According to corporate papers, its subsidiaries included Amira Pure Foods in India, which is presently under investigation, and Amira G Foods in the United Kingdom.

Between September 2019 and December 2021, Amira G Foods, managed by Chanana, gave £222,104 to the Conservative Party. The current filings for the UK company indicate net liabilities of £5.96m, with financial support provided by its parent company in the British Virgin Islands.

Amira Nature Foods was delisted from the New York Stock Exchange in August 2020 after failing to meet financial reporting deadlines.

In November 2020, a consortium of banks led by India's Canara Bank filed an informal complaint with India's Central Bureau of Investigation alleging bank fraud.

It accused Amira Pure Foods, Chanana, and his colleague's directors of "wrongfully and dishonestly" moving loans into "paper companies" between 2009 and 2018, resulting in more than £116 million in unjust bank losses. Amira Pure Foods is currently in liquidation in India.

According to the enforcement directorate, the investigation was launched based on the information report filed by the banks. It claims it is conducting additional investigations and did not reply to a request for comment last week.

Labour MP and chair of the all-party group on anti-corruption and responsible taxation, Margaret Hodge, said the Conservative Party should now determine the source of Amira's donations and hold the monies until the investigations are concluded.