Varanium Cloud's major client shares address with firms named in Panama Papers

The ledger entries on transactions with Amtefone showed that sales entries were recorded every month but no bank receipt entries were added in FY23.

A large part of Varanium Cloud's sales came from Amtelfone, a company which is registered at an address shared by companies named in the Panama Papers.

Panama Papers were leaked papers that carried information on tax havens and people who used off-shore entities to hide their wealth.

On May 10, the Securities and Exchange Board of India (Sebi) banned the company and its promoter and managing director Harshawardhan Hanmant Sabale from the securities market, and banned Sabale from holding board position in a listed company.

The regulator has been investigating the company for misutilising its initial-public offer (IPO) proceeds and misstating its financial statements, to help the promoter offload his shares.

Also read: Varanium and its promoter-MD banned from securities market, allegedly cooked books to offload shares

During the investigation, the investigating officials found that a large part of the company's sales in FY23 and the first half of FY24 was made to a company named Amtelfone, which had no online presence except for its curious address.

Data available on public domain showed that Amtelfone’s address to be Suite 9, Ansuya Estate, Revolution Avenue, Victoria, Mahe, Republic of Seychelles. This was an address that was shared by many companies named in the Panama Papers.

Sebi's interim order stated: "Other than the above, no information about Amtelfone was found in public domain. Even as per OpenCorporates, no company named ‘Amtelfone Incorporated’ was found by NSE."

In FY23, 83.91 percent of Varanium's sales valued at Rs 326.22 crores was made to a company named Amtelfone. In the first half of FY24, 71.44 percent of Varanium's sales valued at Rs 268.1 crore was made to the same company.

As per Varanium’s reply to the National Stock Exchange (NSE), services provided to Amtelfone (a Distributor of VoIP Services for the Middle Ease and North Africa or MENA region) was VoIP services on a wholesale SoftwareAs-A-Service (SaaS) basis.

Since there was little information available on Amtelfone, the NSE asked the company for invoices and agreements signed with the client company. In response, Varanium submitted that all the documents and data files were with central goods and services tax (CGST) department due to an ongoing CGST audit and that it would provide the full set of documents once received back from the GST authorities.

Also read: Bombay High Court orders arrest of Varanium Cloud promoter Sabale; stock hits 5% lower circuit

The ledger entries on transactions with Amtefone showed that sales entries were recorded every month but no bank receipt entries were added in FY23. Instead, there were only adjusting journal entries against Secur Credentials Ltd and Amazon Web Services.

The offials also noted a mismatch in trade receivables entries.