A few years ago, Pakistani billionaire and real estate developer Malik Riaz Hussain and his son Ahmed Ali Riaz found themselves being probed by the UK’s National Crime Agency (NCA). The allegation: they used dodgy funds to make investments in the UK. The investigation led to an account freezing order (AFO) which the NCA got from a court in December 2018 in respect to the bank account of a British Virgin Island registered company.
Hussain and his family own and manage Bahria Town Ltd, the company known to be the largest property developer in Asia. In Pakistan, they have developed a multitude of mega townships in the major cities which cater to thousands of families. But such mass-scale property development, especially in densely populated cities of South Asia, can hardly keep away from controversies and improprieties. Allegations of kickbacks, corruption, money laundering, fake bank accounts, and much more found their way to the Supreme Court of Pakistan.
And how could the owners of Bahria Town, which boasts of replicating world-famous buildings and monuments like the Eiffel Tower, Trafalgar Square, and Burj Khalifa in their townships, themselves not own a mansion in London. Unsurprisingly, the family also came under the scanner of the NCA by virtue of the legal proceedings in Pakistan and their larger-than-life presence in London. The Supreme Court of Pakistan’s judgment in May 2018 and March 2019 stopped short of a criminal conviction, but imposed a fine of Pakistani rupees 460 billion.
After almost a year of investigations by the NCA, which had secured nine freezing orders covering £140 million in bank accounts belonging to the family, Hussain offered to pay £190 million as settlement to end the investigation into dirty money. On top of the already frozen £140 million cash, a £50 million mansion overlooking Hyde Park, bought in 2016 from the son of former Pakistani Prime Minister Nawaz Sharif, was also offered to the NCA.
On December 3, 2019, the NCA asserted that the settlement was not in any way tantamount to Hussain or his family members being found guilty. That perhaps made it worth losing the seven-storey, 10-bedroom mansion which had a cinema, swimming pool, gym and spa and the swagger that came with its ownership. But little did Hussain and his son know that the UK home office had perhaps already put into place a process that would make the real Trafalgar Square a mirage for them.
A week after the settlement with the NCA, the home office cancelled the 10-year multi-entry visit visas issued to Hussain (valid till 28 July 2021) and Riaz (valid till 18 May 2021) on 10 December 2019. Notwithstanding the settlement with the NCA, the letter from the home office to them said: “…whilst there has not been a criminal conviction against you, I am satisfied that you have been involved with corruption and financial/commercial misconduct… I believe that your exclusion from the UK is conducive to the public good due to your conduct, character and associations.” This was perhaps worse than being made to face criminal charges, as that would have meant a near certain revocation of visas. But having visas cancelled without a criminal conviction makes them look like poster boys for corruption.
The visa saga would have been under wrap had it not been for the appeal which Hussain and his son filed in the high court. Just a few days ago, a three-judge bench turned down their appeal against the home office’s decision revoking their visit visas. The judgment closed all options for them, but opened up Pandora’s box that not just exposed certain details that the wealthy real estate developers might have preferred to have kept under wraps, but also threw a spotlight on this almost-invisible power of the home office in keeping corruption under check.
The action by the home office has taken some activists by surprise who hope that the measure against Hussain will serve as a warning for those using the UK to splurge their ill-gotten wealth. Susan Hawley, Executive Director, Spotlight on Corruption, an anti-corruption charity based in the UK, said: “The revoking of the UK visas of notorious Pakistani businessman Malik Riaz and his son is a welcome new shift in UK Home Office policy to use public interest arguments more rigorously as a grounds for excluding corrupt actors from the UK. This judgment is likely to encourage the Home Office to pursue more cases like this across all different visa types.”
But what if instead of visit visas they had investor visas? Would the home office have been equally swift in cancelling that? Hawley offers some interesting statistics. “There is very little transparency about how often and when this power (to cancel/revoke visas) is used, and caseworkers tasked with taking these decisions have precious little proper guidance. We do know that overall the rate of refusal for investor visas is very low indeed – just 8 percent between 2009-2019.”
While both Vijay Mallya and Nirav Modi are being pursued by India, it is not difficult to assess that Mallya’s case is qualitatively different compared to Modi, which is arguably a much clearer case of fraud. And if the fate of Jet Airways and the inherent structural challenges present in India’s aviation sector are considered, it can be argued that the UK Home Office would have been on a sticky wicket cancelling Mallya’s settled status (formally known as Indefinite Leave to Remain - ILR - and distinct from a visit visa) which he holds since 1992.
Hasil Makkar, an immigration solicitor, said between visit visas and ILRs, the former is comparatively easier to revoke. The most common reasons for the revocation of UK visas are deception or criminal conviction.
To put it on record, India had initially requested the deportation of Mallya, which the UK had refused saying that he had a valid visa, on which he had entered the UK in March 2016, even though he did not have a valid passport anymore. New Delhi had cancelled Mallya’s passport within days of his leaving India.
That brings us to Nirav Modi, whose extradition appeal comes up in the high court in London this week. It is clear that Modi could make a base in the UK on the strength of the Tier 1 investor visa, which he obtained in 2018. Since the launch of the Investor Visa in 2008, 254 Indian millionaires have used it to settle down in the UK till 2020, as per a report aptly titled "Red Carpet for Dirty Money" by Spotlight on Corruption.
More than 11,000 people from outside the EU have made use of the Investor Visa to gain access to the UK. A minimum investment of £2 million (Rs 20 crore) is required to get the “golden visa”, which puts you on the path to gain British citizenship after five years; if the investment is increased, it can be much quicker. In December 2018, the home office announced that the investor visa would be temporarily suspended, but within days withdrew that announcement. The turnaround happened, it was widely believed, as it was too lucrative to its economy and the powerful ecosystem that espoused it.
By its own admission, 50 percent of the total golden visas issued are being reviewed by the home office for potential national security risks. The home office has also admitted that between 2008 and 2015, investor visas were issued with much less due diligence. Some changes to the investor visa regime were introduced in 2015 and 2019, but activists have repeatedly criticised the failure to publish findings of the review carried out by the home office. The home office maintains that the findings will be brought out in due course.
But it was by virtue of the investor visa that Nirav Modi could live openly in London, and establish businesses, before he was arrested in March 2019, based on India’s request to have him extradited. Once during our conversation, Mick Brown, the Telegraph journalist who famously tailed Nirav Modi on the streets of London, reminded me of Somerset Maugham’s famous quote about the French Riviera applying it to Britain - a sunny place for shady people. Revoking investor visas obtained with ill-gotten money seems to be a far cry, the UK home office is reluctant to share its own review announced close to four years ago.
Interestingly, Nirav Modi’s attempt to gain citizenship of Malta in 2017 did not succeed because Henley & Partners, the London-based citizenship advisory firm that helped process the applications, chucked out Modi’s. It was turned down because the firm feared it had the potential to attract unwanted bad publicity. And as we know Modi fell back on the UK investor visa.
“The UK is a world leader in the fight against financial crime and corruption. We work closely with partner agencies and regulators and continue to monitor all immigration routes to ensure they operate appropriately, and visas can be cancelled if an individual is deemed not conducive to the public good,” a UK home office spokesperson told me.
If that was done in the case of Nirav Modi, India may not have been liaising with the Crown Prosecution Service (CPS) on how facilities in Mumbai’s Arthur Road jail would not breach his human rights – the issue on which he convinced the court to hear his appeal. Instead, he might have been facing trial in India already. Going by the developments in Vijay Mallya’s case, questions remain if and not just when Nirav Modi would return to India to face the law.
Read more: Explained | What is the UK's Sole Representative Visa scheme?
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