{"id":34797,"title":"Aviva Accused of Tax Evasion and Regulatory Breaches in India","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2024-09-03T04:17:33+00:00","modified":"2024-09-03T04:17:33+00:00","canonical_url":"https://stockmark.it/aviva-accused-of-tax-evasion-and-regulatory-breaches-in-india/","markdown_url":"https://stockmark.it/aviva-accused-of-tax-evasion-and-regulatory-breaches-in-india.md","json_url":"https://stockmark.it/aviva-accused-of-tax-evasion-and-regulatory-breaches-in-india.json","category":"Financial","categories":["Financial","Insurance industry","Tax"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/stencil.default-2024-09-03T051720.036.jpg?fit=1200%2C800&quality=89&ssl=1","format":"news","language":"en-GB","content":"Aviva, the FTSE 100 insurance giant, faces serious allegations of tax evasion and regulatory violations in India, according to a report by the country’s tax authority. The Directorate General of Goods and Service Tax Intelligence claims that Aviva’s Indian branch used fake invoices and covert cash payments to conceal $26 million in commissions paid to sales agents, thereby circumventing tax and conduct rules.\n\nThe unpublished allegations suggest that Aviva employed these tactics to incorrectly claim tax credits and evade $5.2 million in taxes. The tax investigators’ notice states, “Aviva and its officials have indulged in a deep-rooted conspiracy and used the modus of fake invoices (without receipt of services) to pass on certain money to … insurance distributors of Aviva.” This case is part of a broader investigation into more than a dozen Indian insurers, with alleged evasion totalling $610 million in unpaid taxes, interest, and penalties.\n\nThe alleged abuses occurred between 2017 and 2023, encompassing a period when Aviva increased its stake in the Indian joint venture from 49% to 74% in September 2022. The tax authority’s 205-page report includes damning evidence such as screenshots of emails and WhatsApp messages between Aviva executives and insurance distributors, discussing methods to circumvent compensation regulations that cap commission payments.\n\nInterviews with executives, including Sonali Athalye, Aviva India’s chief financial officer, reportedly detail how these payments were made. Aviva, which prides itself on being “absolutely committed to being an ethical and responsible business,” responded to the allegations by stating, “This is an industry-wide issue which represents a small potential tax claim for our Indian joint venture which is actively engaging with the relevant authorities in India. There has been no adverse ruling or penalty against Aviva.” The insurer is expected to challenge these findings.\n\nHowever, the involvement of senior management, including former Aviva India CEO Trevor Bull, who was copied on a 2019 email discussing payments over regulatory limits, raises questions about the extent of knowledge within the company’s upper echelons. This scandal poses a significant reputational risk for Aviva, one of Britain’s largest insurers and investors, with 18.7 million customers across its key markets in the UK, Ireland, and Canada. As the investigation unfolds, it remains to be seen how this will impact Aviva’s operations in India and its standing in the global insurance market."}