Below the radar: How an Indian tycoon’s petrochemicals empire quietly dodged Iran sanctions

Indian tycoon Yogesh Mehta is not shy about his success. In dozens of interviews, YouTube videos, and Twitter posts, he recounts how his hard work and ingenuity made his Dubai-based business, Petrochem, the number one chemical distributor in the Middle East and Africa.

But throughout the many accounts of his rise, Mehta has omitted one element of his business’s operations: A hidden trade in sanctioned Iranian petrochemicals.

The United States has applied various sanctions against Tehran since 1979, most recently to try to prevent the country from developing nuclear weapons. The European Union has similar sanctions in place.

In search of hard currency, Iran has consistently sought to evade these restrictions. It has found the most success exporting petrochemicals, which are much harder to trace than oil shipments. Its exports of petrochemicals and petroleum products to China, India, and other markets reportedly brought in some US$20 billion in 2020, twice the amount it earned from crude oil.

Now, an OCCRP investigation — based on shipping documents, Indian court files, an analysis of ship-tracking data, and interviews with industry executives who have done business with Petrochem and its proxy companies — has uncovered evidence that Mehta’s conglomerate participated in this booming trade, and that false paperwork was used to conceal its role.

Neither India nor the United Arab Emirates ban trade with Iran, meaning that Mehta’s dealings do not violate sanctions in either of the countries where his companies are registered. But misdeclaring the origin of cargo violates customs regulations and laws in India, the U.S., the U.K., and other countries

The revelations could also affect the companies’ access to the U.S. banking system and the financial institutions that form the linchpin of international commerce. In December 2020, the U.S. sanctioned four other UAE and China-based companies for supporting the sale of Iranian petrochemicals, which it called “an important revenue source for the Iranian regime, generating wealth for its corrupt leaders and financing a range of nefarious activities.”

Petrochem’s involvement in the trade came to the attention of Indian authorities in January 2020, when Mumbai customs officials, acting on a tip, apprehended a vessel leased by Petrochem Middle East India and other companies linked to Mehta. Documents related to the seizure, which was not reported in Indian or international media, show the ship’s operators had concealed the real origin of its cargo: Iran.

This sensitive part of Mehta’s business has been masked from public view, and from the authorities, by a network of proxy companies, false paperwork, and the disabling of transponders used to track the tankers.

Proxy Companies

OCCRP has found links between Mehta’s Petrochem and four companies that have been used to disguise shipments of Iranian petrochemicals.

Metron Middle East FZE (UAE):

The Indian government in 2017 declared Petrochem and Metron “sister concerns” in findings related to a customs tariff violation case. Corporate records don’t show a formal link between the two companies, but two industry sources who have done business with the companies say they are both overseen by Mehta, working through Nazan Nobakht, director of chartering and logistics at Petrochem Middle East. There are several other links between Petrochem and Metron:

1. Harshadkumar Upadhyay, Metron’s managing director, was the manager for bulk operations of the Dubai branch of Petrochem from 2006 to 2014, when he formed Metron.

2. Metron’s website was registered by Petrochem’s accounts manager. Both companies have offices on different floors of the same building in Dubai.

3. Business information provider Sayari lists several telephone numbers for Metron, including two that are associated with current Petrochem employees. Calls to those numbers, and another listed on Metron’s website, went unanswered.

Kriscon DMCC (UAE): Upadhyay is also the director of Kriscon and holds shares in the company. In addition, a woman listed as a sales manager in a company brochure identifies herself as a current Petrochem employee in her LinkedIn profile.

Asia Bright Inc. Ltd. (Hong Kong): Upadhyay is the director of this company.

Indisol Marketing Private Limited (India): Indisol was founded by Niti Umesh Bhatt, a former director of Petrochem Middle East India, just 14 days after he left Petrochem in July 2018.

The network of proxies has made it almost impossible to determine the full extent of Petrochem’s involvement in Iranian petrochemicals. But the shipment apprehended in Mumbai fits a larger pattern: Ship tracking data shows that two other vessels leased by companies with ties to Mehta’s business empire showed a similar pattern of movements, including disabling their transponders near Iran before turning them back on in international waters.

Neither Mehta, his secretary, nor a Petrochem human resources official responded to multiple calls, letters, emails, or messages through social media accounts requesting comment for this article.

The Good Life

Yogesh Mehta — sometimes known as “Yogi” — presents himself as a modern chief executive, often sporting gray suits and bright ties while serving up inspirational business aphorisms.

“Dreams have to become reality, and the way to make dreams a reality is the endeavor, the enterprise, and the real vision you have,” he said in one interview. “Entrepreneurs are born,” he said in another, “and if you aren’t, then you can never become one.”

Now 62, the Mumbai native often recounts how he came up working at his father’s chemical business after earning a degree in chemistry.

After a series of business failures, he fell into debt and moved to Dubai in 1990 to try for a fresh start. There, he established a small chemical distribution company with another Indian expatriate. In 1995, Mehta broke away and started a new venture, Petrochem.

The business made him a wealthy man. By 2011, Mehta had accumulated nine luxury cars and a summer mansion in London, according to a report that year in Arabian Business. A few years later, he reportedly spent 14 million British pounds (around $21 million at the time) on a three-day celebration for his son’s wedding in Florence, featuring an 1,800-member cast and crew including Indian dancers, Italian sopranos, mimes, and fire throwers.

His family’s villa on Dubai’s “Millionaire's Row” includes a nightclub, and he has reportedly become close with Bollywood celebrities, including superstar actor and producer Amitabh Bachchan. He is also an enthusiastic wine collector.

“Money is a very important grease to the machinery of a good life,” Mehta told Arabian Business. “Without the good life, why are we even living? We might as well be robotic animals.”

His chemical empire continued to grow. In 2018, Mehta’s business partner decided to sell his Petrochem stake, giving Mehta and his son, Rohan, control of the business.

Today, Petrochem claims to be one of the world’s largest chemical traders, and the top chemical distributor in the Middle East and Africa combined, with operations in over 80 countries and offices in the UAE, India, Singapore, Taiwan, and China. The concern reported $1.1 billion in revenues in 2017, and Mehta has said that turnover had reached $1.5 billion in 2019.

The following year, a bust at Mumbai’s port would give the first glimpse into one previously unknown aspect of his business’s operations.

Bust of the Chem Trader

When the Marshall Islands-registered MT Chem Trader docked in Mumbai on January 25, 2020, customs officials were waiting.

According to its official papers, issued by a UAE-based marine service provider called Atlantic Global Shipping, the small tanker had been on a circuitous and counterintuitive journey over the previous seven days.

The bills of lading showed that the ship had carried two petrochemicals — toluene, which is commonly used to make paint, and mixed xylene, an industrial solvent — from the Indian port of Mundra to the Emirati port of Jebel Ali. It had then carried different loads of the same two chemicals back to India, this time to Mumbai.

Apart from the exchange’s circular nature, another aspect should have raised eyebrows: India is highly dependent on toluene imports, meaning that exporting significant volumes to the UAE from there would make little commercial sense.

An industry insider with direct knowledge of Petrochem operations told Mumbai customs officials that the route described in the Chem Trader’s documents was fictitious. He reported that the shipment it had just brought to Mumbai had originated not in Jebel Ali, but in the Iranian port of Bandar-e Imam Khomeini, to be delivered to the UAE, China, and India.

The Mumbai officials seized and offloaded the shipment. According to documents from the bust obtained by OCCRP, the ship’s captain admitted under questioning that the paperwork was false and the chemicals had been loaded in Iran. The captain also said he had been instructed to lie. Seizure documents do not say if he identified who gave him those instructions.

The false documents do indicate who was behind the ship’s journey: They show that one of the fraudulent orders it carried had been commissioned by an Indian branch of Petrochem for delivery to its Emirati branch. Five other companies were also involved as shippers and receivers, at least four of which are Petrochem proxies or associates.

Documents obtained by OCCRP and authenticated by a senior Indian customs official show the ship’s real journey to Iran.

The Iran-issued documents showed that the Chem Trader had picked up its cargo in the Iranian port of Bandar-e Imam Khomeini. Unusually, neither document notes the “consignee” or “notify address” — that is, those who are accepting and receiving the cargo.

Chem Trader was soon released. It was not clear how the case was settled, but a customs official said that similar cases are usually resolved out of court through the payment of a fine. The ship has since been renamed several times and is still sailing.

The seizure of the Chem Trader’s cargo represented just a sliver of Iran’s annual petrochemical exports, but it is the only time Petrochem has been caught moving Iranian goods. It also provided a rare glimpse into how such operations are structured.

A Circular Trade

Satellite tracking data gives more insight into Chem Trader’s movements.

Data obtained from MarineTraffic, a real-time shipping tracker, shows Chem Trader left the Indian port of Mundra on January 7, and then apparently disabled its automatic identification system in the Arabian Sea on the following day.

According to its Iranian documents, the ship loaded a cargo of petrochemicals in Bandar-e Imam Khomeini on January 14. By the time it apparently turned on its tracker the following day, it was approaching the Emirati port of Jebel Ali. Once it arrived, additional documents were issued claiming that it had loaded its cargo there.

Based on the volume of cargo seized by Mumbai authorities, the ship appears in fact to have unloaded part of the Iranian cargo in the UAE, which has a domestic petrochemical market and is also a redistribution hub. It then set sail for Mumbai with its remaining Iranian petrochemicals, where it was apprehended by customs authorities on January 25.

Analysis of ship tracking data from two other vessels hired by the proxy companies linked to Mehta — the MT Patriotic and the MT Taihua Glory — shows that they followed a similar pattern of movements. In both cases, the ships arrived in the UAE before disappearing from AIS screens for multiple days near Iran.

In the case of the Patriotic, the tracking data shows that it was in or around the Emirati ports of Fujairah en route to Al Jubail before disappearing on January 20. It reappeared briefly two days later, displaying what appear to be false coordinates showing it to be near Russia, before vanishing for another 15 hours, reappearing near the UAE, and finally heading to India on January 29.

The Taihua Glory, leased by the Dubai-based Kriscon, showed a similar pattern, departing India on October 9, anchoring in Dubai, and then disappearing for ten days. It reappeared on October 23 near the Gulf of Oman before heading back to India. OCCRP obtained a bill of lading that shows Taihua Glory, like the Chem Trader, was secretly loaded in Iran at the same port as the Chem Trader with roughly 2,000 metric tons of caustic soda on October 21, just two days before it reappeared.

Jim Curtis, a retired U.S. Navy officer with experience in maritime surveillance, told OCCRP the ships’ movements suggested that they were being used to evade sanctions.

“Based on my observations during at-sea operations between 2004 and 2015, the behavior of these ships fits the profile of ships that are purposely busting sanctions in that area and conducting unsanctioned trade,’’ Curtis said in an email.

Irene Kenyon, a former intelligence officer at the U.S. Treasury Department and now director of risk intelligence at the consultancy FiveBy Solutions, agreed that Petrochem appeared to be evading sanctions.

“This does not look great,” she said. “At best, its leadership does not know what its employees are doing and is completely unaware of these violations, and that’s not a great look.”

In March, another piece of news suggested that further scrutiny may be on the way: The Financial Action Task Force, a global financial crime watchdog, said it was adding the UAE to a list of jurisdictions subject to closer monitoring, known as its “grey” list.

Anand Mangnale is with OCCRP and Alina Tsogoeva is with OCCRP ID.

Newslaundry is publishing this report with permission from OCCRP. We have lightly edited it for style.