 "Panama Papers: Govt forms multi-agency team to probe secret offshore dealings")
More than 500 Indians paid Mossack Fonseca, a law firm headquartered in tax haven Panama known for creating offshore companies for the global rich, to set up offshore entities in tax havens, revealed a huge leak of confidential documents - already famous as Panama Papers.
The leak of 11.5 million tax documents has exposed the secret offshore dealings of around 140 political figures globally, including aides to Russian President Vladimir Putin, several top businessmen and celebrities like football star Lionel Messi.
Hours after names of some famous Indians from the worlds of business, politics and cinema were published by The Indian Express, the only Indian newspaper that's a part of an international media consortium which had access to the leaked documents, Finance Minister Arun Jaitley said the government would take strict action against "unlawful" accounts held abroad by Indians.
In a swift response, the government on Monday formed a multi-agency group to investigate every Indian individual or company named in the Panama Papers. The global list of individuals is so long that it would take three-four weeks to be published by the International Consortium of Investigative Journalists (ICIJ). The vast stash of records, covering around 40 years, was obtained from an anonymous source by German daily Sueddeutsche Zeitung and shared with media worldwide by the ICIJ.
Jaitley told reporters that Prime Minister Narendra Modi discussed the issue with him soon after the global expose and, on his direction, a special group comprising agencies like Central Board of Direct Taxes (CBDT), Reserve Bank of India (RBI) and Financial Intelligence Unit (FIU) was set up. The Special Investigation Team (SIT) on black money will also probe the matter.
"They (multiple agencies) will continuously monitor these (accounts) and whichever accounts are found to be unlawful, strict action as per existing laws will be taken," Jaitley said.
Jaitley said more names may come out in the next few days. "I welcome this investigation. I think it is a healthy step that these kind of expose are being made. I have been repeatedly saying that the world is now going to increasingly become more transparent, countries are cooperating with each other and slowly all this information is going to come out as a result of various global initiatives which have been launched," he said.
"The first (such leak) related to Liechtenstein accounts against all persons involved in that prosecutions have already been launched… Assessment orders have been passed. Then details came in 2011 with regard to HSBC account holders. 569 out of those account holders have been traced. 390 were illegal and already 154 set of prosecutions have been filed," said Jaitley.
He said detailed assessment orders have led to the discovery of illegal assets worth around Rs 6,500 crore. "The prosecutions are taking their normal course and assessment proceedings and their consequential actions are on," he said.
In 2013, the ICIJ had published a list of 700 persons. It was analysed and "434 Indian entities have been traced. 184 out of them admitted their relationship with the accounts and the process of passing assessment and prosecuting them is now on. Already 52 prosecutions have been filed by Income Tax authorities," Jaitley said.
Some of the entities named in the list are already being investigated by Enforcement Directorate and I-T Department.
A senior government source official said the British Virgin Islands will be the focus of any investigation from an Indian perspective and that the laws applicable in case charges are brought on would be the anti-black money law and the Prevention of Corruption Act.
SIT Chairman Justice (retd) M B Shah said, "Investigations are being carried out. We are going to investigate it (the list) thoroughly."
The Vice-Chairman of the panel, Justice (retd) Arijit Pasayat said, agencies like the ED, I-T Department and the Directorate of Revenue Intelligence have been asked to make an assessment of the list and prepare a report.
"We want to know what is the truth behind these. The SIT did not have these reports. May be, the investigative agencies had. So, once they submit a report to us then we can take the required action," Pasayat said.
Reacting to the report, Indiabulls' Sameer Gehlaut, whose name appeared in the list, said all his overseas investments were made after "paying full taxes in India, each and every overseas remittance is disclosed to RBI as and when it has been made".
Earlier in the day, speaking at the annual session of industry body CII, Jaitley had said that those who did not take advantage of the compliance window on black money last year to declare illegal assets stashed abroad will find "such adventurism extremely costly".
The minister said global initiatives to deal with the menace of unaccounted wealth abroad will be in place by 2017, and then it would become extremely difficult for individuals to hide assets. "With G20 initiatives, FATCA and bilateral transactions in place with effect from 2017, the world is going to be a far more transparent institution and therefore, this kind of an adventurism will prove to be extremely costly for those who have indulged in it."
What are Panama Papers
ARE ALL BEING NAMED CORRUPT?
Having an offshore account is not illegal per se. Some rich people use such structures for inheritance and estate planning. However, often anonymous structures are used by the corrupt and the criminals for money laundering
RULES ON OVERSEAS REMITTANCE
Till 2003: Foreign fund remittance required RBI's permission
2004: RBI introduces Liberalised Remittance Scheme (LRS), allowing resident Indians to remit funds up to Rs $25,000 a year
2010: RBI clarifies that LRS cannot be used to float companies abroad
2013: RBI allows individuals to set up companies abroad or invest in joint ventures under the Overseas Direct Investment window
Present: Foreign remittance limit under LRS stands at $250,000 a year
COMPANIES DENY VIOLATING LAWS
After being named in Panama Papers, promoters of DLF, Apollo Tyres and IndiaBulls on Monday denied violating any India law. DLF CEO Rajeev Talwar said, "…all remittances were made after the government introduced the LRS Scheme in 2004." Apollo Group spokesperson said, "Any investment abroad, that the Kanwar (Onkar Kanwar) family may have, is in due compliance with the Indian laws…" Indiabulls' Sameer Gehlaut said all his foreign investments were made after "paying full taxes in India".
The leak of 11.5 million tax documents has exposed the secret offshore dealings of around 140 political figures globally, including aides to Russian President Vladimir Putin, several top businessmen and celebrities like football star Lionel Messi.
Hours after names of some famous Indians from the worlds of business, politics and cinema were published by The Indian Express, the only Indian newspaper that's a part of an international media consortium which had access to the leaked documents, Finance Minister Arun Jaitley said the government would take strict action against "unlawful" accounts held abroad by Indians.
In a swift response, the government on Monday formed a multi-agency group to investigate every Indian individual or company named in the Panama Papers. The global list of individuals is so long that it would take three-four weeks to be published by the International Consortium of Investigative Journalists (ICIJ). The vast stash of records, covering around 40 years, was obtained from an anonymous source by German daily Sueddeutsche Zeitung and shared with media worldwide by the ICIJ.
Jaitley told reporters that Prime Minister Narendra Modi discussed the issue with him soon after the global expose and, on his direction, a special group comprising agencies like Central Board of Direct Taxes (CBDT), Reserve Bank of India (RBI) and Financial Intelligence Unit (FIU) was set up. The Special Investigation Team (SIT) on black money will also probe the matter.
ALSO READ: Huge outward remittances a recent phenomenon
"They (multiple agencies) will continuously monitor these (accounts) and whichever accounts are found to be unlawful, strict action as per existing laws will be taken," Jaitley said.
Jaitley said more names may come out in the next few days. "I welcome this investigation. I think it is a healthy step that these kind of expose are being made. I have been repeatedly saying that the world is now going to increasingly become more transparent, countries are cooperating with each other and slowly all this information is going to come out as a result of various global initiatives which have been launched," he said.
"The first (such leak) related to Liechtenstein accounts against all persons involved in that prosecutions have already been launched… Assessment orders have been passed. Then details came in 2011 with regard to HSBC account holders. 569 out of those account holders have been traced. 390 were illegal and already 154 set of prosecutions have been filed," said Jaitley.
He said detailed assessment orders have led to the discovery of illegal assets worth around Rs 6,500 crore. "The prosecutions are taking their normal course and assessment proceedings and their consequential actions are on," he said.
In 2013, the ICIJ had published a list of 700 persons. It was analysed and "434 Indian entities have been traced. 184 out of them admitted their relationship with the accounts and the process of passing assessment and prosecuting them is now on. Already 52 prosecutions have been filed by Income Tax authorities," Jaitley said.
Some of the entities named in the list are already being investigated by Enforcement Directorate and I-T Department.
A senior government source official said the British Virgin Islands will be the focus of any investigation from an Indian perspective and that the laws applicable in case charges are brought on would be the anti-black money law and the Prevention of Corruption Act.
SIT Chairman Justice (retd) M B Shah said, "Investigations are being carried out. We are going to investigate it (the list) thoroughly."
The Vice-Chairman of the panel, Justice (retd) Arijit Pasayat said, agencies like the ED, I-T Department and the Directorate of Revenue Intelligence have been asked to make an assessment of the list and prepare a report.
"We want to know what is the truth behind these. The SIT did not have these reports. May be, the investigative agencies had. So, once they submit a report to us then we can take the required action," Pasayat said.
Reacting to the report, Indiabulls' Sameer Gehlaut, whose name appeared in the list, said all his overseas investments were made after "paying full taxes in India, each and every overseas remittance is disclosed to RBI as and when it has been made".
Earlier in the day, speaking at the annual session of industry body CII, Jaitley had said that those who did not take advantage of the compliance window on black money last year to declare illegal assets stashed abroad will find "such adventurism extremely costly".
The minister said global initiatives to deal with the menace of unaccounted wealth abroad will be in place by 2017, and then it would become extremely difficult for individuals to hide assets. "With G20 initiatives, FATCA and bilateral transactions in place with effect from 2017, the world is going to be a far more transparent institution and therefore, this kind of an adventurism will prove to be extremely costly for those who have indulged in it."
What are Panama Papers
- A leak of 11.5 million files from Mossack Fonseca, world's fourth biggest offshore law firm
- Shows that secretive offshore tax regimes are being exploited by the rich and powerful
- The International Consortium of Investigative Journalists (ICIJ) has released some names. Full list will be published over the next month
ARE ALL BEING NAMED CORRUPT?
Having an offshore account is not illegal per se. Some rich people use such structures for inheritance and estate planning. However, often anonymous structures are used by the corrupt and the criminals for money laundering
RULES ON OVERSEAS REMITTANCE
Till 2003: Foreign fund remittance required RBI's permission
2004: RBI introduces Liberalised Remittance Scheme (LRS), allowing resident Indians to remit funds up to Rs $25,000 a year
2010: RBI clarifies that LRS cannot be used to float companies abroad
2013: RBI allows individuals to set up companies abroad or invest in joint ventures under the Overseas Direct Investment window
Present: Foreign remittance limit under LRS stands at $250,000 a year
COMPANIES DENY VIOLATING LAWS
After being named in Panama Papers, promoters of DLF, Apollo Tyres and IndiaBulls on Monday denied violating any India law. DLF CEO Rajeev Talwar said, "…all remittances were made after the government introduced the LRS Scheme in 2004." Apollo Group spokesperson said, "Any investment abroad, that the Kanwar (Onkar Kanwar) family may have, is in due compliance with the Indian laws…" Indiabulls' Sameer Gehlaut said all his foreign investments were made after "paying full taxes in India".