A problem of plenty

The secrets spilling out of the more-than-13-million so-called Paradise Papers recall the late CEO of a major newspaper, who regaled anyone he could buttonhole with stories about the number of times he had seen the owner of a rival chain in the Zurich street where many offshore banks hang out. “I go there only because my favourite chocolate shop is nearby,” he once added hastily as he caught the suspicious gleam in a listener’s eye.

Groaning under the burden of his virtues, the newspaper over whose fortunes he presided lingers on today like the Cheshire Cat’s disembodied grin. Given the CEO’s familiarity with Zurich, Narendra Modi’s dramatic demonetisation didn’t touch him. In any case, Modi’s coup didn’t affect billionaires; it only cleaned out modest traders, who needed small sums in cash. 

What we don’t know yet is if his name figures in the Paradise Papers. Those who knew the CEO reckon he, too, might have chosen to be struck dumb like a prominent Bharatiya Janata Party dignitary if it does. An additional reason for him would be to claim to be a true Gandhian and scribble notes as the Mahatma did to outwit Mountbatten, who chose to pay his first call on Bapu on one of those famous days of silence to avoid — as he hoped — being asked embarrassing questions. 

Notes would also have enabled the CEO to preen himself on being in the august company of personalities like Donald Trump’s movers and shakers, Vladimir Putin’s son-in-law, the US commerce secretary, Wilbur Ross, Canada’s personable young premier, Justin Trudeau, and the Tory party financier, Lord Ashcroft, to say nothing of Her Majesty Queen Elizabeth II in the capacity of “Duke of Lancaster”. That is how we toasted her on formal occasions at the University of Manchester. No doubt the CEO would explain that one after another, these celebrities approached him as he innocently guzzled chocolates in Paradise.

The Paradise Papers also mention “the billions in tax refunds by the Isle of Man and Malta to the owners of private jets and luxury yachts”. Whether or not the CEO was among the global glitterati swanning around in private jets and luxury yachts, Pranab Mukherjee says Swraj Paul used no fewer than 13 companies “registered in the tax haven, the Isle of Man” to beat the one per cent of equity limit on buying Indian corporate shares. There are no prizes for guessing who Mukherjee meant when he also told Parliament of a non-resident Indian routing nearly Rs 220 billion through Manx companies with fanciful names like Crocodile, Lotus and Fiasco to invest in Reliance.

Being surrounded by water, the Isle of Man can properly be called an offshore tax haven. Bestowing that status on Zurich recalls the old tale of an Italian delegate at an international conference objecting to landlocked Switzerland sending an admiral. “I am not saying anything about Italy claiming to be represented by a finance minister,” retorted the Swiss.

Perhaps the comparison isn’t quite apposite, for Switzerland does seem to have invented banking secrecy as long ago as 1713 when the Great Council of Geneva forbade bankers to disclose information about their clients. Secretive Swiss banking really took off in the 1920s as many European nations hiked taxes to repay World War I debts and many rich Europeans looked for ways to hide their money. Spotting a means of boosting revenue, the canny Swiss made it a criminal offence for bankers to reveal financial information. When German Jews discovered their money was safer in Switzerland than in Germany, Swiss bankers also discovered doing business with the Nazis was as lucrative as doing business with Jews.

The “offshore” euphemism for a tax haven must have emerged as, gradually, Jersey, the Isle of Man, Malta and the Caribbean islands took over from Zurich and Geneva. That may have been when the Gnomes of Zurich hit upon the cunning ploy of scattering recherché chocolate shops among offshore banks to provide an alibi for those who ferreted among numbered accounts but didn’t want it known.

Perhaps the CEO really was a chocolate addict. The Aztec emperor Montezuma drank 50 goblets of chocolate a day to enhance his sexual prowess so that when the Spanish Conquistadors introduced chocolate to Europe, it was quickly accepted as an aphrodisiac and became the ideal gift for a woman from an admirer. 

The alternative reminds us India is a notoriously poor country with notoriously rich people who can’t afford to let on they are rich.