India's fight against suspected black money stashed in Swiss banks has reached a village lane in Andheri area of Mumbai, where an obscure-sounding company, Motech Software Pvt Ltd, was set up nearly two decades ago that allegedly went on to deposit millions of dollars in Switzerland through a maze of offshore entities.
Indian tax authorities have sought the Swiss government's assistance in its probe against this company, after which Switzerland's Federal Tax Administration (FTA) has issued a notice to the firm asking it to nominate a person for exercising their right to be heard.
In the notice dated September 24, published in Switzerland's latest federal gazette in Berne, Motech Software has been asked to give details of the nominated person within 10 days for exercising its right to appeal against sharing of information with the Indian tax authorities.
While publicly available official documents do not reveal much about this company's ownership and business dealings, its name figured in the leaked 'HSBC List' as the largest Indian account holder with nearly USD 500 million in a Geneva branch of the global banking giant and reports as well as some regulatory orders have suggested this company was originally set up by entities linked to one of the largest Indian conglomerates that later snapped all its ties.
Interestingly, a website address mentioned in the past job postings by this company, which claimed to be a global technology consultancy firm, now hosts pornographic material and the listed phone numbers and emails do not appear to be functional.
The Registrar of Companies records show the company's status as "active", a paid up capital of Rs 5 crore and the last Annual General Meeting date of December 30, 2011. It mentions the registered address as Mogra village lane in Andheri (East) area of the country's financial capital.
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The company came under the scanner after details about the Indian names on the 'HSBC List' reached India under a bilateral agreement between Indian and French governments.
Subsequently, Indian authorities sought details from Switzerland and now it has reached the final stage of the information sharing between the two countries.
A similar notice, also dated September 24, has been issued to Monaco-registered Infrastructure Company Ltd, which is also said to be linked to Motech Software.
The Indian tax department and other agencies have already acted against a large number of entities named in the 'HSBC List' and have also got details about many of them from the Swiss authorities. Similar requests have been made to several other countries also, including from some jurisdictions perceived to be offshore tax havens.
With effect from this month, an automatic information exchange mechanism is also coming into force between India and Switzerland under which the Indian tax authorities will have access to all details about Swiss bank accounts of Indians, including those closed during 2018.
The data can be quite useful for establishing a strong prosecution case against those who had any unaccounted wealth in those accounts, as it provides entire details of deposits and transfers as well as of all earnings including through investments in securities and other asset classes.
However, the details received by India would be governed by confidentiality provisions.
Besides the automatic exchange, there are at least 100 cases of older accounts held by Indians, which might have been closed before 2018, for which Switzerland is sharing details with India under an earlier framework of mutual administrative assistance as Indian authorities had provided prima facie evidence of tax-related wrongdoings by those account holders.
A Swiss delegation was in India late last month before the first set of details could get shared under the new automatic information exchange, while the two sides also discussed possible steps to expedite execution of tax information sharing requests made by India in specific cases and enhancing of collaboration in offshore tax compliance matters.
The Automatic Exchange of Information (AEOI) is being seen as a major boost in India's fight against suspected black money stashed abroad.