The government on Thursday said it would conduct a thorough probe into illegal shell companies set up by alleged Indian tax evaders as fresh skeletons tumbled out of the "Panama Papers" cupboard, linking India's glamorous mix of sports and entertainment to offshore tax havens.
Finance Minister Arun Jaitley said every bit of the expose that pointed toward offshore companies set up by more than 500 Indians will be probed and that people with illegal money stashed abroad "won't get to sleep" at night now.
"In last three days we have formed a group. We are analysing each and every account to find out what is legal and what is illegal," Jaitley said in an interview to ETV News Network. He was referring to the probe ordered by Prime Minister Narendra Modi.
"Those who are having legal accounts, they need not worry and those having illegal accounts won't get sleep at night," the finance minister said
"Those people who have kept it illegally, we will try to detect it fully. And I think that soon every thing will be made clear."
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The warning comes as the media around the world has been carrying stories on people with offshore firms. The revelations are part of the expose by the International Consortium of Investigative Journalists (ICIJ) and over 100 global media organisations, dubbed the "Panama Papers". The expose is based on millions of leaked documents of a Panama law firm Mossack Fonseca, which helped in setting up these companies.
But Indian authorities have also said not every off-shore company opened by an Indian need be illegitimate.
In the latest disclosure, the Indian Express, which is one of the reporting partners of the ICIJ, reported that 10 members had entered into a pact to form P-Vision Sports to bid for IPL Pune franchise, in which 15 percent was earmarked for the offshore firm, Obdurate Ltd in British Virgin Islands.
The bidder consortium included actors Saif Ali Khan, Kareena Kapoor and Karisma Kapoor, industrialist Venugupal Dhoot's firms and Pune-based realtors Chordia family. It had investments by an offshore company.
In the interview, the finance minister also sought to clarify what Reserve Bank of India Governor Raghuram Rajan said on the legality of offshore companies opened by Indians.
"So, I think he (Rajan) must have said it in that reference -- that people who have kept the money by taking permission from the RBI is legitimate and who have kept the money by not taking permission of RBI is not legitimate."
Rajan speaking over the Panama Papers at a Confederation of Indian Industry-organised event in Mumbai Thursday said that it was important that societies worked towards legitimizing wealth because the phenomenon of rich citizens spiriting money away in tax havens may encourage dissatisfaction among the less well-off.
"This is dangerous... the fact that there are occasions where people are found to be hiding their wealth as in the Panama allegations, essentially it contributes to the process of de-legitimisation," he said.
Jaitley in the interview added a political twist to the black money issue and said while some people were angry with him because the government was strict, some previous regimes kept silent on the issue of illegal money parked abroad.
But the Congress returned the allegation and said the government had ignored the ICIJ probe in the past. It also demanded a Supreme Court-monitored Special Investigation Team probe against all those whose names have cropped up in the 'Panama Papers' case till date.
The Communist Party of India-Marxist (CPI-M) doubted if the Modi government was ready to "touch the structure of tax havens, money laundering and the generation of black money". In an editorial in the CPI-M journal "People's Democracy", the party said the government "should impose a blanket prohibition on Indians acquiring shell companies and operating secret accounts in tax havens".
The Aam Aadmi Party (AAP) ruling Delhi demanded Jaitley's resignation, saying one of those linked to the 'Panama Papers' was the BJP leader's friend Lokesh Sharma.
Sharma is managing director of sports management major Twenty First Century Media and has two companies of his own registered in the tax haven of British Virgin Islands. The third is a subsidiary of the sports company, according to the expose.
AAP leader Ashutosh said Jaitley should also reveal what kind of relations he had with Sharma. He said a free and fair probe into the 'Panama Papers' was doubtful as long as Jaitley was in the union cabinet.
