Black Money Trail: Govt Discloses 3 Names With Swiss Accounts

Monday, October 27, 2014
It is not illegal to have a bank account overseas, so merely having a foreign account does not imply it contains black money

The government has disclosed to the Supreme Court the names of three persons who allegedly deposited black money abroad. According to Hindustan Times, the three individuals mentioned in the affidavit submitted on Monday are: former Dabur executive Pradip Burman, bullion trader and jeweller Pankaj Chimanlal Lodhia and Goa miner Radha S Timblo. No politician’s name has been revealed so far in an issue that has gripped the political class and media for the past month.

Hindustan Times reported last week that the government would disclose to the Supreme Court the names of people against whom strong evidence exists of depositing black money in Swiss banks.

It is not illegal to have a bank account overseas, so the mere fact of having a Swiss bank account does not necessarily imply it contains black money. Nevertheless Indian citizens are required to disclose their foreign accounts to the Indian tax authorities. The question being raised by the government is that these three individuals had accounts that allegedly contained funds that were not taxed or were illicitly taken out of the country.

Reacting to the disclosure, a Dabur spokesperson said, "The Burman family is committed to the highest standards of corporate governance, and encourages ethical behaviour at all levels. We wish to state that this account was opened when he was an NRI, and was legally allowed to open this account. We have followed all the laws and the complete details regarding the account have been voluntarily, and as per law, filed with the Income Tax Department, and appropriate taxes paid, wherever applicable. Therefore, it is unfortunate that every person having a foreign bank account is being painted with the same brush."

Lodhia also denied the allegation. "I have no foreign bank account. I have no idea how I was named in the list. I'm shocked the government named me," the Rajkot jeweller told Times Now.

In 2011 the French government had shared a list of Indian account holders of HSBC Bank, Geneva, which contained 700 names. The German government also shared a list of Indians holding accounts in LGT Bank in Liechtenstein.

The Swiss authorities have reportedly confirmed the identities of the people on the HSBC list on the condition that their names could only be shared with the Indian courts after charges are framed. The government has therefore initiated prosecution against some account holders, which would allow it to disclose their identities to the Supreme Court.

There is much speculation about the identity of the account holders, with the media discussing the possibility of these including a former Union minister and the son of another, a former MP with family links to a leading business house, and the scion of a political dynasty that is currently passing through a lean patch.

The unstated allegations have already drawn a tough response from the Congress, which told the government last week to release all the names, instead of releasing these piecemeal.

Prime Minister Narendra Modi's administration is attempting to repatriate hundreds of billions of dollars in slush funds or black money stashed abroad, as part of a wider clampdown on corruption that he promised during his election campaign. It has quickly implemented a Supreme Court directive to set up a special investigation team, headed by retired judge MB Shah, to look into the issue.

According to the Times of India last week, a list of 19 persons having accounts in Liechtenstein may be shared with the Supreme Court soon, followed by around 20 more names from the HSBC list.


To Learn More:

Black money list: Centre names Rajkot jeweller, ex-Dabur executive, Goa miner in SC (Hindustan Times)

Assocham against govt disclosing names of black money holders (PTI)

Black money: NDA moves to make names public, top politicians said to be on list (by Pradeep Thakur, The Times of India)

India to send 50 names to Switzerland for probe (by Appu Esthose Suresh, The Indian Express)

The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008 (by Dev Kar, Global Financial Integrity)


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