Govt to Disclose Names of Swiss Account Holders

Thursday, October 23, 2014
Illegal outflows from India since 1948 are estimated to be worth $462 billion (photo: Wikimedia Commons)

The government has started filing charges against individuals having accounts in Swiss banks, which will allow it to disclose names of those who have allegedly stashed black money abroad, amid media speculation that some prominent politicians may figure on this list.

According to the Times of India, prosecution has been initiated against one foreign account holder on the ‘HSBC Geneva list’, and this would be followed by action against another 15-20 individuals.

The Swiss authorities have reportedly confirmed the identities of the people on the list on the condition that their names could only be shared with the courts after charges are framed. That is the reason for prosecution now being initiated against some account holders, which would allow the government to disclose their identities in a sealed envelope 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.

Finance Minister Arun Jaitley did not deny the possibility of a former UPA minister being on the list. "I am neither confirming, nor denying. I am only smiling," he told Times Now on Wednesday.

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

This development follows the controversy last week when the government told the Supreme Court that it could not disclose the names, as that would fall foul of international agreements. The government’s stance, in contrast to the NDA’s stance during the election campaign in May, led to accusations of hypocrisy from the Opposition.

The Congress accused the Modi government of doing a U-turn on the issue. The BJP hit back, with Jaitley saying that treaties signed by the earlier UPA government prevented them from disclosing names of those account holders not facing charges.

Interestingly, a former UPA minister, who was sent a notice to appear for questioning to explain his bank deposits, is believed to also have accounts in the UAE and claimed that he had closed his Swiss accounts long ago.

The French government had shared the HSBC Bank list in 2011, which contained names of 700 Indian account holders. The earlier UPA administration had asked the Directorate of Criminal Investigation (DCI) to probe the case. DCI had questioned some top industrialists over deposits estimated to be over Rs 800 crore ($133.3 million), but nothing came of its investigation.

The Times of India reporters learnt from investigators that the list shared by France of Indians having accounts in HSBC Bank, Geneva, allegedly featured a few Congressmen and their scions with large deposits at the time that the list was leaked.

The government has so far recovered only Rs 200 crore ($33.3 million) by way of tax and penalties from the names shared by France and Germany, which included account holders in LGT Bank in Liechtenstein. The total assessed income in these two cases has crossed Rs 600 crore ($66.6 million) so far. While prosecution is being launched against many account holders on the HSBC list, the income tax department has reportedly filed cases against 18 persons on the LGT Bank list.

This pales into insignificance in comparison with the total amount allegedly taken out of the country in the past 60 years – estimated to be worth $462 billion as of 2010, according to Global Financial Integrity, a Washington-based group researching cross-border money transfers.

With black money now becoming a hot political issue, the India public is demanding action. This has forced the NDA government to move ahead with prosecution of account holders.

According to the Times of India, a fresh list of 19 persons having accounts in Liechtenstein Bank may be shared with the Supreme Court soon, followed by another 20-odd names from the HSBC list.

But the challenge will be to convince everyone that the government is acting impartially, and not using these foreign accounts to selectively target political opponents. The sooner the entire HSBC list of 700 names is released the better.


To Learn More:

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

Finance Minister Arun Jaitley hints at UPA minister in black money list (PTI)

Don't blackmail us on black money: Congress to Jaitley (India Today)

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)


Leave a comment