The Enforcement Directorate (ED) has finally taken action on the black money trail arising out of the HSBC case, but by using an unconventional source of information. Last month, the ED shot off notices to three Delhi-based businessmen whose names reportedly figured in the list of 700 HSBC account holders abroad and whose testimonies to the Income-Tax authorities were posted by the Aam Aadmi Party (AAP) on their website.
Officials in the ED as well as the Central Board of Direct Taxes (CBDT) confirmed that following the November 2012 press conference of the AAP — during which the testimonies of the three account holders were released — the statements were authenticated and last month, notices dispatched. The notices were sent for alleged violations under the Foreign Exchange Management Act (FEMA) to Parminder Singh Kalra, Vikram Dhirani and Praveen Sawhney.
The HSBC case was first reported in The Indian Express (August 7, 2011) and till date the Ministry of Finance has been trying to get authenticated bank statements and balances of the 700 Indian account holders. Finance Minister P Chidambaram has himself been in correspondence with his Swiss counterpart, Eleline Widmer Schlumpf, and in his last letter informed her that should her government continue to obstruct passage of data for the Indian bank account holders, India would take up the matter at global fora.
Even as the Finance Ministry continues to chase the leads of HSBC account holders from Switzerland, the Income-Tax authorities have conducted searches and slapped notices on several of them. In the meantime, following the admission of the three account holders that they had not declared the account to the tax authorities, it is the ED that decided to make out cases of forex violations. ED officials said the reason of delay in dispatching the FEMA notices was that the CBDT took several months in confirming that the testimonies released by the AAP were genuine.
In handwritten statements given to the I-T department, the three businessmen have admitted that they had opened the HSBC accounts but this was neither reflected in their ITRs (income tax returns ) nor was RBI’s permission taken. One of the businessmen, Praveen Sawhney, who owns a tyre manufacturing company, also admitted that the HSBC would make remittances to them via “hawala’’ channels. “Once these statements were in the public domain via the AAP website we decided to take cognizance of the information since the illegality of the transfers was very evidence,’’ a top ED official said.
Members of the AAP, in turn, said while they were happy that the ED had taken cognizance of the information they had put out, they were also anxious that the agency takes some action against the bigwigs they had listed as alleged account holders but for whom they could not obtain evidence in the form of copies of testimonies.