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Tax havens abroad: Where can Indian investigative agencies step in?

Investigation by The Indian Express and intl journalists' group reveals huge money transfers and clearly hint at tax evasion. One piece in the puzzle is still missing.

Written by Ritu Sarin
New Delhi | April 4, 2013 3:02:09 pm

Despite the high-pitched debates in Parliament and the hyperbolic contents of PILs filed in the apex court on the subject of black money,the insight and scrutiny of offshore investments and monies stashed away in tax havens by Indians has been negligible.

In 2011,The Indian Express published names of 18 account holders in the LGT Liechtenstein Bank but the deposits,it turned out,were not very huge.

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The same year,The Indian Express reported that French authorities had handed over a list of around 700 names of Indian account holders in the HSBC Bank in Geneva. That list was the result of data gleaned by a former bank employee which then became part of a diplomatic transparency drive. That entire list of names is still not out and according to tax officials who handled the HSBC cases,the data only contained minimal information such as details of account opening,passport numbers and the balance in the account — till the date the data was leaked.

The stockpile of data with the ICIJ (International Consortium of Investigative Journalists) on two Trusts which offer global patronage for opening offshore companies is much more comprehensive.

In the case of the Indian portfolios,the names of the investor is sometimes mentioned as a Director or Beneficial owner and the documents contain his or her address,passport numbers and so on.

In some instances,the documents run into hundreds of pages and in others,just a dozen. There are also,in a few cases,email exchanges between Trust and Bank officials on setting up the offshore entity,which mention huge money transfers and clearly hint at tax evasion. There are also documents which hint at the Trusts being part of the patrons’ business dealings by taking a commissions on trade transactions attracted by them.

But while there are details of monies paid and owed by the patrons to the Trusts,the critical missing piece in this offshore jigsaw is the money flows in and out of the offshore companies. That is where the Indian investigating agencies can step in.

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