Professional Documents
Culture Documents
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Black money list: Govt names gold trader Chimanlal, ex-Dabur exec,
miner Timblo
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Black money: Radha Timblo had illegal Goa mines and a Pakistan connection
08
Pradip Burman named in black money case: Who is this former Dabur exec?
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11
Black money case: SITs next steps, full list of names and more
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Even disclosing all names wont bring back black money to India
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Name and shame begins but politicians wont appear on black money list
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In pursuit of black money, Supreme Court is biting off more than it can chew
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Black money list: BJPs modus operandi no different from previous UPA govt
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False promises? BJPs response on black money is even worse than UPAs
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Black Money karma: BJP has fallen into ditch it had dug for Congress
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We are back to square one in black money case: SIT chief M B Shah
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In Goa's Wild West kind of dubious mine ownership, illegal operations have become easy. At
most mines, details about the name, the lease
details, and survey numbers are missing from
the site. These open cast mines exist right in the
forest area - almost unseen, except by the locals
employed there. The contractors who operate
them are neither registered with Goa's Directorate of Mines, nor are they recognised under the
Mines and Minerals Regulation and Development (MMRD) Act as lessees.
In short, iron ore is often mined by people who
have no claims to the ore. Kamat ran a blind eye
to mining operations that have yet to get their
licences renewed. According to official records,
renewal applications of at least 13 active mining leases have been pending since 1988. This
means for 26 years, the Goa government has
allowed miners to extract iron ore from these
illegally. Only fresh investigations can reveal the
motive behind keeping these renewals pending
for 26 years.
Even the mines which were cleared in 1988
had a licence validity of 20 years. But when
these lessees applied for renewals in 2008, the
Copyright 2012 Firstpost
The SIT, headed by Justice MB Shah, with Justice Arijit Pasayat as vice chair, was called for by
the Supreme Court by way of an order July 4,
2011, and officially notified by the government
end-May this year.
The other two envelopes pertain to information
furnished by the French government and the
action taken by the Government of India thus
far in trying to get back the illegal funds parked
by Indians in overseas banks and estimated at
between $426 billion and $1.4 trillion.
Here is all you need to know about the
case so far:
1. Attorney General Mukul Rohatgi, who said
the government would not seek modification of
the SC's 2011 order to give all names clarified that of the 627 names, only 350-odd were
residents of India against whom authorities had
issued notices. The other 270-odd individuals
were non-resident Indians (NRIs) who were im-
The naming-and-shaming routine is thus unlikely to yield much public pleasure for the simple reason that that so much time has elapsed
since the account-holders knew their names
with the government. The mere fact that these
names were with the government means deals
have been done to clean up the trail.
The Swiss bank list allegedly containing some
700 names became public knowledge in 2008
when a former HSBC employee stole the data
and gave it to the French government. The
French government, in turn, decided to share
the details with our own government. Surprise:
2008 was when the Swiss bank amounts of Indians fell drastically. But despite having the list,
the Indian government acted cagey and decided
that it will chase the account-holders directly
for tax dues. There is good reason to suspect
that the government was not keen to disclose
the names as it would have embarrassed politicians - not just in the UPA, but NDA too - and
businessmen close to them. Now we are unlikely
to be any wiser.
Around mid-2011, The Economic Times reportCopyright 2012 Firstpost
The very fact that one of the names disclosed Chimanlal Lodhiya - is in all TV channels denying he has a Swiss account suggests that nameand-shame is not going to lead anywhere. If he
thought he was vulnerable, he wouldn't be so
brazen about it.
In fact, the money has probably arrived in
India through several routes. The big rise in
gold imports we saw in 2011 and 2012 probably was intended to help store the money that
returned home. The unexpectedly large surge
in the export of some categories of engineering and copper products in 2010-11 may really
have been Indian money returning through the
overinvoincing route. The sharp increase in FII
inflows during those years may also partly have
been Indian money returning to our markets.
Some of it went into real estate, when it was
booming till 2012; the rest would have gone into
stocks from 2013.
As long as the government controls or manages the disclosure it had enormous power over
a very large section of people and the black
economy. Once the names are out the government, and more importantly bureaucrats in the
finance ministry who have access to this information will command enormous clout.
While the BJP spokesperson made it a political issue and stated the discomfort of Congress
on disclosing the names, the truth is it is not
the Congress which is uncomfortable but every
businessman who has in the past dealt with
Swiss banks is feeling uncomfortable. Though,
over the last five years, especially after the leak
of the HSBC list and pressure on Swiss banks to
disclose, most black money has shifted to other
countries.
For instance, a very powerful political family of
Haryana started diversifying its bank accounts
away from Switzerland to other countries.
They started putting their money like Russian
already burning as the biggest fear of a businessman has been triggered. A witch-hunt has
begun and the bureaucrats controlling the list,
the ones deciding the chargesheet are the most
powerful people in India.
ficial in the know of the issue, shared on condition of anonymity. Even, Finance Minister Arun
Jaitley has said, "Government will reveal those
names against whom evidences are available."
As per an agency report, the government
had asserted that it had no intention to withhold names of people who have parked black
money in tax havens, but such names could be
disclosed only if evidence of tax evasion and
wrongdoing against the account holder gets
established.
"There is no provision under the Income Tax
Act related to the disclosure of information on
black money. Currently, the DTAA between
India and Switzerland does not cover the clause
pertaining to the automatic exchange of information, thereby enabling India to obtain
information related to suspicious transactions
by Indians in Switzerland. Further, under such
agreement disclosure of the information obtained can be made to courts only for the purpose of determination of the taxation matter in
question. Such an agreement is subject to negotiations between the two countries, explained
chartered accountant and consultant Abhishek
Aneja.
So, the primary question is of time how long
would it take for the government to establish
tax evasion against all those named in the list?
And, whether the country will ever get to know
who these people are only petty businessmen
or politicians, or the real powerful men?
"Black income is generated by violating the
countrys law in a systematic manner. A trio
comprising corrupt politicians, bureaucracy and
a section of judiciary helps the corrupt to earn
black money, who may be from this trio or businessmen, corporates, etc. So, the list may have
names from all these categories. Itll need a
strong political will," said professor of economics at JNU, Arun Kumar.
Copyright 2012 Firstpost
ne party that made the biggest political capital out of the much fabled black
money issue in India is the BJP when in
2009, the then PM-aspirant LK Advani declared
that he would bring back to the country all the
offshore wealth stashed away by Indians in 100
days.
Advani didnt become the PM and the BJP
easily escaped defaulting on its promise. After five years of incessantly charging the UPA
with shielding black-money holders, the party
repeated its promise on the issue before the
elections in 2014. This time, the BJP president
Rajnath Singh repeated what Advani had said.
This time, however, the party won the elections
and they had a deadline at hand. "Imagine what
we could do with all that money! We could build
roads, electricity grids, flood barriers this
money is the money of the people, Advani had
said.
But what came out of that promise on Monday
was a damp squib. A terrible anticlimax of all
the promises and hype that they had dished our
for years - three insignificant names and perhaps even more insignificant amounts of money. What shocked the nation was BJPs response
when asked about other names, the quantum
of black money, and all the promises they had
made.
The party said that it was legally bound not to
name and shame. It can only disclose names
to a court, that too after filing charge-sheets
against the black money holders.
The names will have to be preceded by investigations. Its a time consuming process.
But, what about all the hype that you had created and the grand promise you had made that
you would bring back the money in a certain
number of days?
Investment in Indian stock market by participatory notes s is another way of bringing back the
money. So, the trillion, or a quarter of it, that
poor Indians are salivating about is an abstraction, a fantasy. Even if there is real money, that
too in the billions, how would India ever lay
its hands on them? Did BJP have a plan when
they sold those fantasies? All that the party had
promised in its manifesto was a task force. Lets
get real. At least do something to stem the phenomenon from now. Curb political and corporate corruption.
And please tell Indians that holding a bank
account in a foreign country isnt illegal and
it doesnt mean that it is to stash away black
money. Thats why hundreds of names that foreign banks may hand over may finally boil down
to an embarrassing three or a handful.
deliver justice.
Last week finance minister Arun Jaitley told a
TV channel that some names would cause the
Congress party embarrassment. As it turned
out, one Goa mining company, whose name was
made public, has funded the BJP nine times
since 2004. It has given the BJP twice as much
funding as the Congress. So was Jaitley aware of
all the facts, one wonders!
This, in fact, is the crux of the whole black
money issue. The Goa based mining company
gave just over Rs.1 crore to the BJP.
But there are much bigger fish in this game who
generate billions of dollars of black money every
year and regularly fund the cash component of
election funding for the bigger national parties. Will the BJP government ever bring the
big companies, which fund elections with pure
cash, under investigation? Most unlikely.
Therefore, an elaborate charade of bringing
back black money is being played by successive
governments. These days a new mythology is
being created-- that of leaders who are "personally clean" even though they run organisations
which get thousands of crores of slush funds.
This "personal cleanliness" of individual leaders
is the most bogus narrative and this new theme
being propagated by the faithful because there
is a yearning for clean politics in a system which
perpetrates its very opposite.
So where does the BJP-led crusade against
black money go from here? It goes nowhere,
really. For now the list of about 700 allegedly
illegal account holders is lying in a sealed cover
with the Supreme Court and the Special Investigation Team headed by a retired judge.
The SIT, under the apex court's monitoring, will
further probe the individuals named as owners
Copyright 2012 Firstpost
of these accounts. Most of them are businessmen, and bit players at that. The SIT will have
to establish the illegality of these accounts and
frame charges over the next few months. The
names cannot be revealed before that.
The government told the Supreme Court that
it will become difficult for India to sigh future
treaties on information sharing with other
countries if the names are revealed before
gathering evidence and making out a reasonably
foolproof case.
Surely Arun Jaitley knew this legality when the
BJP, as opposition, was screaming from the
rooftops promising to publicly produce all the
names and the money in their accounts within
100 days of coming to power.
For now, the BJP has got trapped in its own
hyped-up rhetoric around black money. Its
initial bravado about revealing some names
was based on a list of account holders in HSBC,
Switzerland. This list was stolen by an HSBC
employee on a particular day in 2006. So the
accounts reveal the status of funds on just that
particular day. Not before or after that date. In a
sense, this list has very sketchy and inadequate
information.
There is no way the government can come up
with anything substantive in the next one year.
As for the much publicised $500 billion of black
money allegedly lying in tax havens, even the
Sangh Parivar faithfuls are becoming increasingly skeptical about it.
In effect ,the BJP has truly made a mockery of
its much publicised election commitment that it
will reveal the identities of all Indians who have
black money stashed in illegal accounts abroad.
Government of India had to give an international commitment that it would follow international standards on information received. Late
night reports indicate that India was not able to
attend that meet, they said without citing any
reasons for the absence.
Indian domestic tax law, such as the Indian Income Tax Act, allows these treaties more importance, whenever it is subject to interpretation
although according to the Indian Constitution,
an international agreement comes into force
only after its enactment by the Indian Parliament. But, in the case of tax treaties, it becomes
law as soon as thy are signed by the other country and notified by the Centre. In short, a bilateral tax treaty supersedes Indian law when it
comes to obligations of India with the partner
country. How many Indians know this?
This is the risk of the bilateral treaties although
they are necessary for promoting business and
investment. Since the Parliament is not taken
into confidence while formulating and signing
such treaties, there should be more transparency, information and national debate around
them. A government, whether its the UPA or
the BJP, should not be vested with all the power
to negotiate with countries and sign agreements
that make the domestic law irrelevant. Had they
gone through the parliament, the elected representatives as well as the country would have had
a chance to look at the pitfalls. The argument is
not against the bilateral treaties, but for being
cautious and more participatory.
The point is also about political will than political rhetoric. If the BJP is serious about black
money, will it take a re-look at some of the bilateral tax treaties? Or will it at least stop signing
such treaties without informing the parliament?
The confidentiality clause will continue to hamper Indias efforts in tracking and recovering
black money held abroad.
The governments of the day may like these treaties because they help them conceal the inconvenient truth such as who all hold black money
in overseas banks.
half are NRIs. The needle of suspicion is obviously on the first half because the law does not
allow an Indian resident to open foreign bank
accounts. Assuming the SIT zeroes in on these
300-and-odd names, it would still be an impossible task to take the cases to their logical conclusion by 31 March 2015.
Clearly, an ordinance making a retrospective
amendment is in order. Otherwise, it would be
a hasty job with attendant consequences---open
to attack by the assessees on grounds of conjectures and slipshod work characterising the
assessments.
It is also curious that the Attorney General
has had an income tax fixation. Illicit money
stashed away abroad has ramifications transcending the income tax law. One wonders if
there is a law of limitation to heckle the SIT in
such cases.
n Wednesday, the government submitted the entire list of black money account holders to the Supreme Court.
The documents include 627 names and status
report of their investigation in these cases.
Later in the day, in an exclusive interview with
CNN IBN, Special Investigation Team (SIT)
chairman former Justice M B Shah said that the
developments in the black money case in the
last few days are insignificant.
"We are back to square one. The government
has submitted the same list which was submitted to us last June. All the facts that have been
revealed in the black money list were already
known to the SIT," said the Justice Shah.
The Supreme Court keeping the names of account holders secret is being seen as a win-win
situation for all concerned.
From possibly kicking India out of a pact to
have access to information on tax evaders to
affecting remittances from the US, revealing the
names of account holders could have a greater
impact on Indian enforcement authorities in the
future, in a pursuit that may yield few gains.
But even if the names are revealed by the SIT by
the November-end, as Firstpost's R Jagannathan had noted, most of the black money is probably already back in India or elsewhere given
that the Indian economy has been doing better
than most of its global peers.
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