India reveals first eight names in black money probe

Authorities step up attempts to recover lost billions of untaxed money

The Indian authorities have revealed the names of eight businessmen they have accused of being among dozens of people hoarding untold sums of “black money” in foreign banks.

In the latest development in the government’s efforts to recover what it believes may be billions of dollars of untaxed or illicitly eared money, officials “named and shamed” eight people accused of holding such funds in a Swiss bank.

The names of the individuals were placed before the Supreme Court in Delhi, which is pursuing its own inquiry into so-called black money. Those named were Pradip Burman, a former executive with the Dabur consumer goods group, Pankaj Chimanlal Lodhia, a bullion and jewellery dealer and Radha Timblo, a mining executive from Goa. Four other members of Mr Timblo’s firm were also named.

The government told the court that the individuals were being prosecuted for alleged tax evasion, though all the individuals named have denied any wrongdoing.

There is a widespread belief in India that huge wealth is hidden away in foreign bank accounts in countries such as Switzerland, Liechtenstein and Cyprus. This is because it is widely recognised that a large fraction of all transactions in the country take place in the parallel, untaxed economy.

Analysts say much of this money is laundered inside India in real estate and home building investments. Despite this, a number of politicians – India’s Prime Minister, Narendra Modi, among them – insist that bringing back untaxed money from overseas could help pay for development projects. Historically, the threat to reveal the identity of such account holders has often being used by political parties to try and intimidate their rivals.

Quite how much money may be squirrelled away overseas remains unclear. Four years ago, a report published by the Washington-based non-profit group Global Financial Integrity, estimated that a total of $462bn (£287bn) earned from tax evasion, crime, and corruption had been secreted outside of the country between 1948 and 2008.

“Tax evasion is a major component of the underground economy, which in turn is a primary driver of India’s illicit outflows,” the report said. “Expanding India’s tax base and improving tax collection has high potential to curtail illicit flows.”

Mr Modi, of the Bharatiya Janata Party, was elected earlier this year having vowed during the general election to crack down on corruption and bring back black money to India from overseas. His Finance Minister, Arun Jaitley, is spearheading the efforts to recover money that may hidden overseas.

Indian media has reported that there are a total of 628 names on the so-called HSBC black money, a collection of names holding accounts in the Geneva branch of HSBC’s Swiss subsidiary HSBC Private Bank. The list was stolen by a HSBC employee and made its way to the Indian authorities.

Switzerland, which is famous for the strict secrecy laws surrounding its banking industry, recently said it would help Delhi in its investigation into illegal money. For many years it had refused to do so, concerned that agreeing to such a step would damage its reputation.

On Monday, those named by the government denied the allegations levelled at them.

The Dabur Group, with whom Mr Burman is named as a promoter, said he had opened the account when he was living overseas. “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,” it said, according to the Press Trust of India.

Mr Lodhia said: “I do not have any Swiss account. I have declared all assets and I have not been served any notice.”

A spokesman for the Timblo company said it had not yet been served with any legal notice.

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