Déjà vu on Black Money

panama papers

Data from 180 countries have been mentioned which categorically includes 714 Indians


The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport that have sheltered their wealth in secretive tax havens are being revealed this week in a major new investigation into Britain’s offshore empires. The details come from a leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.

The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners including the Guardian, the BBC and the New York Times. The project has been called the Paradise Papers. It reveals, “The disclosures will put pressure on world leaders, including Trump and the British prime minister, Theresa May, who have both pledged to curb aggressive tax avoidance schemes.”

The publication of this investigation, for which more than 380 journalists have spent a year combing through data that stretches back 70 years, comes at a time of growing global income inequality. Meanwhile, multinational companies are shifting a growing share of profits offshore – €600bn in the last year alone – the leading economist Gabriel Zucman will reveal in a study to be published later this week.

“Tax havens are one of the key engines of the rise in global inequality,” he said. “As inequality rises, offshore tax evasion is becoming an elite sport.”


After Panama and HSBC listings now Paradise Paper leaks in the new investigation details has opened the Pandora’s Box of hidden offshore and banking assets. Data from 180 countries have been mentioned which categorically includes 714 Indian nationals. As far as the list is concerned, India ranks 19th. The cache of 13.4 million documents named Paradise Papers has been investigated by the International Consortium of Investigative Journalists (ICJI) and 96 other news organizations all over the world. Credit goes to German Newspaper Suddeutsche Zeitung for exploring this huge data which can certainly expose black money nexus.

As far as Indians are concerned, Paradise Paper leak is going to be immensely important in disclosing the names. Indian company Sun Group which is headed by Nand Lal Khemka has got 118 offshore entities. Considering the clients, whom Appleby handles, a prominent firm helping to exploit loopholes in the taxation system, the 2G 3G spectrum needs to be a relook as Sun Group is one of the beneficiaries.

Be it Amitabh Bachchan or corporate lobbyist Nira Radia or Sanjay Dutt’s Mannayta or Civil Aviation Minister Jayant Sinha or BJP Rajya Sabha MP RK Sinha- the list is not at all a small one. Apart from that GMR group, Jindal Steel, Apollo Tyres, Havells, Hindujas, Emaar MGF, Videocon, Hiranandani Group, DS Construction – a detailed investigation is certainly needed to find the extent to which money has been extorted or wealth details and ultimately how much national revenue has been compromised. Unfortunately, India didn’t witness a single investigation after the Panama Leaks where as Pakistan PM Nawaz Sharif had to resign. Thus it remains to be seen whether in India, there will be a lawful investigation on details obtained from Paradise Paper Leaks or not.


Even as the Central Board of Direct Taxes came out with statement on Paradise Paper leaks saying that the Investigation units of the Income Tax Department (ITD) have been alerted to take note of revelations for immediate appropriate action.

“It has been reported that many cases of offshore entities are already under investigation on fast track. As soon as further information surfaces, swift action as per law will follow,” says the statement adding that the government has directed that investigations in cases of Paradise Papers will be monitored through a reconstituted multi-agency group, headed by the CBDT chairman having representatives from enforcement directorate (ED), Reserve Bank of India (RBI) and Financial Investigation Unit (FIU).

According to the Central Board of Direct Taxes, “The Panama Papers contained particulars of about 426 Indians or persons of Indian origin. The Income Tax Department conducted enquiries in all 426 cases by making 395 references to 28 foreign jurisdictions. Based on analysis of the information obtained and investigation conducted, the outcome so far indicates 147 actionable cases and 279 non-actionable cases (non-residents/no irregularities etc).”

The statement further says that out of the 147 actionable cases, investigations have led to the detection of undisclosed credits (in bank accounts) of about Rs 792 crore. Searches have been conducted in 35 cases and surveys in 11 cases. In some cases, the persons have been confronted with the evidences during enquiries.

Only in 5 cases criminal prosecution complaints have been filed, while in 7 cases notices under section 10 of the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 have been issued. According to statement, further investigation in all the above cases is in progress.

In the Mossack Fonseca paper leak case, the finance ministry has in July this year issued a statement saying that 30 countries which forms the Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) have started to exchange, analyse and act on information about taxpayers and intermediaries connected to Mossack Fonseca. It further said that in the previous six months, more than 570 requests for information had been sent to 32 countries. India had also sent several requests for information to various jurisdictions in the Panama Paper cases since the last meeting in January 2017.

In a similar expose in 2013 by International Consortium of Investigative Journalists (ICIJ), the same organisation behind the recent Paradise and Panama Paper Leaks, names of 700 Indians had came up  with ‘business connection with off-shore entities’. Out of these, 434 were Indian residents, 184 of whom admitted to having links with off-shore entities.

As of last year, only 52 prosecution complaints had been filed by the income tax department and 20 cases were being investigated by the enforcement directorate (ED). The tax department could detect only Rs 2,000 crore credit in these accounts.

In 2011, the government received information about 628 Indian persons having accounts in HSBC, Switzerland. The government could trace 569 persons given in the list, out of which 214 cases were found “not actionable on account of no balance or being non-residents or being non-traceable”, according to the finance minister.  I-T department has filed 154 prosecution complaints in the HSBC cases. ED was investigating 23 cases.