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HindustanTimes Sun,28 Dec 2014

Government claims it is hot on black money trail

HT Correspondent, Hindustan Times  New Delhi, November 10, 2012
First Published: 18:36 IST(10/11/2012) | Last Updated: 01:59 IST(11/11/2012)

As activist-turned-politician Arvind Kejriwal sought to keep up heat on the government to act against international bank HSBC, the government on Saturday said investigations were under already underway on the basis of information received from the French government in June last year.

The information about the reported accountholders has been “analysed and investigations initiated” under the Income Tax Act by different agencies, the finance ministry said in a statement.

The finance ministry said “appropriate action” had been taken on cases and decisions are being taken on the basis of facts of each case.

Without naming the international bank or accountholders, the statement recalled that the then finance minister Pranab Mukherjee had already spoken on the subject in Parliament twice. However, it reiterated that the double taxation avoidance treaty with France had a confidentiality clause and restricted use of the information only for tax purposes.

Kejriwal, however, said the official statement seemed to hide more than what it has sought to explain. “The finance ministry has ducked the issues raised by us and protect the bank and top corporates,” he said.

In June 2011, the French government had handed over details of about 700 accounts held in Swiss bank accounts.

Kejriwal on Friday alleged the government hadn’t acted against top companies and individuals that allegedly deposited unaccounted money in HSBC’s Geneva branch.

The security establishment, however, has taken note of Kejriwal’s allegations about the ease with which individuals had been able to open and operate their offshore accounts. Kejriwal had particularly pointed out how terrorists could use similar channels to fund terror.

Government sources indicated that intelligence agencies would look at the issue to confirm that this hasn’t happened in the past and assess if existing safeguards needed to be tweaked.

Terrorists using formal and informal banking channels to launder money have been a key concern for the home ministry. Home minister Sushilkumar Shinde said security agencies did have information that terror groups invested in the stock market and kept track of funds. But he didn’t give any details, saying it would not be proper to make the names of suspects public.

Tax authorities in the UK have already initiated a probe to find out if HSBC has been involved in any activity relating to money laundering following allegations that the bank had opened offshore bank accounts in Jersey to aid criminals.

The Reserve Bank of India could also ask HSBC’s India operations to look into certain accounts. “Though there has been no indication of any Indian link yet from the UK investigations, the central bank could ask HSBC’s India arm to look into the accounts,” said an official source, who did not wish to be identified, HT. HSBC India refused to comment on the issue.

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