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Paradise Papers: Probe into use of tax havens to be headed by CBDT chief

More than 700 Indians, including politicians, industrialists and celebrities, figure in the Paradise Papers that focus on their alleged offshore investments in tax havens

india Updated: Nov 06, 2017 20:56 IST
Suchetana Ray
A multi-agency group – comprising taxmen and officers of the CBI, Enforcement Directorate and Financial Intelligence Unit – will look into the Paradise Papers case.
A multi-agency group – comprising taxmen and officers of the CBI, Enforcement Directorate and Financial Intelligence Unit – will look into the Paradise Papers case.(Getty Images/iStockphoto)

A joint panel of India’s top tax and financial crimes agencies will investigate leaked financial documents that allegedly show potentially illegal offshore dealings of hundreds of Indians, the country’s tax chief said on Monday.

The so-called “Paradise Papers”, released on Sunday by a collective of international journalists who pored over it for months, run into more than 13 million records and internal communications obtained from Bermuda-based offshore law firm Appleby and Singapore’s Asiaciti, a business consulting company.

More than 700 Indians, including politicians, industrialists and celebrities, figure in the documents that focus on their alleged offshore investments and operations.

A multi-agency group – comprising taxmen and officers of the Enforcement Directorate, Financial Intelligence Unit and Reserve Bank of India – will investigate the Paradise Papers.

“We will match the information in the Paradise Papers to ascertain cases of tax evasion,” said Sushil Chandra, chief of Central Board of Direct Taxes (CBDT) who will head the multi-agency group.

Shortly after, the CBDT said in a statement that its Investigation units had already been alerted.

“As soon as further information surfaces, swift action as per law will follow,” it said.

The multi-agency group is already investigating the “Panama Papers”, a trail of millions of secret files that leaked the names of individuals who paid law firm Mossack Fonseca to set up offshore firms in tax havens around the world.

More than 500 Indians figured on the list published last year, including Bollywood stars Aishwarya Rai Bachchan and Amitabh Bachchan as well as Indiabulls chairman Samir Gehlaut. Former Pakistan Prime Minister Nawaz Sharif was disqualified from office over allegations stemming from disclosures in the Panama Papers that said his family’s wealth was more than his known sources of income.

Setting up an offshore firm or account or transferring money back to the country is not illegal unless kept a secret from Indian authorities.

Among the Indians on the Paradise Papers are junior civil aviation minister Jayant Sinha, BJP Rajya Sabha MP RK Sinha and Amitabh Bachchan.

“All these transactions have been fully disclosed to relevant authorities through all necessary filings as required,” minister Sinha said in a series of tweets.

Asked for his reaction, BJP MP Sinha was seen in an ANI news agency video scribbling on a piece of paper in Hindi, “On a seven-day vow of silence for a bhagwat yagna.”

Bachchan was yet to speak on the matter, although in a blog published hours before the Paradise Papers were released he said he only seeks peace and freedom from prominence, and that he was ready to answer any questions.

India has a Special Investigation Team (SIT) to probe cases of black money. The SIT on black money comprises the top bosses of India’s federal and financial crime agencies and reports to the Supreme Court. Most of its members are part of the multi-agency group probing the Panama and Paradise papers.

Several of Appleby’s prominent Indian clients named in the papers are already under investigation by agencies such as the Central Bureau of Investigation and Enforcement Directorate for alleged financial crimes.

India ranks 19 out of 180 countries in terms of number of names and accounts figuring in the Paradise Papers. Queen Elizabeth II, top members of US President Donald Trump’s cabinet and Russian president Vladimir Putin’s son are other prominent names in the Paradise documents.

Data from Appleby and Asiaciti was obtained by German newspaper Suddeutsche Zeitung, which shared it with the International Consortium of Investigative Journalists.