Leaked files from a Panama law firm that creates shell companies show that politicians, criminals, and celebrities worldwide have used banks and shadow companies to hide their finances, according to information collected by German daily Sueddeutsche Zeitung and shared with media worldwide by the International Consortium of Investigative Journalists (ICIJ). India has been no exception: 500 of its citizens have been named as holding offshore accounts. While offshore holdings can be legal, they can also be used to hide wealth.
Within hours of its publication, New Delhi on Monday announced its decision to form a multi-agency group to monitor exposes in this regard and vowed to take action against all "unlawful" accounts held abroad. The divulgences also prompted a parliamentary vote of confidence in Iceland, a curt denial from Argentina and ridicule from a close confidant of Russian President Vladimir Putin.
The consortium said it had obtained a cache of 11.5 million records outlining the creation of more than 200,000 offshore shell companies. The trove includes offshore companies linked to 12 current and former world leaders, as well as hidden financial dealings by 128 more politicians, public officials and entertainment celebrities, according to the ICIJ.
Union Finance Minister Arun Jaitley told reporters that Prime Minister Narendra Modi discussed the issue with him this morning and on his advice the group was being set up comprising agencies like CBDT, RBI, and FIU (Financial Intelligence Unit).
The Special Investigation Team (SIT) on black money also said it will investigate thoroughly the reported secret list exposed by the International Consortium of Investigative Journalists (ICIJ).
"The multi-agency group will comprise various government agencies -- the CBDT, FIU, FT&TR (Foreign Tax and Tax Research) and RBI. They will continuously monitor these (accounts) and whichever accounts are found to be unlawful, strict action as per existing laws will be taken," Jaitley said.
What makes an offshore account legal or not is often simply a question of whether it's declared to tax authorities, said Professor Peter Hahn at London's Institute of Financial Services.
"Rather than blame the banks for such transactions, international attention should focus on requiring disclosure of the end of the chain owners of shell companies, eliminating the ability of the unscrupulous to misuse the banking system and create vast compliance costs for legitimate businesses," Hahn said in response to e-mailed questions from Bloomberg.
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Multi-agency group to monitor Panama leaks
By IndianMandarins - 2016-04-05 11:47:48
Leaked files from a Panama law firm that creates shell companies show that politicians, criminals, and celebrities worldwide have used banks and shadow companies to hide their finances, according to information collected by German daily Sueddeutsche Zeitung and shared with media worldwide by the International Consortium of Investigative Journalists (ICIJ). India has been no exception: 500 of its citizens have been named as holding offshore accounts. While offshore holdings can be legal, they can also be used to hide wealth.
Within hours of its publication, New Delhi on Monday announced its decision to form a multi-agency group to monitor exposes in this regard and vowed to take action against all "unlawful" accounts held abroad. The divulgences also prompted a parliamentary vote of confidence in Iceland, a curt denial from Argentina and ridicule from a close confidant of Russian President Vladimir Putin.
The consortium said it had obtained a cache of 11.5 million records outlining the creation of more than 200,000 offshore shell companies. The trove includes offshore companies linked to 12 current and former world leaders, as well as hidden financial dealings by 128 more politicians, public officials and entertainment celebrities, according to the ICIJ.
Union Finance Minister Arun Jaitley told reporters that Prime Minister Narendra Modi discussed the issue with him this morning and on his advice the group was being set up comprising agencies like CBDT, RBI, and FIU (Financial Intelligence Unit).
The Special Investigation Team (SIT) on black money also said it will investigate thoroughly the reported secret list exposed by the International Consortium of Investigative Journalists (ICIJ).
"The multi-agency group will comprise various government agencies -- the CBDT, FIU, FT&TR (Foreign Tax and Tax Research) and RBI. They will continuously monitor these (accounts) and whichever accounts are found to be unlawful, strict action as per existing laws will be taken," Jaitley said.
What makes an offshore account legal or not is often simply a question of whether it's declared to tax authorities, said Professor Peter Hahn at London's Institute of Financial Services.
"Rather than blame the banks for such transactions, international attention should focus on requiring disclosure of the end of the chain owners of shell companies, eliminating the ability of the unscrupulous to misuse the banking system and create vast compliance costs for legitimate businesses," Hahn said in response to e-mailed questions from Bloomberg.
