Mumbai: The government is continuing its efforts to retrieve money stashed away illegally in foreign banks, including those in Panama, even as it hunts black money evaders at home.
A team of tax officers and other civil servants visited Panama and some other key jurisdictions for tax information exchange in December, said two with people direct knowledge of the matter, requesting anonymity.
“The government is targeting that the information exchange is finalized by the end of the current fiscal or the first quarter of the next fiscal year,” the first of the two persons said, requesting anonymity.
Minutes of the Panama meeting on the finance minister’s website says that India is pressing for tax information exchange agreement or TIEA.
“Discussions covered several bilateral, regional and global issues, ranging from the early conclusion of pending bilateral agreements; (to) India’s desire to finalize the tax information exchange agreement at the earliest,” said the minutes, without going into details.
The visits follow the April 2016 leak of the so-called Panama Papers—11.5 million documents that detail financial and attorney-client information for more than 214,488 offshore entities, largely believed to be used for tax evasion and stashing of illegal wealth.
The documents created by Panamanian law firm Mossack Fonseca contain names of at least 500 Indians. The papers were made public by the International Consortium of Investigative Journalists (ICIJ) and other media organizations.
The matter is also being monitored by the Supreme Court following a writ petition. The government has told the apex court that it is taking the matter seriously and has formed a multi-agency group to examine the matter.
“The Indian tax authorities were facing difficulties just working on the basis of information present in the panama papers as many of the individuals and companies were denying any affiliation with the offshore entities. The onus of proof was on the Indian authorities,” said the second person.
In the absence of a TIEA, Indian authorities were reaching out to Panama through diplomatic channels and the information provided to India comes with the caveat that it cannot be used for prosecution. If the tax deal is not signed, India has the option of labelling Panama as a ‘non-cooperative’ jurisdiction and levy a higher withholding tax of 30%.
The Indian Express newspaper—one of the media group partners in the Panama Papers leaks—on 25 November reported India had sent 198 requests for information to 13 jurisdictions that host offshore entities owned by Indians named in the Panama Papers. As per a Mint report on 24 November, the names included those of actor Amitabh Bachchan, DLF Ltd promoter K.P. Singh and nine members of his family, the promoters of Apollo Tyres and Indiabulls, businessman Gautam Adani’s elder brother Vinod Adani, politicians Shishir Bajoria from West Bengal and Anurag Kejriwal, the former chief of the Delhi unit of Loksatta Party.
“Many entities are camouflaged under false names and sometimes false addresses. Access to entire data would help in resolving such issues,” said the first person.
An interesting offshore entity that is named in the papers is Ischian International Ltd, a company registered in the British Virgin Islands. The company is managed by an intermediary called North Atlantic Trust company. Business Standard reported first on 20 December that the shareholders of Ischian include Laila Jehangir, Pallonji Shapoorji ‘Misty’ and Patsy ‘Misty’.
Though the last names vary, records in the Panama Papers show that the shareholders of the company share the same address as that of the Mistry family.
The office of Pallonji Shapoorji Mistry, an Irish-Indian construction tycoon, said in an email, “We wish to clarify that neither Shapoorji Pallonji Mistry nor Patsy Pallonji Mistry have made any investments in a company by the name of Ischian International Ltd nor do they have any financial interest in the company.” The statement added Laila Jehangir has been a non-resident Indian for 35 years. One of Pallonji Shapoorji Mistry’s two daughters is named Laila, and is married to fund manager Rustom Jehangir.
First Published: Thu, Jan 19 2017. 03 10 AM IST