From Panama scandal to Paradise papers, it will continue to suppress, misinterpret and delay the probe on tax evasion.



The more Prime Minister Narendra Modi claims to expose and target black money, the more it is found laundered to overseas tax havens by India’s influential businessmen, wealthy traders, and unscrupulous tax lawyers. In the case of Panama Papers, the International Consortium of Investigative Journalists (ICIJ), with which The Indian Express was linked, published in February 2015 a list of 500 Indians who had routed sums to Panama, especially in the German-run bank Mossack Fonseca, which laundered hidden foreign wealth.

In the first list of 100 Indians, the total accumulated wealth was estimated to be Rs 16,200 crore. Both Ambani brothers were listed as having more than $3 million each. However, the prime minister took no special interest in this matter. Slowly, interest in the investigation waned and the ICIJ information was swept under the rug.

In other countries, for example, the prime minister of Iceland had to resign, fingers were pointed at Nawaz Sharif, the prime minister of Pakistan, and even a cellist supposedly known to president Vladimir Putin was allegedly involved in the Panama scandal. In India, the political elite pretended nothing much had happened. If we extrapolate from the Rs 16,200 crore linked to the first 100 names and multiply this sum by five, the 500 names’ joint wealth would amount to Rs 86,000 crore, which would have been a useful contribution to the Indian exchequer. But the mammoth controversy was suppressed.

sinha-small_11061703_110817101824.jpgAmong the other politicians who appeared on the list are BJP MP and Union minister Jayant Sinha, and BJP Rajya Sabha MP RK Sinha whose name appears in the Malta list. Photo: PTI

This week, The Indian Express reported another huge scam, but in Bermuda not Panama. India ranked 19th in the list of 180 countries whose investors parked huge funds in offshore tax havens. There are 714 Indians in the tally, some 214 more that the Panama Papers list.

Sun Group, an Indian company founded by Nand Lal Khemka, figures in the Paradise Papers as the firm with the largest number of offshore entitites in the files of the 119-year-old law firm Appleby, which helps clients avoid and evade taxes, manage real estate assets, open escrow accounts, purchase airplanes and yachts by paying low tax rates; or simply use offshore vehicles to move millions of dollars across the globe.

Some of Appleby’s other Indian clients have come under the scrutiny of the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) with cases such as Sun-TV-Aircel-Maxis, SNC-Lavalin and Ziquista Health Care (former Union minister Sachin Pilot and former Union minister P Chidambaram’s son Karti were early honorary/independent directors of the firm).

Among those with investments offshore is actor Amitabh Bachchan. However, his shareholding in a Bermuda company is legal because it was acquired prior to a 2004 scheme. Among the other politicians who appeared on the list are BJP MP and Union minister Jayant Sinha, and BJP Rajya Sabha MP RK Sinha whose name appears in the Malta list.

In other words, there is a large trove of evidence that brings us to the moot point: will anything significant happen? The Panama Papers scam was not probed in spirit by the Modi government in 2015.

fonseca_110817102236.jpgICIJ, in February 2015, published a list of 500 Indians who had routed sums to Panama, especially in the German-run bank Mossack Fonseca, which laundered hidden foreign wealth. Photo: Reuters

The stakes are even higher now with the upcoming election campaign for the 2019 general election, and its outcome.

Modi government will suppress, misinterpret and delay the investigation. Some in the Congress will also be nervous. But a country with India’s maxim, Satyamev Jayate (the truth will triumph), must learn to overcome such limited embarrassments and cleanse the offshore havens where Indian money is misused for illegitimate profit instead of taxes to benefit the poor and needy.

The political class will have to be firm with acting against tax evasions. Black money is indeed blackening. It is used for evading tax, spreading crime, buying votes and empowering those who violate the law.

There cannot be good governance in India if duly instituted taxes are evaded. But regardless of Panama or Paradise Papers, will the major political parties rise to the occasion?