Liechtenstein is a tiny landlocked principality between Switzerland and Austria. The 160 Sq. Km. country that is almost one-tenth of Delhi’s 1500 Sq. Km. is known as a tax haven and its 38000 residents owe much of its wealth to illegal financial transactions through it’s over a dozen banks and many trusts. Liechtenstein is one of the richest countries of the world with its GDP per capita ($179,478.58) being highest in the world.
Earlier this year, on March 21, Finance Minister Arun Jaitley informed the Rajya Sabha during the Question Hour that the probe into the Indian names stashing black money in Liechtenstein banks was complete and undeclared income of around Rs 6500 crore was found.
The Liechtenstein scandal broke in February 2008 when a bank employee sold incriminating data to various countries containing names of account holders. In March 2009, under Indo-Germany Double Taxation Avoidance Convention, India got a list from the German government with names and details of Indians having accounts in Liechtenstein’s LGT Bank.
Since then, there have been many reports of Indians stashing their wealth in Liechtenstein, creating controversies and becoming a source of political mud-slinging in the country. From time to time, many news organisations have dug in and published list of account holders but there had been no clear official word about it from the Government of India until the Supreme Court forced it to do so.
Though the government launched a probe on the list provided by Germany, it never looked in hurry to take it to a logical conclusion. It, in fact, desisted from making the names public in the name of confidentiality clause with Germany and even resisted the Supreme Court order for three years before finally giving in.
The Supreme Court, in its July 4, 2011 order, had clearly laid out directives to make the names in the LGT list public and to constitute a Special Investigating Team (SIT) to comprehensively investigate the black money issue while hearing a petition filed by Ram Jethmalani and five others in the Supreme Court in 2009 to direct the government to recover the money stashed by Indians in foreign banks. The petition was filed against the Union of India, the Reserve Bank of India (RBI), the Securities Exchange Board of India (SEBI), the Enforcement Directorate (ED) and the Central Board of Direct Taxes (CBDT).
On April 29, 2014, then Manmohan Singh’s United Progressive Alliance (UPA) government, submitted an affidavit the Supreme Court revealing names of 18 people. The affidavit also named the trusts involved. While prosecution had been initiated against them, the centre also informed the court that it had found no grounds of tax evasion in eight other cases and requested not to make them public.
Ambrunova Trust and Marline Management: Manoj Dhupelia and Rupal Dhupelia, Bhavya Manoj Dhupelia, Mohan Manoj Dhupelia, Ambrish Manoj Dhupelia
Manichi Trust: Hasmuk Ishwarlal Gandhi, Chintan Hasmukh Gandhi, Madhu Hasmukh Gandhi, Late Mirav Hasmukh Gandhi
Ruvisha Trust: Rajesh Chandrakant Gandhi, Chandrakant Ishwarlal Gandhi, Viraj Chandrakant Gandhi, Dhanalaxmi Chandrakant Gandhi
Dainese Stiftung Trust: Arunkumar Ramniklal Mehta
Dryade Satiftunf Trust: Harshad Ramnikal Mehta
Webster Foundation: KM Mammen
Urvashi Foundation: Arun Kochhar
Raj Foundation: Ashok Jaipuria
WHAT CENTRE SAID IN ITS AFFIDAVIT
“It is respectfully submitted that the information regarding deposits/outstanding amounts in the accounts maintained by 12 trusties/entities with LGT bank in Liechtenstein was received by government from German tax authorities in March 2009 under the Indo-Germany Double Taxation Avoidance Convention.”
“The 12 trusts/entities involved 26 individuals of Indian origin. Out of the 26 cases, investigations in 18 cases have been concluded by the I-T department and prosecutions have been launched in 17 cases (one tax payer has expired).”
BLACK MONEY SIT
But the UPA government still did not come up with any word on forming the black money SIT. It, in fact, tried all to kill the issue. First it resisted any notion of forming the SIT during hearings but when it failed, the government filed an application to recall the entire 2011 verdict which was also dismissed by the apex court on March 26, 2014. But to stall the SIT formation, the UPA government again filed a review petition on May 8, 2014. It was also bound to be dismissed by the Supreme Court as it too had highlighted the same grounds as in its earlier appeals.
The 2014 parliamentary elections ousted the Manmohan government and Delhi’s power corridors were replaced by the National Democratic Alliance (NDA) government led by Narendra Modi which, in its first official decision, constituted the black money SIT to headed by Justice (Retd.) M.B. Shah.