Three from the list of 700, which was shared by France, disclose bank’s modus operandi
India Against Corruption (IAC) released on Friday “the modus operandi” for transfer of undisclosed funds to Swiss banks as disclosed in the statements of three persons who had opened accounts in Dubai, Zurich and Geneva with HSBC Bank. They were named in a list of 700, which was shared by the French government in a compact disc with the Indian government last year.
The names of the 10 VIPs, including the Ambanis, Congress MP Anu Tandon, Jet Airways chief Naresh Goyal and the Burman brothers of the Dabur Group, were among the 700 whose names were not revealed by the government. The accounts held by them pertained to 2006.
IAC members Arvind Kejriwal and Prashant Bhushan said Parminder Singh Kalra and Praveen Sawhney, who gave their statements, were based in Delhi, while the third person, Vikram Dhirani, was from Ghaziabad.
The persons, who were questioned under Section 132 (4)/133A of the Income Tax Act, 1961, revealed the modus operandi of the “underground banking” system or the ‘hawala’ network (money transferred but not moved).
As per the papers released by IAC at a press conference here, Mr. Dhirani said in his deposition that he had opened an account with HSBC in Dubai in 2005 and closed it in 2006. A bank representative came to him in Delhi to open an account. He did not travel to Dubai for opening or operating it. The formalities was completed in Delhi. He agreed that a person authorised by bank officials would collect the cash from him, which would show up in his HSBC account in Dubai. After the money was deposited, Mr. Dhirani was given a confirmation. However, no document was given.
IAC said the statement revealed that Mr. Dhirani told income tax officials that he had deposited about Rs. 12 crore in alleged unaccounted income in the Dubai account over a period of time. The account was closed in 2006, and the money was withdrawn and given to him in Delhi. Neither did he go to Dubai to collect the cash, nor did he arrange for his representative to take the cash on his behalf. “The bank officials arranged for delivery of cash… in India.”
According to IAC, Mr. Kalra opened an account with HSBC, Zurich, on the advice of a Swiss investment consultant based in Zurich. To make deposits of undisclosed money to the tune of Rs. 8 crore-Rs. 9 crore, he gave the cash in instalments to a person in Delhi. Every time, a different person came to collect the cash for being remitted in the Zurich branch of HSBC. The account was closed in 2008-09 even while he remained in Delhi.
“The statement shows,” Mr. Kejriwal said, “that bank officials are providing illegal channels for transfer of cash from their client account-holder in Delhi to Zurich and vice versa.”
He said Mr. Sawhney, who had opened an account with HSBC, Geneva, told income tax officials that his father had transferred $ 1.8 million to this account. “Regarding the modus operandi for withdrawal of money, Mr. Sawhney said he used to call the bank officials in Geneva who would arrange for delivery of cash in India through their agents in the hawala channel. All discussions with the bank officials were on the phone. Every time he asked for cash, a different person used to come to deliver it and he knew none of them.”
Keywords: Kejriwal allegations, Swiss bank accounts, tax evasion, Ambani brothers, anti-corruption movement, black money issue
@vijayanand,
To say that the person who exposes/whistle blower has to also provide solution is not a progressive suggestion either. Then what is the govt doing? Is the govt. not accountable? I think this is the reason why India has not progressed in dealing with corruption. If learned citizens like you are not even patient enough to support, how come more gullible citizens will fair against biased media and politicians. Why don't you do your part by at least questioning the govt, as you are part of the same people who elected the govt.
Going by your example, Hindu's way of highlighting issues (like Bofors) has resulted in nothing but alot of money spent public money spent on court cases. Did anyone get arrested or did we get the money back? Our conviction is so pathetic that India will become crime haven and also has a potential to become tax haven. No wonder somebody called us banana republic, we have huge potential in being an offshore tax haven for tax evading FDIs.
@Mr.Siddharth, The Hindu highlights many issues in sunday supplementary by not making corruption allegations. I think that is the real service to humanity than nation. Because, reading those, atleast i donate something to underprivileged whenever i can. Only time (not me) will tell whether kejriwal is doing service to nation or to his political career. But, given the circumstances in society now, honestly i don't think kejriwal is doing any service. Because, there are some parties which started as social organisation just like making corruption allegations like what kejriwal is doing now. But when those parties came to power, were not any different, when it comes to corruption. The problem is not with such parties, but with the mindset of people. The problem or solution doesn't lie with govt, but with the society. Because Govt is just representation of society. you asked me for the solution. My solution or answer is, let the change to become good human-being come within each individual
HSBC has set aside $1.5 billion to settle criminal charges of money-laundering in the USA, though the final penalty could be much higher. The US Senate in a report said "HSBC exposed the US financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering controls." HSBC is an established name for committing fraud in the banking industry. Somebody rightly said "It happens only in India."
Some one has asked for a solution to a kind of problem that may not exist in any other country. Mountains of 'cash' kept at home, moving around the globe?
Indian DNA reeks of corruption - every single soul from India is so corrupt and even a prayer to any God revolves around 'money', 'cash'. This was not the case some 30 years ago.
The only solution left for India is for it to be recolonized. It will be in interest of the country and the common man on the street (there are over 800 million of them!). It is another question which country will willingly take over such a cauldrum, in a state of decay and corruption.
Still cannot fathom so much cash is in circulation in a world where, all goods and services are paid for electronically.
@ Mr. vijayanand - Don't you think Mr. Kejriwal is doing enough service to our nation
by questioning, why do you expect him to provide solutions as well? What's the job
of Union Govt. then? Do you want people to keep quiet and not question in case they
don't have answers?
Issues known or unknown, need to be highlighted at any cost. Why are you just
interested in hearing solutions, why don't come up with one?
Mr Kejriwal, All of us know there are problems, everywhere! so, what we are interested to hear is effective solution. do you have one? Seeing your enthusiasm in making only allegations, it seems you yourself is not interested in finding a long-term effective solution that would radically bring change in our society.
In their keenness to drive a wedge between political parties and s very apparent desire to discredit the major parties, the Congress and the BJP, the IAC under Arvind Kejriwal seem to be biting off more than they can chew. The exposes are slowly losing sting and the latest one on Swiss bank accounts is just leading up a blind alley or firing a shot in the dark. It is time Arvind and his team do more home work and produce hard facts that cannot be challenged as that would add more fizz to their political campaign as well.
Not sure why do you think it is heresay- nukkad. He is not giving opinions, but providing the facts. Even if a single minister would have been as strong as AK, India would have been much better.
Any individual or institution flagrantly violating extant law of the land should be stringently punished irrespective of their standing.Law of the Land should reign supreme.
Open blame, Open lies ... where's action? make sure that every drop of our resource is properly accounted for in the benefit of citizens.
Open blame is the First step.
There must be some truth in Kejriwal's statement. Here is a report from the U.K.
HSBC bank says it is looking into allegations that criminals have used offshore accounts at its Jersey operation for money laundering. The bank issued a statement after the Daily Telegraph newspaper said it was at the centre of a major investigation by HM Revenue and Customs. It is reported that the 4,000 offshore account holders include a well-known drug dealer living in Central America, bankers who face allegations of fraud and a man once dubbed London's "number two crook.
Earlier this year, a US Senate report alleged that staff at HSBC's global operations had laundered billions of dollars for drug cartels and terrorists in a "pervasively polluted" culture that persisted for years. The report detailed how HSBC's subsidiaries cleared suspicious travellers' cheques worth billions, and allowed Mexican drug lords to buy planes with money laundered through Cayman Islands accounts.
We had heard about the hawala transactions and tax havens in
Switzerland. The current allegations, at least, deserve a formal
enquiry. Also see that, if you make allegations as publicly as Mr.
Kejriwal, without having proper documents to support your claim, you
wouldn't be a free man. Please do read documents too which he offers
after making an allegation before calling him a nukkad chatter.
Amazingly there is no real allegation of any wrongdoing by HSBC - officially. Just opening and closing accounts is very normal for any bank, and that is between the customer and the organization, just business. Being able to transfer money through havala transactions does not take a bank. As always the IAC movement is just making noise. HSBC will not have even a strand of hair ruffled by this sort of finger pointing. How an account is opened in another country while the customer never went there may raise suspicion in India, but there is certainly plenty of legally open opportunity for doing so in many countries. Since havala transactions carry on without any disturbance on our own soil, in cash, there is no way any legislation can stop it. It is high time the government woke up to this simple fact.
Forex companies too use HSBC bank. They open accounts in Dubai for
persons based in India and they convert Rupees to dollars to be
deposited there. This is illegal, but many people involved in forex
trading are into this.
Obama has put up a LOT of pressure on HSBC to reveal the illegal account
details. Why Indian Govt doesn't take that step?
I feel as if we are living in renaissance. And hope to see all good valued and ethics working on ground level in India. These disclousre shows that how much deep rooted problem is there in India.
These are only the tip of the iceberg.Corporates and politicians are
accumulating huge wealth,which 'mango men' and the 'cattle class' can
never comprehend.The govt,the investigating agencies and the looters
seem to work in tandem.If an official goes abroad to 'collect'
information,many 'managers' are already there busy ensuring that we
don't get the information.
While most of what Kejriwal is saying is akin to heresay- nukkad chatting, allegations against HSBC are substantiated by statements given by 3 persons. Thourough investigation into operations of HSBC is warranted
Permitting hoarding of 'black money' (undeclared source of income,
non-payment of tax etc), at home or in tax havens abroad, is
grotesquely iniquitous to ALL law-abiding tax payers in a country,
besides being open to abuse by groups capable of immense harm to a
country, eg terrorists, drug dealers etc.
To suggest that 'black money' facilitates FII/FDI, investment in and
growth of national economy, is akin to saying hoodlums and gangsters
are essential to maintaining 'law and order' in society! Such a
suggestion must raise deep suspicion about whether the protagonist is
an 'interested party' benefiting from such an unlawful arrangement.
Stamping out these practices ought to be seen as a primary PUBLIC DUTY
by all politicians, on a non-partisan basis, in any civilised society.
Those at a loss about how to go about this complex area can always
learn from the mistakes of countries such as US, UK etc. Inaction is
inexcusable.
THE ONUS FOR NON-ACTION CAN ONLY BE ON THE GOVT OF THE DAY.
What cannot be cured must be endured.The countrymen are tolerating so much. Let us look the other way round and give ourselves the illusion that all is well and proper. Recognize the reality that powerful interests are at work here.The legal process is cumbersome, dilatory, erratic and expensive. The government is unable to plug the exodus of money gained through tax evasion, under-invoicing, commissions on sale and purchase, etc. It would be in public interest to let them deposit this money in banks at home. At least there would be some restraints. The depositors will not have to go all the way to Switzerland to hide the money there, and to use devious means to get it back or squander it fearlessly. They will get higher rate of interest in India. Indian banks can lend this money for performing socially useful productive tasks in India itself.
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