The Central Board of Direct Taxes (CBDT) has informed the Special Investigation Team (SIT) on black money that prosecution proceedings have either been completed or initiated against majority of the 628 HSBC Bank (Geneva) account-holders whose details were shared by the French government in 2011.
“Action has been taken in a large number of cases,” Justice M.B. Shah, chairperson of the Supreme Court-appointed SIT, told The Hindu over phone on Sunday. The CBDT is racing against time to meet the statutory March 31 deadline for taking action against account-holders who have allegedly stashed away unaccounted money in the Geneva branch of HSBC.
The SIT met on Saturday to review the developments and discuss further measures to curb generation, laundering and parking of black money. It discussed ways to identify the real beneficiaries of companies. When asked about it, Justice Shah said: “It will take some time...”
The Financial Action Task Force report on “Transparency and Beneficial Ownership” in October last highlighted the same issue stating that beneficial ownership information could be obscured through use of shell companies, complex ownership and multi-layered control structures.
Concealment of beneficiaries’ identity could also be done by use of informal nominee shareholders and directors, such as close associates and family, trusts and other legal arrangements, which enable a separation of legal ownership and beneficial ownership of assets and intermediaries in forming legal persons, including professional intermediaries.
“Such methods are also employed to park unaccounted money in safe havens located primarily in the British Ownership Territories like Cayman Islands, Bermuda and British Virgin Islands,” said a senior I-T official, adding that a mechanism needs to be evolved to promptly obtain actionable information on the ultimate beneficiaries of companies and trusts.
Apart from discussing ways to put a cap on cash holding and prevent use of capital gains for money laundering, trade-based methods and illegal money transfers, the SIT reviewed developments in major cases of alleged scam and corruption.
It was apprised of the progress in the Obulapuram Mining Company Private Ltd mining case allegedly involving former Karnataka Minister G. Janardhana Reddy; the Biometrix Marketing Private Ltd (Singapore) case being probed by the Enforcement Directorate on a complaint filed by eminent lawyer Prashant Bhushan regarding transfer of Rs.6,530 crore to India; Ponzi and major chit-fund scams.