Some 11 million leaked documents of Mossack Fonseca, the Panama law firm which typically acts as agents for tax evaders and money launderers from around the world to set up offshore companies, are truly the WikiLeaks of the world of shady finance. They are clear and unambiguous about the names of the rich and famous from various walks of life — high politics, high business, exalted levels of government, and the world of sports and art — from around the world.
From India, 500 names have turned up in the Panama Papers, the records accessed by the Munich newspaper Suddeutsche Zeitung which collaborated with the International Consortium of Investigative Journalists and 100 media organisations internationally, including in this country. Some of these include individuals whose proximity to Prime Minister Narendra Modi and his party is the envy of many a buccaneer.
These are not entities that have, let’s say, simply defaulted on governmental arrears. These are the crème de la crème of many countries who have calculatedly dodged taxes — typically on money made in irregular ways — and have attached such funds in devious, layered ways intended to conceal ownership, to companies of doubtful provenance, or have established such companies.
Evidently, law-abiding individuals and businesses will have no need to look for ways to conceal their income and tax liability, park such funds in tax havens, and frequently organise the return of such money — the process is known as “round-tripping” — to India after being laundered clean. The sums involved will run into lakhs of crore rupees.
Seeking to engage in damage control after the publication of the Panama Papers, the government announced the creation of a multi-agency expert group to get on to the offshore funds trail. Finance minister Arun Jaitley has threatened to take firm action against those who did not avail themselves of the compliance window offered by the government and pressed on with their financial “adventurism”.
However well-intended, this is unlikely to convince a sceptical public grown inured to the crooked ways of the well-heeled, many of whom are lionised by the government. In 2011, the Manmohan Singh government moved against those whose names had been revealed in the case of HSBC accounts in Switzerland. But evidently no one has got to the bottom of that story. To unravel the truth in the Panama Papers case will also take years, possibly a generation.
If the government is serious about tackling black money, it can hold out the threat of pre-emptive attachment of high-value assets of alleged wrong-doers which could be kept in an escrow-type account supervised by the judiciary until suspicions have lifted. The Supreme Court could play a role of some importance in instructing the government to be serious.
