A multi-country, multi-year investigation by an International Consortium of Investigative Journalists (ICIJ) into the identities of thousands of Swiss account holders has the potential to raise yet another political storm in India. The laundry list published by The Indian Express today (9 February) discloses the names of several prominent businessmen and women, many Indian politicians, especially Congress-linked ones, and ex-bureaucrats, among others.

Apart from the political storm it will raise, it is now more than likely that the Special Investigative Team (SIT) set up by the Supreme Court, which is already investigating the details of 628 Swiss accounts held with the HSBC by Indians, will have an extended tenure.

While the overall list put out today is global, what will interest us is the Indian contingent mentioned in it. The Express story says there are 1,195 Indian names with Swiss account balances adding up to Rs 25,420 crore – which is just over $4 billion at current exchange rates. (Read the full Express story and the big names on the list here). The HSBC list was stolen in 2008 and disclosed to the French authorities, who then handed over a part of it to the Indian government in 2011. Names of half the list are already with the SIT, and the tax authorities have already begun collecting the tax dues.

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The gross account balances of all the global account holders is mentioned at $102 billion, which suggests that India-linked accounts were around four percent of the total.

The political names on the list include former UPA minister Preneet Kaur, ex-Congress MP Annu Tandon, the family members of late Congress minister and Gandhi family loyalist Vasant Sathe, and Narayan Rane, his wife and family (ex-Sena, now in Congress). A more direct link to the Sena is Smita Thackeray, daughter-in-law of Bal Thackeray.

The businesspersons mentioned in the list include (in alphabetical order) the Ambani brothers, a branch of the Birlas (Yash), the Burmans (of Dabur), the Chhabrias (of Shaw Wallace), the Dalmias (several branches of the family), Naresh Goyal (of Jet Airways), Shravan Gupta (Emaar MGF), the Nandas (of Escorts), the Neotias (ex-Gujarat Ambuja), Swraj Paul (an Indian-origin UK citizen), the Rahejas (builders and realtors) Salgaokars, and several diamond traders. Some of the accounts are corporate accounts, others belong to Indians who may not be subject to Indian laws, and several others have minuscule balances in their accounts.

The Express report claims 276 Indian names with over $1 million in account balances. But a few caveats are in order.

First, the names and account balances relate to 2006-07, eight years before today. So while the people can be traced, the accounts themselves may not exist today. However, to the extent they were in contravention of Indian laws of that time, the account holders can be prosecuted and asked to explain.

Second, not all accounts may be illegitimate or involved in stashing black money. Businessmen with global operations, subsidiaries or export-import operations, and NRIs living abroad can legitimately operate Swiss accounts. Mukesh Ambani’s Reliance Group, which owns Network 18 and is the publisher of Firstpost, has said that “neither RIL nor Mr Mukesh Ambani have or had any illegitimate bank accounts anywhere in the world.” The Express report has denials by some other people mentioned in the report, while some said they had settled with the taxman when queries were raised.

Third, the account details may be both underestimated and overestimated. The rupee value of Swiss balances may be overstated today because the rupee has depreciated quite a bit since 2006-07. So 2006-07 balances may be overestimated in rupee terms. On the other hand, the accounts disclosed may represent only the tip of the iceberg: what we have is only 1,195 names – which itself was not the complete HSBC list – and there could be other accounts in other Swiss banks, not to speak of other tax havens.

Four, some accounts may reach a dead end. The SIT found that nearly half the 628 names it had received earlier had zero balances. In the total list of 628, the SIT found that 201 were non-residents or were otherwise untraceable, and 289 accounts had zero balances. This means only 339 persons can be tracked or queried for violations of Indian laws.

The taxman says that around Rs 3,150 crore lying in some of the accounts for which it had information earlier may be forced to pay taxes or penalties, or even face prosecution. The addition of 567 new names from the Express investigation is unlikely to lead to any great amount of tax collection, especially if some of the accounts with big balances are actually legitimate.

However, the International Consortium of Investigative Journalists (ICIJ) and the Indian Express need to be complimented for their dogged search for names of Swiss account holders. The investigation will help put the fear of god in wrong-doers, and hopefully make it tougher for tax evaders to continue with their nefarious activities in future.


Black money chase: Tycoons, netas dominate HSBC list of 1,195 Swiss account holders