By IANS,
New Delhi : The Supreme Court is to hear Wednesday a lawsuit seeking direction to the government to take steps to retrieve Indian black money worth an estimated Rs.70,00,000 crore stashed in foreign banks.
A bench of Chief Justice K.G. Balakrishnan decided to accord an urgent hearing to the public interest lawsuit after senior counsel Anil B. Divan Tuesday apprised the court of it and sought an early hearing.
The lawsuit filed jointly by former central law minister Ram Jethmalani, former Lok Sabha secretary general Subhash C. Kashyap, former Punjab police chief K.P.S. Gill and others seeks directions to the government to take steps on the lines of those taken by the US and some other western nations to retrieve their wealth secretly stashed in various tax havens and banks like UBS of Switzerland.
Repatriating black money Indians have deposited in tax havens has become a major issue in the election campaign with Bharatiya Janata party (BJP) leader L.K. Advani raising the demand.
The lawsuit was based on a research article written by Indian Institute of Management-Bangalore professor E. Vaidyanathan for the IIM-B’s journal Eternal India.
In his write-up, Vaidyanathn estimated that “between 2002 to 2006, $1.4 billion, roughly equivalent to Rs.70,00,000 crore (Rs 70 trillion) have been siphoned off from this country and stashed away in foreign banks”.
Pointing out that the Indian government is fully aware of the offshore flight of country’s money, the lawsuit said that former finance minister and present Home Minister P. Chidambaram has publicly acknowledged this fact, and also admitted it in a communication to Leader of Opposition Advani.
The lawsuit said that despite this admission, the government has taken no steps to retrieve the Indian black money stashed abroad by tax evaders.
It also noted “the fact that influential politicians of the most of the political parties are involved in the offence”.
Detailing various steps the US has taken at retrieving its money stashed in UBS, the lawsuit said the US government in June 2008 took a multi-pronged initiative to identify its citizens having secret accounts in the Swiss bank.
It said the US authorities initiated court proceedings against Raoul Weil, who headed the bank’s operation in the US, and a Florida court indicted him and declared him fugitive for colluding with wealthy Americans to hide their assets to avoid paying taxes.
The lawsuit said the UBS subsequently in February 2009, on threat of prosecution, agreed to pay the US a fine of $780 millions as per a “deferred prosecution agreement”.
This agreement binds UBS to reveal all details about the hidden assets of US citizens within 18 months, said the lawsuit, while seeking similar actions from the Indian government.
The lawsuit also pointed out that UBS is also operating in India since 1990 in the name style of UBS Security India Private Limited.
It said “the Reserve bank of India, having some knowledge of the dubious character of this bank, stopped it from extending its banking operation in India in December 2007 by refusing to permit its takeover of the Standard Charted Mutual Fund business”.
The lawsuit said the government suspected UBS had a role in triggering the 2004 stock market crash in India and the Securities and Exchange Board of India (SEBI) had barred it from issuing Participatory Notes.
“But the SEBI’s decision was set aside by the Security Appellate Tribunal in September 2007 and the UBS continues to enjoy the cooperation fo the government of India, which has taken no action against it,” said the lawsuit.