India steps up black money hunt; seeks Swiss details of over 10 persons

New Delhi: Stepping up its hunt for black money stashed abroad, India has approached Switzerland for banking details of at least ten persons and entities suspected to have kept untaxed money in Swiss banks.

These include two listed textile companies, while others are associated with an art curator and his carpet export business.

Switzerland's tax department issued notices to them last week to reply within 30 days to appeal the decision about providing 'administrative assistance' in information requests from India.

Under its local rules, Switzerland provides a final chance to the concerned persons and entities before sharing the information about suspected cases of tax crimes with any foreign jurisdiction. These notices are made public through gazette notifications if they are not reachable directly by the concerned banks or the tax department.

At least ten such notices concerning individuals and companies with Indian links were issued last week -- which could be the highest for a country within a week.

The notices name two listed textile firms -- Neo Corporation International and SEL Manufacturing Company Ltd.

There are also some companies incorporated in tax havens like Panama and British Virgin Islands. Most of the companies and individuals are associated with a carpet export business and an art curator with operations across several countries.

These are Abdul Rashid Mir, Amir Mir, Sabeha Mir, Mujeeb Mir and Tabassum Mir. The companies named in these notices include Cottage Industries Exposition, Modale SA and Progress Ventures Group.

Some of these names had figured in the leaked Panama Papers too, but several of them including the two listed firms have denied any wrongdoing.

Earlier, the notices were issued by Switzerland's Federal Tax Administration (FTA) asking some of them to designate a representative to exercise their "right to be heard" before the assistance is extended to India.

India has been seeking "administrative assistance", including access to bank account details of the persons and the companies suspected to have stashed undisclosed funds in banks in Switzerland, after furnishing some evidence to justify the suspicion.

As per the local law, Switzerland gives an opportunity to the entity concerned to challenge the sharing of information, before providing the assistance to the requesting nation.

The Swiss notices mention the names of individuals, their nationality and dates of birth. In case of companies, their names and the countries of incorporation are mentioned.

India has shot off 'administrative assistance' requests to Switzerland in several cases in recent months seeking details of Indians suspected to have misused Swiss banks' famed high-secrecy walls to evade taxes.

The individuals and companies about whom India has earlier sought information include some listed companies, former CEO of a real estate major, wife of a Delhi-based former bureaucrat, a Dubai-based Indian origin investment banker, a high-profile fugitive along with his wife and an UAE-based holding company, as also some Gujarati businessmen settled abroad and presumably in trading business.

Many of these are suspected to have maintained accounts in Swiss banks through offshore entities, including in Panama and British Virgin Islands.

These requests for 'administrative assistance', which typically involves exchange of information on submission of proof by the requesting country about the account holder's wrongdoing, have been documented by Swiss authorities in their Federal Gazette as per local laws to give the concerned person or entity a last chance to appeal against sharing of data.

While India and Switzerland last year signed a new pact for automatic exchange of information about account details from next year, so far the requests have been made under their existing bilateral tax treaty.

In the past also, names of some Indian nationals figured in Switzerland's Federal Gazette notifications after the Swiss authorities were approached by India for information about those people with regard to the pending tax-related probes against them.

After following the due process prescribed under Swiss law, the information has been shared by Switzerland with India in some cases, pursuant to which the Indian authorities -- including the tax department and Enforcement Directorate -- have proceeded with their prosecution and other actions.

However, the pace of seeking such details seems to have quickened, going by the sudden spurt in the number of Indian names figuring in such notifications.

For long, Switzerland has been known for strict secrecy clauses about details of foreigners having accounts in Swiss banks. However, under growing global pressure, Switzerland has begun sharing information in cases where other countries have been able to present some evidence of suspected illegalities.