Millennium Post

Panama leaks: Probe to determine legitimacy of accounts, says Rajan

Asserting that there could be genuine reasons for having offshore accounts, Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday said the multi-agency probe will look into the legitimacy of such holdings of Indians named in the leaked Panama list.

The RBI is part of the multi-agency group announced by the government on Monday to probe the list, which has nearly 500 Indians, including celebrities and industrialists.

“We are obviously part of the investigative team that is going to look into this matter. It is important to note that there are legitimate reasons to have accounts outside,” he said, after unveiling first bi-monthly policy for 2016-17.

“The LRS scheme allows you to take money outside. Yet to see what is legitimate and what is not legitimate. That’s the process of investigation that will take place,” he said.

Under the Liberalised Remittance Scheme (LRS), all resident individuals, including minors, are allowed to freely remit up to $2,50,000 per financial year for any permissible current or capital account transaction or a combination of both.

Finance Minister Arun Jaitley had on Monday said that Prime Minister Narendra Modi had discussed the issue with him on Tuesday morning and on his advise the group was set up, which includes officials from CBDT, RBI and FIU (Financial Intelligence Unit).

The leading national daily had carried a report based on leaked documents of a Panama law firm Mossack Fonseca, which is said to feature links of over 500 Indians to offshore firms. The newspaper claimed that the list included foundations and trusts and passport details of 234 Indians.

Speaking on the issue, RBI Deputy Governor HR Khan said there were 2-3 issues involved in the issue. “Under FEMA, a few things are permitted and a few are not. So the investigation will reveal what is legitimate,” Khan added.

The Special Investigation Team (SIT) on black money on Monday said that it would thoroughly investigate the Panama Papers issue.

“Investigations are being carried out. We are going to investigate it (the list) thoroughly,” SIT Chairman Justice (retd) MB Shah had said.

Big B dismisses link with offshore firms
Bollywood megastar Amitabh Bachchan, whose name figured in the Panama Paper leaks as allegedly having links with offshore entities in two tax havens, on Tuesday denied connection with those companies, saying his name may have been “misused”.

He also claimed that even the news report had not suggested any wrongdoing on his part. The Indian Express had on Monday carried a report based on leaked documents of a Panama-based law firm Mossack Fonseca, which is said to feature links of over 500 Indians to firms and accounts in offshore tax havens.

Referring to the report, Bachchan, 73, said: “I do not know any of the companies referred to by Indian Express – Sea Bulk Shipping Company Ltd, Lady Shipping Ltd, Treasure Shipping Ltd, and Tramp Shipping Ltd. I have never been a director of any of the above stated companies. It is possible that my name has been misused.”

He added: “I have paid all my taxes, including on monies spent by me overseas. Monies that I have remitted overseas have been in compliance with law, including remittances through Liberalised Remittance Scheme (LRS), after paying Indian taxes. 

In any event the news report in Indian Express does not even suggest any illegality on my part.” 

The names of his daughter-in-law Aishwarya Rai, her parents and brother also figured in the leaked documents as being directors in a firm in the British Virgin Islands.

The newspaper quoted her media adviser Archana Sadanand, who raised questions about the International Consortium of Investigating Journalists and said all information the paper had was false.
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