Centre says it will investigate Pandora Papers cases

Centre says it will investigate Pandora Papers cases
A commuter walks past the building of India's Ministry of Finance during dusk in New Delhi, India, May 18, 2015. Reuters/Adnan Abidi

New Delhi: The government will investigate every Indian name appearing in an unprecedented leak of financial records, known as the 'Pandora Papers', which alleged that many world leaders have secret offshore stores of wealth.

A Multi-Agency Group made up of the tax department, Enforcement Directorate, RBI and FIU, will probe the names and the government will seek from foreign jurisdictions information about Indians in the list, CBDT said in a statement.

Anil Ambani, Vinod Adani, Jackie Shroff, Kiran Mazumdar-Shaw, Niira Radia, Sachin Tendulkar and Satish Sharma are among the Indians who figure in the 'Pandora Papers' that comprise 11.9 million confidential documents from 14 separate legal and financial services firms.

"The Government has taken note of these developments. The relevant investigative agencies would undertake an investigation in these cases and appropriate action would be taken in such cases as per law," the Central Board of Direct Taxes (CBDT) said.

With a view to ensure effective investigation in these cases, the government will also "proactively engage with foreign jurisdictions for obtaining information in respect of relevant taxpayers/entities."

The statement neither named any individual it would investigate nor gave a timeline for completing the probe.

"The Government has directed today that, investigations in cases of Pandora Papers leaks will be monitored through the Multi Agency Group, headed by the Chairman, CBDT, having representatives from CBDT, ED, RBI and FIU," it said.

The Government of India, it said, is also part of an inter-governmental group that ensures collaboration and experience sharing to effectively address tax risks associated with such leaks.

A couple of Indian names appearing in the papers have rejected allegations of financial misdoing.

Biocon Executive Chairperson Kiran Mazumdar-Shaw said her husband's offshore trust was bonafide and legitimate.

"Media stories reporting on Pandora Papers wrongly implicate my husband's offshore trust, which is a bonafide, legitimate trust and is managed by Independent Trustees. No Indian resident holds "the key" to the trust as alleged in these stories," she tweeted.

CBDT said the International Consortium of International Journalists (ICIJ) has come out with what is claimed to be a 2.94 terabyte data trove that exposes the offshore secrets of wealthy elites from more than 200 countries and territories.

The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low or no-tax jurisdictions.

"It may be noted that following earlier similar such leaks in the form of ICIJ, HSBC, Panama Papers and Paradise Papers, the Government has already enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 with an aim to curb black money, or undisclosed foreign assets and income by imposing suitable tax and penalty on such income," the tax department said.

Undisclosed credits of Rs 20,352 crore (as on September 15, 2021) have been detected in the investigations carried out in the Panama and Paradise Papers.

Stating that the media outlets part of the 'Pandora Papers' investigation have carried names of "only a few Indians (legal entities as well as individuals)" so far, CBDT said even the ICIJ website (www.icij.org) has not yet released the names and other particulars of all the entities.

The website of ICIJ suggests that information will be released in phases and structured data connected to the Pandora Papers investigation will be released only in the days to come on its Offshore Leaks Database, it added.

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