Indian Government to Investigate Cases Revealed in Pandora Papers

On Sunday, the International Consortium of International Journalists (ICIJ) revealed offshore "secrets" of wealthy elites from more than 200 countries. The investigation, dubbed the Pandora Papers, includes nearly 12 million leaked files revealing 29,000 off-the-shelf companies and private trusts set up by 14 global corporate services firms.

The Indian Finance Ministry has promised a probe into the dealings unearthed by the Pandora Papers, the latest leak of offshore financial records of some of the world’s richest and most powerful people, adding that appropriate action would be taken in such cases according to the law.

“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 federal government is also part of an Inter-Governmental Group that ensures collaboration and experience sharing to effectively address tax risks associated with such leaks”.

“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 statement further read.

The federal Finance Ministry said that the names of only a few Indians (legal entities as well as individuals) have appeared so far in the media and even the ICIJ website 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 published only in the coming days on its Offshore Leaks Database.

As per the ministry, the investigation will be monitored through the Multi-Agency Group (MAG), headed by the chairman of the Central Board of Direct Taxation (CBDT). There will be representations from the Enforcement Directorate, the Reserve Bank of India, and the Financial Intelligence Unit – India (FIU - India).

More than 300 Indian businessmen are said to have used complex offshore trusts to hide assets, according to the Pandora Papers.

The investigation was carried out by the International Consortium of Investigative Journalists (ICIJ), which involved The Indian Express in India, among some 150 media outlets.

According to a report in The Indian Express, the Pandora Papers leak is “a one-year investigation of data linked to India… reveals how individuals and businesses, many already under the scanner, are pushing the envelope to evade detection, using loopholes in the law at home and the lax jurisdiction of tax havens”.

The report notes that while there are over 300 Indian names in the leaked data, the offshore holdings of as many as “60 prominent individuals and companies” will be revealed in the coming days.