Panama Papers: Raghuram Rajan says probe will determine legitimacy of accounts

05 Apr 2016


RBI governor Raghuram Rajan today said the probe into the leaked `Panama Papers' that propped up names of around 500 Indians, including well known figures, will establish the legitimacy of such holdings.

At the same time, the RBI governor asserted that there could be genuine reasons for having offshore accounts.

The leak of the `Panama Papers, has turned into the world's biggest data leak dragging names of politicians, entertainers, sports persons and others from across the world who have allegedly dealt with Mossack Fonesca, the Panama-based law firm in opening an offshore company and stashing away wealth.

The Reserve Bank is part of the multi-agency group announced by the government yesterday 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 said yesterday that Prime Minister Narendra Modi discussed the issue with him this morning and on his advise the group has been set up, which includes officials from CBDT, RBI and FIU (Financial Intelligence Unit).

The Indian Express 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 H R Khan said there are 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 said yesterday that it will investigate thoroughly the Panama Papers issue.

"Investigations are being carried out. We are going to investigate it (the list) thoroughly," SIT chairman Justice (retd) M B Shah had said.

Meanwhile reports said the names that are alleged to have appeared in the leaked list include those of Amitabh Bachchan and his daughter-in-law Aishwarya Bachchan, DLF owner KP Singh, owner of Mehrasons Jewellers Ashwani Kumar Mehra and his family members, industrialists Gautam and Karan Thapar, businessmen Satish Govind Samtani, Vishlav Bahadur, Harish Mohnani, Ashok Malhotra, Ranjeev Dahuja and Kapil Sain Goel of Bealls International Corporation and agriculture equipments seller Vivek Jain.

A retired MP government official Prabhash Sankhla, Apollo Group chairman Onkar Kanwar, Goa-based mining baron Anil Salgaonkar, Cyrus Poonawalla's brother Zavari Poonawalla, Harish Salve and former Attorney General Soli Sorabjee's son Jahangir  also appear in the list, says the reports.

The names of politicians like Shishir Bajoria and Anurag Kejriwal as also that of Mumbai-based gangster Iqbal Mirchi who died in the UK in 2013, also have allegedly come up in the list as alleged account holders.

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