Excerpts from the Writ Petition of Dr. Subramanian Swamy considered by Hon'ble SC and referred to Govt. for action: (The full text of the WP No. 176 of 2009 is at https://jumpshare.com/v/IufQnnMbZU8eHouyenbA )
7. The Applicant (Dr. Swamy) has made some small independent beginnings into identifying and dealing with individual cases of prima facie corruption and money laundering that have come to his knowledge.
(a)On November 28, 2011 and December 7, 2011, this Intervenor as Chairman of the 16 eminent members’ Action Committee Against Corruption in India [ACACI] had sent written complaints to the then Director CBI, New Delhi, Mr. A.P. Singh, with particular references to disclosure of offences committed under the Prevention of Corruption Act (PCA).
(b)The Enforcement Directorate was also sent a Complaint regarding the offences alleged to have been committed under PMLA and FEMA.
(c)By his letter dated 9.7.2014, the information in the said Complaints , was also supplied by letter to the SIT as follows:
Source: Schweizer Illustriete, Nov. 1991
(i)the First information so supplied was from an article published in the reputed Swiss monthly Schweizer Illustrierte , November 1991 issue, which magazine is a highly respected and widely circulated magazine in German language, and published in Switzerland. This information disclosed that the former Prime Minister, Mr. Rajiv Gandhi (now deceased), had about $2 billion in secret bank accounts in Switzerland, (an amount which is clearly disproportionate to his known sources of income as per his affidavit filed with his nomination papers upon becoming a candidate for Lok Sabha elections in 1991). This attracts section 13(1(e) of the PCA. Although the information is two decades old, the Director CBI was well aware that there is no time limitation on corruption cases under the PCA. But since Shri Rajiv Gandhi is now deceased, his most likely beneficiaries are his wife, Sonia, and two children, two of whom are public servants.
(ii)The second information sent to SIT was from Dr. Yevgenia Albats, a Russian scholar who holds a Harvard Ph.D, and who was a member of the Inquiry Commission into KGB Activities, appointed by President Yeltsin of Russia. She subsequently authored a book titled: A State Within a State: KGB in Soviet Union. In that book, she disclosed the File Numbers containing evidence of the KGB payments to the then Prime Minister Rajiv Gandhi and his family members.
(iii)This disclosure was confirmed by the spokesperson of the FIS, the KGB’s successor spy agency (equivalent of our IB and RAW combined) in a Press Conference in 1992, and reported by The Hindu, Times of India, and by UNI.
(iv)In 2002, the then External Affairs Minister Mr. Jaswant Singh took up this matter with the Russians by writing a letter and he was informed in writing by the Russian authorities that the GOI should send a senior representative of the RAW to Moscow to obtain authenticated records of KGB payments to Rajiv Gandhi and his family. But this appears not to have been followed up.
(v)The Third information was the information that Mr. Rahul Gandhi, presently Vice President of the Congress Party, and also presently an Opposition MP, was detained in Boston’s Logan Airport by US law enforcement authorities sometime in the later half of September 2001. He was found in possession of $160,000 in cash which he did not declare upon arrival. ( US Customs require all amounts above $10,000 in cash to be declared, and if this is not done, every $10,000 instalment carries an 8 year prison term , if convicted).
(vi)This means that Mr.Rahul Gandhi was indictable for a prison term of 144 years. However, Mr. Brijesh Mishra the then Principal Secretary to the then PM Mr. Atal Bihari Vajpayee, personally intervened with the US Secretary of State, and arrangements were made to get Mr. Gandhi released. Nevertheless the information is that the US Homeland Security has registered a case which is still on record. (vii)It is reliably learnt that in his deposition to the US authorities , made before he was allowed to return to London, Mr. Rahul Gandhi had declared that the money was legally his own , and he had drawn it out of his secret and undisclosed account in Pictet Bank, which bank is head-quartered in Zurich, Switzerland.
(vii)It may also be noted here, that while Mr.Rahul Gandhi enrolled briefly at Harvard University, and later in Rollins College, Winter Park, Florida, USA, he paid his Tuition and other fees to these Colleges from his secret accounts, said to be from Bank of America branch in the Cayman Islands. This can be easily verified by the Enforcement Directorate.
(viii)Further this Intervenor also wrote to the Finance Minister and also informed the Prime Minister that information had become available that accounts existed in Sarasin Bank and Pictet both of Zurich, and the Vatican Bank in the name of Sonia Gandhi and her legatee son Rahul Gandhi. This information is also with the Enforcement Directorate.
8.
(a) It may be noted that on February 13, 2012, while inaugurating the first Interpol global programme on anti-corruption and asset recovery, the then CBI Director also had stated that Indians are the largest depositors in banks abroad with an estimated 500 billion US dollars (nearly 24.5 lakhs crore) of illegal money stashed by them in tax havens; and that the largest group of depositors in Swiss Banks are also reported to be Indians.
(b)He also added that there was a lack of political will in the leading tax haven states to part with the information because they are aware of the extent to which their economies have become “geared to this flow of illegal capitals from the poorer countries.” [http://timesofindia.indiatimes.com/india/Black‐money‐Indians‐have‐stashed‐over‐500bn‐in‐banks‐abroad‐says‐CBI/articleshow/11871624.cms].
(c )It is against this background that the submissions in writing were made by the ACACI to Special Investigation Team of Hon’ble Justice Shah, Chairman, and Hon’ble Justice Arijit Pasayat, Vice-Chairman, as follows:
(1).SIT must seek a report from Financial Intelligence Unit {FIU} of the Government of India on what it has done on Suspicious Transactions Reported by Banks.
(2)This reporting ensures that the Banks on a real time basis report on all Suspicious Transactions for further investigations. SIT should demand that at least 100 major STRs reported in the past 3 years must be investigated and action taken reported within the next 10 days, while following-up on all other cases promptly, as and when the reports surface.
(3)There is no precise definition of PEP {politically exposed persons} in India, while there is no ambiguity in international financial world as may be seen from a Swiss Federation Act on restitution of illicit wealth of PEP discussed further on.
(4) Consequently, the Finance Ministry must immediately come out with a guideline on PEP along with all Anti-Money Laundering Vehicles which are known to have been deployed by the offenders.
(5)PEP is defined as per UN Convention against Corruption (2005) to which India had become a signatory and ratified the same in 2011. [http://www.unodc.org/unodc/treaties/CAC/signatories.html].
(6)Until 2011, SEZs had become an institutional vehicle for Money Laundering as there was no tax on them. Subsequently MAT was introduced which led to the collapse of the SEZ economy. A Progress Report should be demanded on the progress in investigations made by ED on all those suspected cases.
(7) In line with the provisions of Section 12 of the Prevention of Money Laundering Act all institutions must declare to the Government as to their Beneficial ownership – this will include ICICI Bank, Axis Bank, HDFC Bank, Jet Airways etc.. Unless this is done, ownership of several large corporate will remain unknown and hence exposing themselves to become vehicles for Money Laundering.
9. The following are Immediate Steps that SIT can direct the CBI/ED to take:
(1)This Intervenor has provided information on Zurich based Pictet and Sarasin Bank Accounts of Sonia Gandhi and Rahul Gandhi; SIT be requested to seek progress reports on the details of transactions of these accounts and the legal basis for keeping the monies in foreign bank accounts and also on details of any other undeclared assets, if any.
https://www.admin.ch/ch/e/rs/1/196.1.en.pdf Swiss Federal Act on restitution of illicit wealth (2011)
(2)The SIT be asked for status on investigation of the truth of the Schweizer Illustrierte expose on the illicit wealth of the late PM Rajiv Gandhi and his legatees.
(3) The SIT be asked by this Hon’ble Court to investigate on the legatees of this prima facie illicit wealth and inquire about the steps to be taken under the Swiss Federation Act [http://www.oecd.org/daf/anti-bribery/anti-briberyconvention/42103425.pdf
(4)After consulting Sr. Advocate Fali S. Nariman ,the SIT be asked to recommend to the Union of India that it issue an Ordinance declaring such illicit wealth of politically exposed persons obtained by unlawful means as black money and declare such illicit wealth as nationalised.
(5)This Black Money Nationalisation Ordinance should be conveyed to all financial institutions all over the world to ensure the freezing of all accounts which are under the beneficial ownership of Indian citizens and demanding restitution of this kaalaadhan into Union Treasury Consolidated Fund of India. This Ordinance can be for the objectives which were stated when private banks were nationalised on 19 July 1969.
(6)The SIT be asked to seek details of private jet travels abroad and their passport entry and exit stamping under Immigration procedures, as well as the attested records of financing the costs of such travels of prominent and frequent foreign travellers such as Ms. Sonia Gandhi, Mr. Rahul Gandhi, Ms. Priyanka Vadra, Mr. Shashi Tharoor, etc., and other members in public life declaring them as politically exposed persons under international law and as defined in many enactments such as the Swiss Federation Act.
(7) The SIT be asked to seek investigation of the corporate tax fraud exposed and reported by ICIJ on Pepsi Bottling Group taking shelter under the Luxembourg-India Double Tax Avoidance Treaty and depriving Indian Treasury of legitimate corporate tax revenues. {http://www.icij.org/project/Luxembourg-leaks}.
Data source: SEBI
(8) The SIT be asked to call for SEBI records to plug the loophole on Participatory Notes (PNs) under the FII Guidelines and act according to findings of Hon’ble SAT in UBS case and Goldman Sachs case. [http://www.business‐standard.com/article/printer‐friendly‐version?article_id=109010501009_1].
(9)The SIT be asked to investigate why the recommendations of the Tarapore Committee , instituted by the RBI, which called for the phasing out of Participatory Notes, were ignored : since these derivative financial instruments violate the basic tenet of financial propriety of identity of the beneficial owner of the underlying foreign currency funds (referred to in financial parlance as Know Your Client). SIT be asked to take up with Finance Ministry and RBI the need to phase out within the next six months the Participatory Notes (PNs) which are known conduits for black money using hawala routes. Full text of Tarapore Committee Report can be obtained : {http:3rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/72250.pdf}.
(10)Request SIT to seek status report on the investigation of Blackmoney and Swiss Bank deposits of $ 8 billion on behalf of Moin Qureshi. (11)All FIPB clearances and the approval given by the Finance Minister during 2004-2015 be fact-checked to determine which are prima facie money laundering. For example in the presently Court-monitored cases of Aircel-Maxis scam and in the Swan Telecom –Etisalat share dilution scam.
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12. Furthermore, herein below is summarised various submissions on “Black Money” Ordinance for illicit wealth restitution.
(a)This Intervenor submits that the issue of black money should not get muffled as a mere taxation avoidance issue but as a major systemic crime of denying the proceeds of wealth within the nation’s financial system which denial should be declared as constituting treason with wilful deprivation of opportunities of sharing the wealth for the benefit of the poor people of the nation.
(b) Just as the illicit wealth of Mubarak of Egypt or Gaddafi of Libya were declared illicit and restitution of illicit wealth ordered, Union of India through the an ordinance declare the intent of the nation to ensure restitution of nationalised illegal money deposit abroad for the benefit of the deprived poor of the nation and to promote development initiatives of the governments under the Directive Principles of State Policy, as was done for the nationalisation of private banks. Such a declaration of the will of the people of India through an Ordinance by the State nationalisation of all accounts of Indian citizens in the banks of the 90 odd nations permitting secret banking, as suggested Senior Advocate and eminent scholar Fali S. Nariman.
(c )It will have a chilling effect on the behaviour of institutions in tax havens holding illicit wealth of Indian citizens. The suggested ordinance should provide for categorical directions to all financial institutions all over the world and signatories of Inter Governmental Agreements to honour this commitment of the Union of India, to facilitate restitution of illicit monies held outside Indian financial system depriving their beneficial use for the benefit of the poor masses of the nation and for developmental imperatives which are a struggle to overcome the colonial loot and loot by the corrupt violating the laws of the State.
(d)SIT may be asked by this Hon’ble Court to invite distinguished Senior Advocate Fali Nariman who had suggested such an Ordinance, a suggestion which should become a crucial instrument of black money restitution which is mandated by the Hon’ble Supreme Court to be achieved through decisive actions of SIT on Black Money.
(e )These submissions are made in furtherance of the solemn assurance of the PM, Shri. Narendra Modi, to the people of the nation during the 2014 Lok Sabha election campaign.
Comment:
NaMo should be complimented for the first cabinet decision of Swarajyam Bharat after May 2014 to institute SIT on Black Money headed by Justices MB Shah and Arijit Pasayat. They should become the key executive instrument for action fully supported by ALL GOI agencies including EDI etc. since the work of SIT is monitored by Hon'ble SC to restitute kaalaadhan.
Based on these recommendations of Dr. Subramanian Swamy, SIT should be requested to act with promptitude and effectively.
The nation trusts NaMo will ensure restitution of illicit wealth irrespective of the position held by the illicit wealth holders, be they PEPs or Hawala operators.
Based on these recommendations of Dr. Subramanian Swamy, SIT should be requested to act with promptitude and effectively.
The nation trusts NaMo will ensure restitution of illicit wealth irrespective of the position held by the illicit wealth holders, be they PEPs or Hawala operators.
Time for action is NOW.
S. Kalyanaraman,
Sarasvati Research Centre
May 13, 2015