Clarification on reports of allegations about Indian Black Money in Swiss Bank Accounts

Attention of the Government has been drawn to the media reports raising allegations that the Indian Government submitted forged documents to the Swiss authorities in the US $ 8 billion Hasan Ali Khan case. This is a false and misleading report.

The Income Tax Department conducted a search on the premises of Shri Hasan Ali Khan in January, 2007 and recovered certain documents. One of the documents contained information that he has around US $ 8 billion deposits in the UBS AG, a Swiss Bank and that the bank has permitted Shri Hasan Ali Khan to withdraw US $ 6 billion. Enforcement Directorate through the Government of India approached the Swiss Government on the basis of these and other documents. The Swiss authorities then informed that according to UBS AG, the documents recovered from Shri Khan and his associates sent to the Swiss authorities were forged. It needs to be pointed out that the documents forwarded to the Swiss Authorities were those seized from Shri Khan’s/his associates’ premises and it would therefore be improper to suggest that the Indian Government has forged any document or Government of India submitted forged documents. The insinuation that the Government of India doctored any document is false and contrary to facts. It is further relevant to point out that a letter by Shri Hasan Ali Khan duly notarised by a notary in London had also been obtained by the Enforcement Director which is being used against Shri Khan since the notary concerned has confirmed that the document does have his certification.

Rather than dropping the cases under the Income Tax Act and the Foreign Exchange Management Act against Shri Khan on the ground that some of the documents seized are forged, the concerned authorities of the Government of India on the basis of various documents have actually gone ahead and initiated cases against Shri Khan for his unauthorised dealing of US $ 8 billion as well as under the Income Tax Act. The notice issued under FEMA is under adjudication. The IT authorities have done a best judgement assessment based on several documents. Under the relevant Acts, the onus of disproving the correctness of documents is with the person from whom it has been seized.

The Swiss Federal Tax Administration has consistently refused to share bank related information on the ground that such information regarding bank deposits of Indian residents is covered by Banking Secrecy Laws. The Government of India has already taken up the matter with the Swiss Government to re-negotiate Article 26 of the OECD model tax convention so that information can be received and even shared with other law enforcement agencies also.

It is clear from the above that consistent and vigorous efforts have been made by all authorities concerned to elicit information on illegal Indian money in Swiss accounts