Mohan Murti

Of graft and punishment

Mohan Murti | Updated on May 07, 2011 Published on May 02, 2011

Thanks to considerable pressure from Germany and rest of Europe, the principle of bank secrecy of Switzerland has vanished.

I distinctly remember the Manmohan Singh of 1991, re-invented by the astute Prime Minister, Narasimha Rao, who almost worked a miracle in the Indian economy and laid the core foundations for the achievements of the past decade.

It was therefore with much discomfort that I heard my aged father — I am now with him on a short holiday — say that what India badly needed now was an honest person as its Prime Minister.

I attempted to debate but, he cut me short saying that it is like milk turning curd, when it keeps company with the latter. I could see sadness and frustration in him.

A few minutes later, I saw a live news media interview with Mr Julian Assaange of WikiLeaks.

He said, without mincing words, that the Indian Prime Minister was “foolish” to imitate Ms Hillary Clinton and claim lack of authenticity to the WikiLeak tapes.

Last month, during the Parliamentary debate, the Prime Minister had defended the government and said that all its sins had been washed off when the people voted it back to power, with larger numbers.

It is amazing how a person like him could use such hollow, specious argument. Do criminals ever admit to crimes or do people who vote a government forfeit their right to ask government to answer its crimes, discovered subsequently?

Indian leaders are like their wicked, dishonest equals in ancient Rome - busy hoaxing, swindling and fiddling while the country burnt. This kind of misleading cannot go on.

WikiLeaks Empowered

In fact, all credit to WikiLeaks and the leaked cables that have exposed the corruption, selfishness and incompetence in high places. We know how much indecency is being perpetrated in the people's name. Even ordinary people are now empowered with relevant information.

The long-established image of public figures as well-ordered, well turned out, knowledgeable and trying to save the world has burst as in a fairy tale.

They are seen as avaricious people who are mostly interested in power and in their Swiss bank accounts overflowing with affluence – taken away by fraud from the poor and needy.

The anti-corruption organisation, Transparency International, estimates that close to €7.5 trillion is kept out of the reach of tax authorities, worldwide.

Recently, I read in the public domain that India ranks first in terms of value of the monies kept in Swiss banks.

The Swiss Banking Association report, 2006 details bank deposits by nationals of following countries:

India — $1,456 billion; Russia — $470 billion; the UK — $390 billion; Ukraine — $100 billion and

China — $96 billion

India with $1.45 trillion (approximately Rs sixty seven lakh fifty thousand crore) has more money in Swiss banks than the rest of the world combined!

The second ranking Russia has four times less deposit in Swiss accounts. Germany and the US do not even figure in the top five.

The prestigious Centre for International Policy's ‘Global Financial Integrity' has reported that Indian politicians, civil servants, businessmen and people from entertainment and sports field have deposited almost 300 billion euros in the last five years into Swiss accounts alone.

This may be the picture of deposits in Swiss banks only. There are about seventy other tax havens in the world.

The right to know

Is it not every Indian's right to know the silhouette of the persons who hold such ill-gotten wealth?

Is it not the responsibility of the Indian government to bring these thieves to book? Why then do leaders who proclaim publicly the decadence and immorality of corruption and protect treacherous thieves and their plunder?

Interestingly, the Swiss government has agreed to disclose the names of the account holders - only if the respective governments asked for it. But Indian government is not assertively asking for the details.

Let me say how Germany and the rest of Europe dealt with the peccadillo of tax evasion.

OECD Diplomacy

Thanks to considerable pressure from Germany and rest of Europe, the principle of bank secrecy of Switzerland, a concept that was celebrated in James Bond movies and part of the country's identity - as much as Swiss cheese and watches - has vanished.

In what is known as the largest post-war economic scandal ever in German history, about one thousand well-heeled Germans - many of them reputed - were cornered and punished.

Berlin may have been enriched by almost 4 billion euros in lost taxes from banks and foundations of Liechtenstein and Switzerland.

The tough German stance rattled cages in Switzerland, where for over a century, banking secrecy was sacrosanct.

Today, most countries north of the Alps, believe that the days of the numbered Swiss account are over.

Court sentences have been pronounced on people who hid money in Liechtenstein, many handed over their fines, even before the trail began.

The rule of thumb for anyone who did not cooperate in investigation was one year in prison for every million of unpaid taxes.

Even without a prison sentence, many faced financial ruin. A fine of €2 million was imposed for each million in evaded taxes. Many submitted, voluntarily, and confessors were given a mark down.

Demystifying the Swiss Account

Ordinary Indians may not be aware of how such secret accounts operate and the rules and regulations. In Swiss law, any one 18 years and above, even a non-resident, can open such an account by mail or fax.

Aspiring adventurists should note that it is the easiest thing to do, short of telling lies!

(The author is a former Europe Director, CII. >blfeedback@thehindu.co.in)

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Published on May 02, 2011
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