Prashant Bhushan submits suggestions to SIT on black money; suggests disclosure of names and mandatory prosecution

In a letter addressed to the SIT on black money, advocate and activist, Prashant Bhushan has submitted certain suggestions pursuant to the Supreme Court order dated 20.01.2015, wherein, the Court had permitted all the parties and intervenors to put their suggestions before the SIT within a period of 2 weeks. Read the LiveLaw story here.

He suggests curbing anonymous investments. According to him, instruments such as participatory notes and anonymous investments by funds or shell companies need to be disallowed with immediate effect. It says, "Every time a company invests in stocks or other financial instruments in the Indian Stock Exchange or elsewhere, the relevant authority must be able to determine the exact ownership of the investment, ending in the final individuals who hold the money that is being invested. In the case of investments made in the name of a company or a trust, the major stakeholders of the company, or the trustees of the trust, must be determined and duly recorded, before the investment is allowed."

He further suggests a change in law, or an amendment to an existing law (such as the Prevention of Money Laundering Act), requiring all Indian citizens to disclose all their assets and bank accounts in India and abroad. Such a law would require citizens to annually disclose to the authorities a full list of their assets and liabilities, including their stakes in companies or trusts registered abroad. Further, any income or assets that are not disclosed in the required form would be deemed to be "proceeds of crime", and included as 'predicate offences' defined under the UN Convention against Corruption (UNCAC).

He demands a disclosure of names of all the persons who hold accounts in foreign banks:

1. Where prima facie evidence of illegality has been found,
2. Where the account holders have admitted that their accounts are in violation of law or that they have committed tax evasion or money laundering, or
3. Where the government has either closed cases against the account holders after settlement/payment of fines/penalty, or where the account holders have approached the government for settlement.

Finally, he recommends mandatory prosecution of all persons having black money under all relevant laws and discontinuation of practice of imposition of mere financial penalty.

In the order, the Supreme Court had stated that they were interested in money coming back and not on disclosure of names.

Around 627 Indians have accounts in HSBC Bank, Geneva, regarding which a list was submitted to the Supreme Court. Investigation regarding such accounts has to be completed before March 31, 2015. The Attorney General had also submitted details regarding the investigation in a sealed envelope to the Apex Court and the same is yet to be opened.

You may read more about the case here.

Read the full letter here.