Tuesday, April 21, 2009



[prohindu] Interesting interview - 'In 5 years, Indians stashed Rs 688,000 cr illegally' - S Gurumurthy

Rajeev Aggarwal Tue, Apr 21, 2009 at 5:02 AM
Reply-To: prohindu-owner@yahoogroups.com
To: hindiUSA@yahoogroups.com, Branded_Indian@yahoogroups.com, IHRO@yahoogroups.com, prohindu@yahoogroups.com

'In 5 years, Indians stashed Rs 688,000 cr illegally'

April 20, 2009 | 13:24 IST

S Gurumurthy, the leading chartered accountant who is also the convener of the Swadeshi Jagran Manch, is a member of the taskforce created by the Bharatiya Janata Party's prime ministerial candidate L K Advani to bring back the black money stashed away in various banks outside India if the National Democratic Alliance is voted back to power.
The first report by the taskforce was released a few days ago. Other than Gurumurthy, those involved in the preparation of the report was former Intelligence Bureau director Ajit Kumar Doval, Dr R Vaidyanathan from the Indian Institute of Management-Bangalore, and lawyer Mahesh Jethmalani, the BJP candidate from the Mumbai North-Central constituency.

In this exclusive interview with Shobha Warrier, Gurumurthy discusses tax havens, secret bank accounts and what the taskforce's plans are.

You are part of the taskforce created to bring black money back from secret bank accounts abroad. The BJP has made it an election issue. Were you instrumental in getting Mr Advani to take up the issue?

This is a subject I have been working on since 1986. In fact, I was even arrested because I was trying to dig into the secret accounts of the Gandhi family. I have always been talking to many politicians on this subject; I had also spoken to the BJP.

At that time, it was more ideal to work on it than anything practical. It is not that India on its own can prevent global black money being generated, because there are countries which help the generation of black money by their laws, and Switzerland is the most important of them.

These countries provide secrecy, and anybody can go and deposit money incognito. Their laws prohibit the disclosure of names. Only rarely, where you can link the money to corruption or drugs, is it possible to trace the flight of capital. For that, they have treaties with different countries, including with India. But you need to know the name of the criminal and his account number to ask for the details.

It has always been a question on the minds of the Indian people and also those keen on establishing the amount of money that has gone there, but there was no proper estimate. But this has always been a topic of debate in the minds of those who are interested in the country.

Why did the BJP decide to take it up as an issue now?

It is essentially because of the turn in the Western nations' approach to secret banking due to the economic crisis in the West. The West began feeling the pinch of secret banking. They felt that the financial system is getting destabilised because of the generation of black money.

Black money in the West is not as much flight of capital as it is evasion of taxes. In India, it is both black money and flight of capital.

Were the recent developments in Germany, with its authorities asking for the secret names, the turning point?

The Germans took the step of bribing a bank official of the LGT Bank in Liechtenstein by paying $6 million. They got a secret CD containing 1,500 names of people who have stashed away money, and nearly 500, 600 of these were Germans. They acted against them, which included the head of the German postal system.

Then they told the entire world that anyone could ask for the names and if the names of those countries' nationals were there, they would part with it free of cost. All the countries made a request, but not India. So, Advaniji wrote a letter in April last year, but an evasive reply was given.

Three other things also happened. One, after Germany acted very powerfully, there was a big diplomatic row between Liechtenstein and Germany. Liechtenstein is a place from where secret trusts are created and monies are deposited into Switzerland. It is a principality.

Then, Germany took up the issue in the Organisation for Economic Cooperation and Development's 17-nation platform (Switzerland is one of them) and asked for blacklisting and sanctions against Switzerland. France also joined Germany. This happened some time in October last year.

Switzerland did not know what to do then and they began lobbying. France and Germany then took it to the G-20 preparatory meeting. They said at the G-20 meeting on April 2 that they were asking for blacklisting of and sanctions against Switzerland and all those countries that were not cooperating.

So that was why Mr Advani wanted Prime Minister Manmohan Singh to raise the issue at the G20 meet?

At that time Advaniji felt as the PM was attending the April 2 meeting, he should take up this issue. But our people remained silent at the G-20 preparatory meet.

See what India did. We didn't forcefully ask the Germans to give us the particulars. When Germany and France took up the matter in the OECD, we didn't welcome it. When they took up the matter in G-20 we did not support them or join them. So, from all this arose a big question, whether the government was at all interested in working against illicit Indian monies abroad. That is why Advaniji took up the matter. As the government did not take it up, the BJP had to take it up as an electoral issue.

The Congress said Mr Advani was lying...

It is like this: A theft has taken place, and you are arguing about how much has been stolen. Nobody denies the theft! Nobody denies the loot!

How much black money from India must be there in the secret Swiss accounts?

A global study was conducted by an expert, Raymond W Baker, which we have quoted in the report. He published a book in 2005, Capitalism's Achilles Heel: Dirty Money And How To Renew The Free Market System.

After 2001, secret money became an issue of security. So America became worried about terror funding which takes place only through secret banking channels.

His book estimated the black money to be $11.5 trillion which is increasing at the rate of $1 trillion every year, out of which $500 billion is stolen from developing countries.

< P>

Is the report one of the reasons why the BJP decided to raise the issue?

That alone would not have helped. The change in the economic situation made the Western countries try to break banking secrecy. That was the most important point. US President Obama has proposed a law to break the secrecy. Like I said earlier, you have to join forces at the global level as the battle needs to be fought at the global level. That is the reason why the BJP decided to take it up.

The GFI study only indicated the magnitude of the problem. It says between 2002 and 2006, the amount of money stashed away from India would be on an average $27 billion a year and totally about $137.5 billion which is equal to Rs 688,000 crores in just five years. So, the fact of the loot can never be disputed.

What the Congress is trying to do is to dispute the maths of the issue. The fact is, whatever be the amount, it is very big.

Why do you think the Congress is not taking up the issue?

Obviously, a large part of it must be Congressmen's money, they have ruled the country for 50 years. Why did Sonia Gandhi not speak on this subject? She is said to be a close friend of Ottavio Quattrocchi and it has been established that he had received bribe money from Bofors through secret banking systems and tax havens. The Central Bureau of Investigation successfully traced the money and kept it frozen. He was allowed to leave India first and then take the money back.

I believe the lead family of the Congress party is a suspect in the matter of foreign money and that is why the family doesn't want the banks' secrecy to be unveiled.

Their friends are the only people who have been caught so far. No other Indian has been caught except the people associated with the Gandhi family in the Bofors scandal.

What are the taskforce's plans?

First, he (Advani) wanted us to find out what the global position was. That is the first report we gave. We have said it is doable if we work on an appropriate strategy. We have to also generate a national consensus and arouse a high level of consciousness among the people about the issue.

Is that the reason why a survey was conducted in Gujarat on black money in secret bank accounts?

Yes, the BJP wants to make people to proactively think and participate in the campaign.

You are talking about huge sums of money. If at all we manage to bring it back to India, what do you say India should do with it?

Even if 25 per cent of what they are talking about comes back, India's rating will go up because it's our own money and not borrowed money. It can transform the economic personality of the nation.

The BJP manifesto says if the money comes back, it will be used for fundamental purposes like rural roads, schools, poverty alleviation and things like that. It will be used for social causes and not building airports.

Will the current global recession make people look at globalisation from a different perspective?

Capitalism will undergo a lot of changes because today's capitalism is not what Adam Smith conceived or Karl Marx opposed. Today, capitalists are not the people who handle capital; it's the professionals. It's somebody else's money that the professionals are handling. So, it is not capitalist's capitalism; it's professionals' capitalism.

Now, a further change that has taken place is, it is not actual money, but virtual money that is being used. Imaginary money has been created by brain power and that is put to use as real power. That is the crisis today.

This kind of capitalism will be gone and the original capitalism where 'I look after my wealth' will come back again. That is good for the world. This other man's money I handle which has promoted the expenditure-driven market mechanism is a product of neo-capitalism.

Banking secrecy was considered one of the virtues of capitalism. Now, they call it an evil! This is the U-turn in one year!

In one of your earlier interviews, you told rediff.com that globalisation was not sustainable.

Who is talking about globalisation today? Today, it's just not environmentally, ecologically and culturally sustainable. I have always maintained that it was not economically sustainable, because it is contrary to the very meaning and definition of economics which is associated with frugality.

It is an executive class economics different from the economy class which brings out the difference between economics and excessiveness.

Moreover, globalisation disregards the existence of countries; they talk about a global society, global rule, global citizens, global villages, etc. It was an absolutely idealistic idiosyncrasy. That is gone.

Who is talking about the WTO? I told you long ago that the WTO will not last. If you create an artificial structure, it will not stand. People in different parts of the world have their own models of living; you cannot homogenise them, make them wear the same dress, eat the same food, or see the same cinema or have the same goals. This is what West-centric globalisation attempted, and got the first taste of it in the last four, five years.

Will people start thinking in terms of swadeshi?

People will be more conscious of their surroundings, their people, their family and their society first, and not the distant world.

The distant world is good for a visit, but not for domicile.

Photograph: Sreeram Selvaraj



At 11:05 PM, Anonymous Anonymous said...

good morning ppl. I'm honestly into shoes and I have been looking for the sake of that singular model. The prices for the sneakers were approximately 190 dollars everwhere. But definitively I set this location selling them for half price. I in reality love those [url=http://www.shoesempire.com]prada sneakers[/url]. I will probably buy them. what can you tell me about these?

At 12:00 AM, Anonymous Anonymous said...

hello fellas. I'm actually into shoes and I was searching for that exact make. The prices seeking the shoes are approximately 300 pounds everwhere. But completely I set this locate selling them for the benefit of half price. I exceptionally love these [url=http://www.shoesempire.com]prada sneakers[/url]. I will definetly purchase them. what is your opinion?

At 2:26 AM, Anonymous Anonymous said...

hello dudes. I'm actually into shoes and I was digging allowing for regarding that meticulous model. The prices as regards the sneakers are approximately 180 pounds on every page. But for all I base this site selling them for the benefit of half price. I in reality like those [url=http://www.shoesempire.com]gucci sneakers[/url]. I will definetly buy these. what is your opinion?

At 7:23 AM, Anonymous Anonymous said...

hi everyone. I'm really into shoes and I have been searching for the sake of that particular make. The prices for the boots are about 330 pounds on every page. But definitively I found this area selling them for half price. I absolutely love these [url=http://www.shoesempire.com]gucci sneakers[/url]. I will probably order them. what can you say about it?

At 11:19 PM, Anonymous send money abroad said...

Nice blog for transfer money online. it's facilitate foreign exchange business with the help of send money abroad and also transfer to overseas.


Post a Comment

<< Home