India names three people it is investigating in ‘black money’ case

The idea that vast amounts of India’s wealth lie in secretive bank accounts in Switzerland and elsewhere, and that if successfully repatriated and distributed through a hitherto undecided mechanism, it can solve nearly all of India’s problems with significant change left over, is one of the enduring notions of recent Indian political discourse.

The Aam Aadmi Party, led by Arvind Kejriwal, won the Delhi state elections making black money and anti-corruption two of its central agendas. In the national elections, BJP did something similar.

In its election manifesto, BJP said it “is committed to initiate the process of tracking down and bringing back black money stashed in foreign banks and offshore accounts.”

Nobody really knows how much unaccounted money is really stashed away and how much of it is illegal. Estimates vary from $2.3 billion to $250 billion. According to a study by BJP in 2011, the amount of black money stashed away in foreign banks is around $250 billion.

The first movement of levers in this process was set into motion on Monday when the government told India’s top court that it had initiated prosecution against three individuals for tax fraud and money laundering. While there is a sense of eager anticipation around the disclosure of these names, because of the widespread belief that famous politicians and businessmen all hold secret accounts, only one of the three names disclosed today—Dabur’s Pradip Burman—is even remotely well-known.

The Aam Admi Party was quick to attack the government over selective disclosure of names, saying an effort was underway to protect the much bigger names the party had itself announced in 2012. Because Burman’s name was in its list, AAP is using that to burnish the credibility of its original list.

Here are the three people who have been named by the government as guilty of tax fraud and money laundering.

Pradip Burman

Burman, 71, is the promoter of Dabur, India’s fourth largest FMCG company that sells everything from food to health care products, holding 0.02% of the company’s shares as of Sept. 30, 2014.

Allegations of black money against Dabur first surfaced in 2012 when former Delhi chief minister and anti-corruption crusader Arvind Kejriwal accused three members of the Burman family—who own Dabur—of keeping untaxed money worth Rs25 crore ($4 million) in Swiss Banks.

Shares of Dabur fell by 9% soon after the announcement on Monday. The company refuted the government’s claims saying Burman, who holds a bachelor’s degree in mechanical engineering from the Massachusetts Institute of Technology, opened the account when he was a non-resident Indian and was legally permitted to do that.

Burman’s career in Dabur began in 1967 starting out as a management trainee at the firm run by his family. He quickly climbed up the ranks becoming the director of the company in 1977. He is also the founding chairman of Sundesh, a non-profit organization working to improve the conditions of women in rural India.

Pankaj Chimanlal Lodhiya

Lodhiya, a Rajkot-based bullion and jewellery trader, has also been named by the government for allegedly stashing away black money. He has denied wrongdoing, however.

Hv declared all assets, hearing abt this from you 1st time: Pankaj Lodhia on media reports on black money holders pic.twitter.com/wDYz3ANECO

— ANI (@ANI_news) October 27, 2014

Lodhiya is the chief promoter of Shreeji Trading Company (STC), a bullion trading company, set up in 1997. STC is part of Shreeji Group that also has interests in jewellery and real estate. In December 2013, ICRA, a credit ratings agency, had suspended the ‘stable’ rating it had previously assigned to STC after it failed to provide sufficient information to ICRA for assessing STC’s health.

Radha Satish Timblo

Radha Satish Timblo is a managing partner of Timblo Enterprises. She is also a member of the Goa Mineral Ore Exporters’ Association. Her name previously came up a few times in reference to the illegal mining of iron ore in Goa. The lease for mining had originally been granted to an individual who moved to Pakistan and lived there, the Central Empowered Committee, a body constituted by the Supreme Court, had found in 2012. The mining property originally allotted under the Portugese to Badrudin Mavani had been handed over to the Timblos under a power of attorney. The “genuineness and validity was highly dubious and doubtful”, the report by CEC said about the unregistered power of attorney. Timblo was also one of the highest advance tax payers in the country in 2010.

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India names three people it is investigating in ‘black money’ case