The ‘Modus Operandi’ of HSBC

Normally I ignore anything to do with the IAC, AAP and Arvind Kejriwal but comments on the  YouTube CobraPost Videos drawing parallels with HSBC got me googling to see what all the noise was about.

Following are the statements of three people who had opened accounts in Dubai, Zurich and Geneva with HSBC Bank,given when they were questioned under Section 132 (4)/133A of the Income Tax Act, 1961:

Mr. Vikram Dhirani of Ghaziabad said in his deposition that he had opened an account with HSBC in Dubai in 2005 and closed it in 2006. A bank representative came to him in Delhi to open an account. He did not travel to Dubai for opening or operating it. The formalities was completed in Delhi. He agreed that a person authorised by bank officials would collect the cash from him, which would show up in his HSBC account in Dubai. After the money was deposited, Mr. Dhirani was given a confirmation. However, no document was given.Mr. Dhirani had deposited about Rs. 12 crore in alleged unaccounted income in the Dubai account over a period of time. The account was closed in 2006, and the money was withdrawn and given to him in Delhi. Neither did he go to Dubai to collect the cash, nor did he arrange for his representative to take the cash on his behalf. The bank officials arranged for delivery of cash in India.

Mr.Parminder Singh Kalra opened an account with HSBC, Zurich, on the advice of a Swiss investment consultant based in Zurich. To make deposits of money to the tune of Rs. 8 crore-Rs. 9 crore, he gave the cash in installments to a person in Delhi. Every time, a different person came to collect the cash for being remitted in the Zurich branch of HSBC. The account was closed in 2008-09 even while he remained in Delhi.

Mr. Praveen Sawhney, who had opened an account with HSBC, Geneva, told income tax officials that his father had transferred $ 1.8 million to this account. Regarding the modus operandi for withdrawal of money, Mr. Sawhney said he used to call the bank officials in Geneva who would arrange for delivery of cash in India through their agents. All discussions with the bank officials were on the phone. Every time he asked for cash, a different person used to come to deliver it and he knew none of them.

The IWC made a lot of noise at the time and words like Swiss bank accounts,black money,hawala,etc were used indiscriminately. Hawala,a traditional financial activity in our part of the world, might be outlawed but continues to thrive.But going by what turned up in the press,the IWC didn’t manage to show that actual hawala transactions took place.The general population in India,like the general population in most of the world, might be unfamiliar with how Swiss Banks and in general offshore banks operate but the procedure outlined in the statements is par for the course in such accounts.Black money means money on which taxes due have not been paid.Money in a Swiss bank doesn’t automatically equate black money.Sure the Ambanis,Birlas,etc.might have Swiss Bank Accounts but where’s the proof that the money in them is black?At most we can cite them for not disclosing the accounts.But   can we expect billionaires with interests across the world to be aware of or remember each and every bank account especially ones which seem to have trivial balances considering their actual net worth?Are all there accounts really personally operated ?