Swiss government names Lalit Modi among those facing tax probe

Switzerland on Tuesday named Lalit Modi and his wife Minal among those about whom information and assistance have been sought from its tax department by the Indian authorities.

In two separate gazette notifications issued on ‘assistance’ matters, the Swiss Federal Tax Administration also gave Modi and his wife 10 days for “exercise of the right to be heard”.

Without divulging further details, the FTA notifications asked them to inform about a designate authorised person in Switzerland within 10 days to receive notifications.

One notification has been issued for “Lalit Kumar Modi, Indian national”, while the other one is for “Minal Modi alias Minalini Modi”.

E-mail and SMS queries to former Indian Premier League commissioner about the notifications elicited no response.

In the past, several other Indian nationals have been named in such notifications after the Swiss FTA was approached by Indian authorities for information about those people with regard to the pending tax-related probes against them.

After a due process prescribed under the Swiss law, the information has been shared by Switzerland with India in several cases, pursuant to which the Indian authorities -- including the tax department and Enforcement Directorate -- have proceeded with their prosecution and other actions.

These included several Indians named in the leaked ‘HSBC list’ of people with accounts in the Geneva branch of the global banking giant.

The latest notifications come days before Prime Minister Narendra Modi’s visit to Switzerland on an official visit, during which discussions are expected on further strengthening of ties between the two countries in fight against black money suspected to be stashed by Indians in Swiss banks.

The former IPL commissioner, who is said to have left India for London in 2010, is facing a money laundering probe and the ED has asked external affairs ministry to seek his extradition from the UK. He has been denying any wrongdoing.

The ED wants Modi to join investigation in a case relating to T20 cricket Indian Premier League after an FIR was registered against him and others under the provisions of Prevention of Money Laundering Act.

For long, Switzerland used to be known for strict secrecy clauses about details of foreigners having accounts in Swiss banks. Under growing global pressure, Switzerland has however begun sharing information in cases where other countries have been able to present some evidence of suspected illegalities.

Under Swiss law, a prescribed procedure is followed for any administration assistance or information exchange by the FTA with India or any other country with which the Alpine nation has tax treaties about their respective nationals.
Other notifications issued by the FTA were for Dubai-based Evershine Commercial Brokers, a Belize based company and a Swedish national named Hans Peter Lundgren.

Among other provisions, this procedure also seeks to safeguard “the right to be heard” of the person about whom information is sought by a foreign country.

“If the person concerned has not designated a person authorised to receive the notifications, the FTA shall inform this person about the pending administrative assistance procedure through the requesting authority.

“Simultaneously, the FTA shall set a period of time for the person concerned to designate a person authorised to receive notifications. The FTA may inform the concerned person directly provided that the requesting authority expressly consents to this procedure in that case,” the rules say.

If the person concerned is found to be entitled to appeal, he or she may participate in the procedure and inspect the files. The information can be shared with the foreign authorities after the appeal is rejected.