The government announced a multi-agency probe on Monday after the International Consortium of Investigative Journalist (ICIJ) released a massive trove of financial documents titled 'Paradise Papers', which shows top companies and influential individuals' offshore investments across the world.
Reports state that the investigation will be headed by the Central Board of Direct Taxes (CBDT) chairman, after the documents showed offshore dealings of nearly 714 individuals and entities. The government said that the multi-agency group will also have representatives from the Enforcement Directorate (ED), the Reserve Bank of India (RBI) and the Financial Intelligence Unit (FIU).
The Paradise Papers contain 13.4 million documents mainly from Appleby, an offshore law firm with offices in Bermuda and beyond and Singapore's business consulting company Asiaciti. The files were initially obtained by the German newspaper Suddeutsche Zeitung and shared with the ICIJ and partner media outlets. The ICIJ, in association with 96 news organisations, subsequently released the information.
The Finance Ministry on Monday said that the probe units of the Income Tax Department have been alerted to to go through the revelations in the leaked documents and take appropriate actions accordingly.
The leading Opposition party, Congress, attacked the government as the leaked files also listed the name of the Union Minister of State for Civil Aviation Jayant Sinha and BJP's Rajya Sabha MP RK Sinha.
Government officials, however, said that setting up an offshore account or firm cannot be deemed illegal, if the details of the transactions have been shared by the individual with Indian authorities.
The ministers mentioned in the documents, however, rushed to clear their name, with Jayant Sinha writing a series of tweets denying the allegations. While, RK Sinha chose the time to observe a "maun vrat" (a vow of silence). Sinha, while writing on a piece of paper, said that he has observed a "maun vrat" for seven days because of a ritual.
Sinha however wrote that the transactions were undertaken on behalf of highly reputed world-leading organisations in his fiduciary role as Partner at Omidyar Network and its designated representative on the D.Light Board were legal.
"All these transactions have been fully disclosed to relevant authorities through all necessary filings as required. After leaving Omidyar Network, I was asked to continue on the D.Light Board as an Independent Director. On joining the Union Council of Ministers, I immediately resigned from the D.Light Board and severed my involvement with the company. It is crucial to note that these transactions were done for D.Light as an Omidyar representative, and not for any personal purpose," Sinha said.
While Congress has sought an explanation from the BJP why its richest MP (RK Sinha) and his wife Rita Kishore Sinha own an offshore company called 'SIS Asia Pacific Holdings Ltd' (SAPHL) in the offshore tax haven of Malta.
Congress Spokesman Randeep Surjewala asked, "Will the Prime Minister show the courage of conviction to hand over this entire information to the bench of Supreme Court that is looking at action against black money holders? Will the 'Compromised Bureau of Investigation' (CBI) and ED (Enforcement Directorate) take action?"