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Current Events 5 April 2016

 

News

5th APR 2016

GS III: MONEY LAUNDERING - BLACK MONEY

World figures named in massive offshore tax evasion leak

An international coalition of media outlets, The International Consortium of Investigative Journalists, a non-profit organisation based in Washington, on 3rd April, 2016, published what it said was an extensive investigation into offshore financial dealings of the rich and famous, based on a vast trove of documents provided by an anonymous source. The cache of 11.5 million records detailed the offshore holdings of a dozen current and former world leaders, as well as businessmen, criminals, celebrities and sports stars.

In India, The Indian Express was part of the investigation and has reported that many Indian industrialists and celebrities, including actors Amitabh Bachchan and Aishwarya Rai, DLF owner K.P. Singh and Vinod Adani (Gautam Adani's elder brother), are named in the documents.

A cache of documents has exposed the secret offshore dealings of aides to Russian president Vladimir Putin, world leaders and celebrities including Barcelona forward Lionel Messi.

A Munich-based daily, Sueddeutsche Zeitung, was offered the data through an encrypted channel by an anonymous source who requested no monetary compensation and asked only for unspecified security measures. The data concerned internal documents from a Panama-based law firm, Mossack Fonseca. Founded by German-born Juergen Mossack, the firm has offices across the globe and is among the world's biggest creators of shell companies.

Panamanian President Juan Carlos Varela issued a statement saying his government would cooperate "vigorously" with any judicial investigation arising from the leak of the law firm's documents. He said that the revelations shouldn't detract from his government's "zero tolerance" for any illicit activities in Panama's finance industry.

ICIJ said the law firm's leaked internal files contain information on 214,488 offshore entities connected to people in more than 200 countries and territories. It said it would release the full list of companies and people linked to them early next month.

The ICIJ said the documents included emails, financial spreadsheets, passports and corporate records detailing how powerful figures used banks, law firms and offshore shell companies to hide their assets. The data spanned a time frame of nearly 40 years, from 1977 through the end of 2015, it said.

Among the countries with past or present political figures named in the reports are Iceland, Ukraine, Pakistan, Saudi Arabia, Russia and Argentina. In Russia, the Kremlin had said a week earlier itself that it was anticipating what it called an upcoming "information attack."

The office of Argentina's president, Mauricio Macri, confirmed that the business group owned by his family set up Fleg Trading Ltd., an offshore company based in the Bahamas. But it said Macri himself had no shares in Fleg and never received income from it.

Iceland's prime minister insisted he would not resign after the Panama documents linked him to an offshore company that would represent a serious conflict of interest.

Ukraine's President Petro Poroshenko insisted he has done nothing wrong and hasn't managed his assets since being elected.

Eight of the top officials of the Communist Party of China were among 140 political figures around the world said to have links to offshore accounts.



GS III: MONEY LAUNDERING - BLACK MONEY

Panama leaks: probe will determine legitimacy of accounts, says RBI chief

 

Leaked documents of a Panama law firm Mossack Fonseca are said to feature links of over 500 Indians to offshore firms.

The Reserve Bank along with officials from CBDT, RBI and FIU (Financial Intelligence Unit) are part of the multi-agency group announced by the government to probe the list which has nearly 500 Indians including celebrities and industrialists.

The Special Investigation Team (SIT) on Black Money appointed under the Supreme Court's directions and chaired by Justice (retd) M B Shah said that it will investigate thoroughly the Panama Papers issue. SIT had in its third report submitted in 2015 to the court said that various departments were not prepared to share the information received in tax evasion cases.

Asserting that there could be genuine reasons for having offshore accounts, RBI Governor Raghuram Rajan said the multi-agency probe will look into the legitimacy of such holdings of Indians named in the leaked Panama list.

Under the Liberalised Remittance Scheme (LRS), all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year for any permissible current or capital account transaction or a combination of both. Thus, the LRS scheme allows one to take money outside. Under FEMA as well few things are permitted and few are not. So the investigation will reveal what is legitimate.

Dr Jehangir S. Sorabjee, son of former attorney general Soli Sorabjee who works as an honorary consultant physician at the Bombay Hospital and head of the department of medicine at the Bombay Hospital Institute of Medical Sciences, said, "There is no hanky panky here. We were allowed offshore investment of 250,000 dollars under the liberalised remittance scheme since 2005, and we have utilised the full quota. We have complied with the norms, and declared this investment to the income tax department," Dr Sorabjee said.


GS II: WELFARE SCHEMES: AADHAAR

Over 100 cr. people have Aadhaar number: Govt.


Over 100 crore people, including 93 per cent of the adult population, now have an Aadhaar number, the government said and sought to allay fears about data privacy.

"We have put in place all safeguards in the Bill to ensure privacy," Minister for Communication and IT Ravi Shankar Prasad said, adding the Aadhaar Act complied with the standards set by the Supreme Court to ensure privacy in cases of phone tapping.

"As per Section 29 of the law, core biometrics that are fingerprints and iris, shall not be shared with anyone for any reason whatsoever," Mr. Prasad said.

The Unique Identification Authority of India (UIDAI) had generated 100 crore Aadhaar numbers in five-and half years since the first Aadhaar was issued in 2010.


GS III: ECOLOGY & ENVIRONMENT - FISHING

Goa Minister calls on coastal States to ban fishing using LED lights

Goa Fisheries Minister Avertano Furtado has written to all the coastal States including Maharashtra, Kerala, Karnataka and Gujarat, requesting for a joint meeting of all the Fisheries Ministers to arrive at a consensus on banning fishing by limiting the use of Light Emitting Diode (LED) lights and fish-light attractors (FLAs) up to 12 nautical miles.

The issue was raised in the State Legislative Assembly during the recent brief budget session by Independent MLA Vijai Sardesai, who said that the use of these methods by some fishermen had led to the fear of a fish famine in the State.

The Minister said that the Kerala government had already banned the use of LEDs on trawlers.

Traditional fishermen and small boat owners say that the fishing industry will be doomed and die out completely within two years if the purse seine fishing boats are allowed to use FLAs and LED lights for fishing.

GS II: POLITY - J&K

Mehbooba creates history as J&K's first woman Chief Minister

Peoples Democratic Party president Mehbooba Mufti, 56, took oath as the first woman Chief Minister of Jammu and Kashmir.

The Bharatiya Janata Party's Nirmal Singh was sworn in as Deputy Chief Minister, bringing back a popular government after 11 weeks of Governor's rule, imposed following the demise of Chief Minister Mufti Mohammad Sayeed.

Governor N.N. Vohra also administered the oath of office to 22 Ministers, 11 each from alliance partners PDP and BJP.

GS II : INTERNATIONAL - CHINA : NEW SILK ROAD

China to export electricity along the New Silk Road

In tune with its One Belt, One Road initiative, China is positioning itself as a formidable energy exporter, targeting markets that span from Germany to India along the New Silk Road.

Two factors are driving Beijing's ambitions of emerging as a regional electric supply hub. First, China is already a surplus power producer following a decade of continuous investments at home in all forms of energy. Since 2004, when it suffered chronic outages that threatened to restrain its manufacturing, the Chinese went into overdrive, investing heavily in hydro and coal-fired plants, apart from escalating development of nuclear and renewable energy.

Second, China has mastered ultra-high voltage (UHV) technology, which has allowed State Grid, China's state-owned power behemoth, to transmit electricity from production centres in West - in places such as Xinjiang - to coastal industrial centres in the faraway east.

"China has the technical capacity to increase the voltage to 1500 kilovolts, so that it can transport power 8,000 km away. And it is financially viable to expand," Liu Zhenya, State Grid head said.

It was eyeing other potential markets such as Pakistan, India and Myanmar. Last week, State Grid also tied up with South Korea's utility Korea Electric Power, SoftBank of Japan and Russia's Rosetti PJSC to study the feasibility of establishing an "Asian Supergrid." The study would culminate the 2012 proposal of Masayoshi Son, chairman of Softbank, who had visualised the Supergrid that would source power from Mongolia's huge wind farms and supply renewable power to South Korea, Japan, China and possibly Russia.

Now, with Xinjiang in western China as the hub, China has the proven technological heft to transmit electricity as far as Germany.

While focusing on the One Belt One Road for now, Mr. Liu has even more ambitious plans. Bloomberg News is reporting that State Grid is "actively in bidding" for power assets in Australia, hoping to add them to a portfolio of Italian, Brazilian and Filipino companies. The idea is to connect these and other power grids to a global grid that will draw electricity from windmills at the North Pole and vast solar arrays in Africa's deserts, and then distribute the power to all parts of the world.



 

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