235 suspicious accounts probed for alleged ‘benami’ activity last month alone
NEW DELHI hoarded by tax evaders.
It followed a shock decision by Prime Minister Narendra Modi to withdraw high-value bank notes from circulation, compelling millions to join the formal banking sector for the first time. Previously, around 90 per cent of everyday transactions in India were in cash.
Holding real estate in someone else’s name has been a particularly popular avenue for those seeking to legitimise black money and dodge their tax dues.
Those caught out could have their wealth seized, face a sevenyear jail term and pay hefty fines equivalent to 25 per cent of the asset’s value.
Government officials say 235 suspicious accounts were under investigation for alleged benami activity last month, with more than half frozen and properties seized.
But Modi, who was elected in 2014 on a pledge to wipe out corruption and kickstart the economy, has promised more scalps as the dragnet widens.
“It has some very tough provisions. Those holding such property (RM359.64 billion) last year.
The outcome of the trial may tip the scale in the sibling rivalry at the sprawling conglomerate with businesses in hotels, theme parks, duty-free shops, chemicals and assets including Guylian Belgian chocolates and New York’s Palace Hotel.
While chairman Dong-bin, 62, had rallied executives against brother Dong-joo, 63, to consolidate control of the flagship company should start consulting their (accountants),” he said.
In one case, the department said 33 million rupees (RM2.22 million) were hidden in the name of a woman who wasn’t even aware the account existed.
In another instance, US$9 million (RM40 million) was spread across 20 fictitious accounts.
“Even within families, people want to hide their assets from others so will purchase it in someone else’s name,” said Abhishek Goenka from tax and audit firm PwC India. AFP based in Japan, the older brother told Bloomberg News late last year that he was confident he would win control of the group and clear his name in court.
In today’s trial, Kyuk-ho and Young-ja face charges of tax evasion, embezzlement and breach of fiduciary duty, while Dong-bin is under indictment for embezzlement and fiduciary breach. Dong-joo faces one count of embezzlement. Bloomberg
Real estate lawyer Naresh Gupta says new rules introduced by the Indian government to crack down on the practice of hiding fortunes in the names of lowly-paid staff to avoid paying taxes as ‘very draconian’.
Brothers Shin Dong-bin (left) and Shin Dong-Joo are embroiled in a rivalry for control of Lotte Group.