When the Supreme Court is driven to asking: “What the hell is going on in this country?” (about black money stashed in tax heavens abroad), it is clear that the situation is bleak. The court’s underlying ire is understandable because it had before it the case of Hasan Ali Khan, a Pune-based stud farm owner, which is a wonder of sorts and might even merit inclusion in the Guinness Book of Records. The facts are stark.

Since way back in 2007 it has been alleged that Mr Khan had amassed as much as $8 billion in Swiss banks, making him the biggest offender in this respect. Worse, investigations by appropriate government agencies have reportedly unearthed evidence suggesting that he had links with a notorious arms dealer and could have been involved in gun running and even funding terrorism, apart from money-laundering. Despite all this Mr Khan has been left completely free and untouched for nearly four years while, in the apex court’s words, “even those who violate Section 144 (banning the assembly of more than five persons) are sent to jail”.
To be fair, once in a long while tax authorities did summon him for questioning, but each time he claimed to be ill, and this was always enough for the authorities concerned to let him be. At one time, in response to the public outcry that his “godfathers” were protecting Mr Khan for ulterior reasons, the police, when asked to find him, reported that it could not trace him. Anyone could, of course, have seen him betting at the Pune Race Course at exactly the same time!
It was in this context that the apex court followed up its earlier query with some sharp questions and comments: “We are asking a simple question for a simple answer… Why no custodial interrogation of the people about which (sic) you have information?” In fact, the court went on to inquire whether the government wanted it to appoint an officer to supervise custodial interrogation of Mr Khan. The judges then drew attention to something that is rather stunning, for it suggests that the powers that be may be impeding investigations in black money cases in other ways, too. “It is very unfortunate”, said the judges, “that three key officials of the Enforcement Directorate investigating the black money scandal have been abruptly transferred mid-way into the investigations”.
There is one other aspect of this curious case that hasn’t yet been mentioned in the Supreme Court but has been raised in the Maharashtra Assembly and repeatedly published by the media without inviting any contradiction by anyone. Mr Khan is said to have had a meeting with Congress president Sonia Gandhi’s political adviser, Ahmed Patel. If no such meeting took place, the wrong report must be demolished. But, if did, the country is entitled to know what transpired at it.
Under the circumstances, is it any surprise that most people believe that the ruling establishment is under some compulsion to leave Mr Khan and others of his ilk alone? Some are even suggesting blackmail.
Finance minister Pranab Mukherjee is the ablest and most experienced member of the Manmohan Singh government. He is the only troubleshooter that the United Progressive Alliance (UPA) government and the Congress have. Yet, whenever the issue of black money in general, and Mr Khan’s case in particular, is raised, he tends to lose his temper. Only a few days ago when some members of Parliament (MPs) expressed the apprehension that the Pune stud farm owner might escape, Mr Mukherjee angrily said that he would not be allowed to do so. And then he virtually screamed that the government had to act according to the law of the land. In view of the Supreme Court’s observations, would Mr Mukherjee please explain which law of the land prevents him from subjecting Mr Khan to “custodial interrogation”. All that has happened so far is that the tax authorities have made a demand on Mr Khan for tax and penalty amounting to `40,000 crores.
As was perhaps to be expected, after the Supreme Court’s harsh observations, the Enforcement Directorate, at last, took Mr Khan into custody around midnight on Monday, barely 12 hours before the government law officers were to report to the apex court. What needs to be watched in future is how and at what pace the case is investigated and prosecuted.
On the issue of black money generally, Mr Mukherjee has so far got away by pleading the government’s inability to disclose the names of even those crooks that have plundered national wealth by unlawfully hoarding black money in 77 tax havens that the government knows. The reason for the inability is quaint: the confidentiality clause in the double taxation avoidance agreements with the countries concerned. Tax evasion is not the only crime the owners of foreign hoards of black money are guilty of. Swiss banks do not consider tax evasion a crime but even they are prepared to disclose all relevant information if they are furnished evidence of any other criminality. Repeatedly, these banks have lamented that India does not furnish the required evidence. What an irony it is that in Mr Khan’s case the documentary evidence forwarded to the Swiss authorities turned out to be “forged”. Thereafter nobody tried to hunt for the real documents.
That apart, the fact remains that the UBS of Switzerland gave to the United States the names of 250 US nationals first and then of another 4,000 American citizens maintaining accounts with them without asking for any proof of criminality. More remarkably, Swiss authorities froze all bank accounts of Hosni Mubarak without anyone asking for it. In the case of Col. Muammar Gaddafi, all banks of European Union have followed suit.
Whatever has happened about black money so far is dismal, to say the least. Now, at least, let the UPA government tackle the menace as seriously as the Supreme Court wants it to.