Kashinath Tapuriah and India’s hunt for black money

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November 17th, 2012 Dev Chatterjee

Kashinath Tapuriah, a Kolkata businessman, had planned his retirement well. After he retired from family business, Tapuriah  was living a frugal life in the City of Joy with his wife – going to the temple twice a day; attending  prayers in the evening and occasional visit to the hospital like any other senior citizen. What he did not expected that at 75, he would be spending his life’s last years in Mumbai’s most notorious Arthur Road prison in the company of killers and terrorists.

Last year, Tapuriah was charged by the enforcement directorate, along with co-accused Hasan Ali Khan under the Prevention of Money Laundering Act 2002. His crime: Tapuriah came in contact with Hasan Ali in April 1992 to seek a Rs 60 crore loan to rehabilitate his company, Incab Industries.  The money promised by Ali never came but after almost a decade later, the ED and Income Tax department started knocking at his doors to investigate India’s “biggest” money laundering ever worth billions of dollars. Tapuriah, who pleads innocence at Mumbai courts, is in Arthur Road prison since March last year, waiting for his bail plea to be heard by the Sessions Court.

Tapuriah defence says he never opened or operated any foreign accounts like Hasan Ali and he never received any money from any foreign country or accounts. On the contrary, Tapuriah says he is a victim of crime rather than the perpetrator and has prayed for bail on medical grounds.

Tapuriah’s case just reflects the lacunae in the Indian government’s efforts to fight black money and corruption. If the Courts agree with the ED that Tapuriah is guilty then he should be convicted by now and considering his advanced age, his case should be heard by a fast track court. But if he is innocent, what happens to his life’s two precious years now already spent in the prison?

If Arvind Kejriwal is to be believed than almost every top business leaders in India operate foreign accounts. Many, like Naresh Goyal of Jet Airways, can legally operate a foreign account as they are non-resident Indians. Others biggies like Mukesh Ambani’s business empire in foreign countries is so big that having an account abroad is more to facilitate business operations rather than to stash money abroad.

In the past, it was difficult for the ED to prosecute any one  as none of the foreign banks cooperate with the Indian law enforcing agencies with information. In many cases, when information is offered by the foreign regulators, our own investigating agencies are not in the mood to receive information and in fact delay any meetings with the foreign agencies.  The Indian banking regulator, the Reserve Bank of India do not even makes its orders on offenders public on its website like its counterparts in the UK and the US. In fact, both the Sebi and RBI have a consent mechanism under which an offender can pay a fine and walk free.

By going after small fish, the investigators are just harassing those who do not have access to expensive lawyers and political bigwigs.  There are thousands of Tapuriahs in the Indian jails who are waiting for justice in the economic offences cases. The question to ask is: Who will be responsible for the ED’s actions if, at a later stage, Tapuriah is found not guilty by the courts?

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