ED to probe unreported account holders in HSBC, LGT Bank

MUMBAI: The Enforcement Directorate will probe unreported foreign bank account holders in LGT Bank and HSBC, whose details were furnished to the Indian government by Germany and France, as part of investigations into the case of data stolen from the bank.

The income-tax department has already taken action against the account holders by slapping interest and penalty on the amount found in their accounts with the LGT Bank in Liechtenstein, a tax haven located between Austria and Switzerland.

In at least eight cases in Mumbai, the department has started prosecution proceedings.

While Indian account holders denied any knowledge of these accounts, bank records show them as being beneficiaries of certain trusts. These account holders also denied knowledge of the trusts which opened the accounts in their names. Interestingly, despite disowning the accounts and the amounts deposited in them, almost all account holders paid interest and penalties without protest, said people familiar with the proceedings in the I-T department.

The ED will initiate a probe into the account holders of LGT Bank and can access information once the I-T department starts prosecution proceedings, after which the documents are in public domain. Provisions in tax treaties prevent the I-T department to part with information directly to ED.

Further to the raids made on the basis of information on holders of accounts with LGT Bank, the I-T department has also carried out several raids in last two months on information provided by France. Details of about 700 account holders have been handed over to India by the French government. The information provided to the I-T authorities include account holder's name, passport number and address as shown in the passport.