Saturday 22 January 2011

Recovering Indian Loot @ Swiss Banks

Recovering Indian Loot @ Swiss Banks

We've been bombarded on all kinds of media - newspapers, magazines, websites, TV Channels. All of them. On almost a single topic: Recovering Indian Loot lying idle in Swiss Banks.

At a conceptual plane, it is a nice coffee-table talking topic. We can claim any figure that comes to our mind (as long as the number of digits exceeds a dozen!) to be the funds that "rightfully belongs" to our poor farmers which has found its way to those mysterious numbered accounts in Swiss Banks.

However, in practice, if someone has any realistic hope of bringing back to India some of those funds, perish the thought.

There's no way in which any of those funds are coming back any time soon.

Here are a few reasons:

  • The guy with the money makes the rules. Today, the money is with the Swiss Bankers. If they say that "We can't violate the strict Banking Secrecy laws", it simply means: "Sorry buddy, try some other trick. We're not going to sing. Certainly we have no intention of giving the money so easily."
  • Might is right. If USA managed to bull-doze UBS to reveal crucial info about account-holders, we must remember the genuine tilt in the power equations between US & Swiss authorities.

If, in spite of the above two points, if folks in Indian media houses, NGOs, Social Activists, RTI Activists, etc. still believe that we stand a chance of seeing all that money in our life-time, I'd like to emphasise a couple of additional points:

  • The guy with the money makes the rules. The guys who deposited all those ill-gotten funds are not the typical "Aam Aadmi". They are all sophisticated, rich, well-connected, powerful money bags. They could be businessmen, politicians, movie stars, sportspersons, etc. But they are all VVIPs. Chances are bright that before sending all that money to those famed Swiss Banks, they would have used the able services of a small army of Chartered Accountants, Advocates, etc. Before we give a minor loan to a friend, we ask a thousand questions about the purpose, ability to repay, intention to repay, etc. They would have certainly asked even more questions before sending all that money to Swiss Banks. They are certainly likely to have used all legal loopholes available before sending such funds. And, they are likely to have created even more legally tenable loopholes to transfer money to the Swiss Banks.
  • Might is right. Folks who "rightfully" own all those funds are certainly going to do all they can to keep it within their own control. Why would they try to indulge in activities that will result in losing control of the very same funds???

Considering all the above, we can

  • Yell all we want
  • Have all the panel discussions that we care to
  • Write editorials in all newspapers
  • To be followed up with letters to the editors
  • And blog posts

Result: Lots of entertainment and noise, and little else.

For those of you who think that I'm cynical, I wish to admit that I am, indeed, realistic. If that also implies a healthy dose of cynicism, so be it! That's also why it is being posted on Multiple Shades of Grey!

For those of you who wonder as to why this is posted on the Financial Views of Mr. N in addition to Multiple Shades of Grey, please remember that this will be a good source of volatility in linked share prices once the names start tumbling out eventually. Use it to your advantage.

Regards,

N


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