The Indian government was already probing some of the names that feature in the investigation into the millions of leaked documents as part of the Pandora Papers.
"Some of the names were known and the probes are already underway. The rest we are looking into. The government has financial information exchange agreements with most of these countries where these offshore trusts are allegedly located," a senior government source told Outlook Business. He spoke on strict conditions of anonymity.
An investigation carried out by the International Consortium of Investigative Journalists (ICIJ), which includes The Indian Express, has revealed how elites of 91 countries have found ways to allegedly hide their financial assets from scrutiny.
"People linked by the secret documents to offshore assets include India’s cricket superstar Sachin Tendulkar, pop music diva Shakira, supermodel Claudia Schiffer and an Italian mobster known as ‘Lell the Fat One’,” says ICIJ in its report.
ICIJ's documents expose offshore dealings of the high and the mighty like King of Jordan, the presidents of Ukraine, Kenya and Ecuador, the prime minister of the Czech Republic and former British prime minister Tony Blair. The files also reveal financial activities of Russian President Vladimir Putin’s “unofficial minister of propaganda” and more than 130 billionaires from Russia, the US, Turkey and other nations.
The leaked records come from 14 offshore services firms from around the world that set up shell companies and other offshore nooks for clients often seeking to keep their financial activities in the shadows.
"Being a beneficiary of an overseas trust, to my mind, by itself doesn't mean it is any infraction of any law, because you are just a beneficiary until an event happens," a prominent tax consultant from among the big four accounting firms, told Outlook Business on the condition of anonymity.
As an Indian resident and citizen, a beneficiary of an overseas trust in their individual capacity, has an obligation to ensure that the settlement is as per the laws and is disclosed wherever required.
“What needs to be ascertained is whether a particular trust is owning property and/or wealth, and is distributing income, which as not ill-gottened,” said the tax expert.
It says the global investigation provides an "unequalled perspective" on how the rule of law has been “bent and broken” around the world by a system of financial secrecy enabled by wealthy nations.
"A legal trust is not any longer just for tax planning. It's more about an orderly succession of one's wealth. When you extrapolate individual bequest to a large bequest, that's where the need for a trust arises - for a more orderly succession. Chances of challenge is less because it's institutionalised," the expert said.
Then there is also the aspect of on-shore trusts versus off-shore trusts. As long as a particular individual or business has legitimate overseas businesses, then there are merits to off-shore trusts, explained the government source quoted above.
The ICIJ analysis of the secret documents identified 956 companies in offshore havens tied to 336 high-level politicians and public officials, including country leaders, cabinet ministers, ambassadors and others.