Published>Fri, Apr 23 10 02:22 AM
Corporate India has emerged smarter after the heat of the ongoing tax operations against IPL franchises. Several top industrial groups, including RIL and GMR, have approached the finance ministry to find out how far the government plans to go to unearth the trails of the funding for the cricket league.
RIL chairman Mukesh Ambani owns the Mumbai IPL team, while GMR owns the Delhi team. Corporates are obviously a bit jittery over the scare being spread over the pre-mature leaks on suspected tax evasions by IPL franchises and persons behind them. Corporate houses are also worried over the probe's focus on use of tax havens by investors, since this is legitimate unless round tripping is involved.
For obvious reasons, the government does not want to spell out the details of the operations and how long they will run. However, as top corporate leaders, including some from the Sensex thirty, rang up the finance ministry this week, the ministry officials in turn, have taken upon themselves to explain to them the context of the operations.
As one aide of a senior leader explained, with almost all companies having exposure abroad for equity and debt, even a cursory visit from the tax officials would raise question marks. However he declined.
Ministry officials have responded to these calls by explaining why it has been necessary to launch the current drive and have clearly ruled out any witch-hunt.
As part of the dialogue, it has also been explained that the operation will be seen positively among the global investors as a sign of the government's no-nonsense approach to corruption. However, as the searches are on, one of them said there is no scope to share any details. But as a follow up measure the ministry has instructed the revenue department to avoid publicity. The Mumbai office of the Directorate General of Investigation for instance has become absolutely no entry zone for media since Wednesday. But, he said the ministry is appreciative of the negative impact the operations had on segments of corporate India.
The industrial leaders have explained to the government that the concern is more than the visit itself. At stake is also the rising interest to finance the Indian sports industry, which is developing as an attractive investment opportunity. But most sport bodies, like the IPL, are opaque in disclosing the source of financing and its usage.
Meanwhile, as the scope of the survey has spread beyond India, the government for the first time ever has decided to track data from the Financial Intelligence Unit. The FIU includes a vast array of bank data that is shared by the signatory countries.
Source: Web Search
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