Madras HC judge suspends LOC against Karti Chidambaram till Sept 4th

How High Networth Individuals (Karti claims to be one) park their money in Tax Havens

How High Networth Individuals (Karti claims to be one) park their money in Tax Havens
How High Networth Individuals (Karti claims to be one) park their money in Tax Havens

Karti must come back and appear before CBI

Based on the assurances given by the counsel for Karti Chidambaram, a Madras High Court judge (Justice Duraiswamy) suspended the Lookout Circular(LOC) till September 4th. Karti’s counsel Gopal Subramanium promised the court that Karti would be back in India by August 28th. He also directed Karti to appear before the Central Bureau of Investigation (CBI) as soon as he returns from his United Kingdom trip.

Unlike the reporting by the mainstream media, this is not a stay; rather the judge suspended the LOC till September 4th.

One wonders as to what pressing matters Karti has in London to attend to! It is a well-known fact that the United Kingdom is the capital of Tax Havens, from where any kind of “adjustment” to one’s portfolio can be made.

Most high net worth individuals (Mr. Karti Chidambaram claims that he is one) seem convinced that they can beat the system. Estimates of the amount of Black Money that has been parked outside of India range between Rs.2,00,000 crores ($30 billion) to Rs.10,00,000 crores ($150 billion).

How is the money stashed away?

The illustration given below gives you an idea of how the richest in the world park their money in tax havens:

How money moves around in Tax Havens
Fig 1. How money moves around in Tax Havens

Any attempt to trace the foreign accounts of a high net worth individual will prove difficult because the title deed(s) can keep moving around (Steps 1, 2, 3 and 4 in the graphic above). It requires a systematic approach to identify the assets. The process can be speeded up if an effective Whistleblower/ Witness Protection program is put in place. The planning of this needs to be elaborate and it takes several individuals/ entities moving concertedly. The steps shown in Fig 1 above are described in detail in my post titled How should India proceed to get back billions from Tax Havens – BringBackBillions , Part 8.

I am sure the judge took all the above into consideration before allowing Karti to fly out to London.

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  1. one question always comes to mind when authorities caught Money Launderer Hassan Ali. Chidambaram who was Fin Minister then, asked the department to send all the file pertaining to the case. Next we hear Mrs. chidu is the defense lawyer representing Mr Ali ( whatever happened to conflict of interest!!!) . Next we see Mr Ali out on bail and that was the end of case.


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