The Swiss Attorney General’s office says “it cannot answer questions about persons who may or may not be involved in criminal proceedings.”
On Tuesday (September 17), the OAG – the office of the Swiss attorney general – offered two cryptic responses to several questions posed by this correspondent on the mega money laundering case allegedly involving an unnamed Indian group.
As was reported in India last week, the Swiss Federal Criminal Court delivered a damning ruling on September 12 freezing $310 million belonging to an unnamed ultimate beneficial owner/group. The identity of the group is not revealed but references made to the Securities and Exchange Board of India as well as the Indian Supreme Court suggests the group is the Adanis.
The OAG says: “”Please note that the Office of the Attorney General of Switzerland (OAG) cannot answer questions about persons who may or may not be involved in criminal proceedings. Thank you for your understanding.”
It, however, goes on to say:
“As indicated in the decision of the Federal Criminal Court (FCC) to which you refer (page 2), on 20 July 2023, the Office of the Attorney General of Switzerland (OAG) took over criminal proceedings from the canton of Geneva.
“In the context mentioned in the decision, the OAG is currently conducting investigations into forgery of documents (Art. 251 SCC) and aggravated money laundering (Art. 305bis paras. 1 and 2 SCC). The investigations are ongoing, which is why the OAG cannot give you any further information at this stage. As always, the presumption of innocence applies.”
While Article 251 of the Swiss Criminal Code says “making use of a false or falsified document in order to deceive, shall be liable to a custodial sentence not exceeding five years or to a monetary penalty”, Article 305bis 1.1 says that whoever carries out an act that is aimed at frustrating the identification of the origin, the tracing or the confiscation of assets which he knows or must assume originate from a felony, money laundering is liable to a custodial sentence of up to three years or to a monetary penalty and in serious cases, the penalty is a custodial sentence of up to five years or a monetary penalty.
The charges are “quite serious because this language of course it is their official language, but the charges would be tantamount to forgery of documents and aggravated money laundering,” says a Geneva-based private banker who asked not to be identified.
Who is the ‘brother’?
It is true that nowhere does the Swiss Federal Criminal Court mention the Adanis in its ruling to freeze the US $ 310 million due to the criminal process of money laundering, on September 12. This is precisely the point the Adani Group has made in its response to news reports about the Swiss action.
Yet, the Swiss judicial system appears to be convinced that the needle of suspicion points towards a controlling person/enterprise behind the Ultimate Beneficial Owner (UBO). They seem determined to bring this person or group hiding in the shadows out into the open.
The Swiss determination to act was recently on display when another Indian billionaire was put on trial for ill treating his imported domestic servants from India.
Coming back to the money laundering case, the 10-page abridged version of the ruling in French is full of pointers and revelations. That the criminal activity of money laundering which it alleges pertains to the Adani group may be inferred by its reference to SEBI’s replies to the Supreme Court – which were clearly about the group.
In paragraph 2.6 of the ruling by the Swiss Federal Criminal court, it is clearly stated that “with regard to the Appellant’s argument concerning the causal link between the seized assets and the alleged offenses, the Court recalls that such a link is not required in the context of a sequestration ordered with a view to pronouncement of a compensatory claim (see supra consid. 2.1.2). However, this measure is not excluded in this case, as noted by the MPC (act. 1.1, p. 13 f. of the Federal Public Prosecutor).”
Continuing the ruling, in paragraph 2.7, it mentions that “concerning the show cause notice from the Securities and Exchange Board of India (SEBI; Indian financial regulator) – transmitted to the Court by the Appellant as part of a spontaneous position – in which the latter questions the credibility of Report I., accusing it in particular of misleading and inaccurate declarations in contradiction with the standards of diligence required from entities supposed to be specialized in financial investigation (act. 22), it will have to be analyzed by the MPC (Swiss Federal Public Prosecutor’s Office) within the framework of its investigation and compared with the other elements which appear in the file. The same applies to the Report of the expert committee of the Supreme Court of India of May 3, 2023 (act. 1.27). As it stands, these documents alone do not refute the suspicions weighing on B.”
Report I is clearly a reference to the January 2023 Hindenburg report.
Further, the ruling draws attention to the links “between B. and J,. the brother of the founder and President of the H. group, and the fraudulent scheme described above (act1.1, p.7 ff). The hypotheses presented there were then compared with the information from different banking establishments.”
It follows that at this stage, “the sequestration (freezing of assets) measures are justified in principle.”
The Swiss legal processes ensure that rule of law institutions must live up to their mandate without any fear and impartiality.
In fact, the ruling by the Swiss Criminal Court shows a mirror to the seemingly crumbling Indian legal watchdogs, particularly during the past two years.
Deafening silence by government?
In the run-up to the elections in 2014, the BJP flagged the issue of illegal wealth held by Indians abroad and the need to repatriate it home as one of its main priorities if elected to office. A BJP leader often mentioned a figure of $1 trillion that he said had been siphoned off from India to Switzerland. Later, this proved to be a charade.
However, the current case against the unnamed “Brother” last week offers solid proof of how money laundering started with the transfer of bankable assets from Virgin Islands, Dubai and Singapore to Swiss banks, and later these funds were used to control shares beyond 75% in a particular company, contrary to rules in India.
Strangely, the ruling by the Swiss Criminal Court coincided with External Affairs minister S Jaishankar’s visit to Geneva. It is not clear whether he is aware of it or was informed by his officials. When asked whether the ruling was brought to his notice, the Indian government’s representative in Geneva said, “I should check with our Embassy in Bern or Ministry in New Delhi.”
Ravi Kanth Devarakonda is a financial journalist based in Switzerland.
This piece was first published on The India Cable – a premium newsletter from The Wire & Galileo Ideas – and has been updated and republished here. To subscribe to The India Cable, click here.