Mediaboss Marketing

Rs 24.5 lakh cr stashed by Indians in banks abroad: CBI Press Trust of India / New Delhi Feb 13, 2012, 15:06 IST

Indians are the largest depositors in banks abroad with an estimated $500 billion (nearly Rs 24.5 lakh crore) of illegal money stashed by them in tax havens, the CBI Director said today.

India, in particular, has suffered from the flow of illegal funds to tax havens such as Mauritius, Switzerland, Lichtenstein, British Virgin islands etc.

"It is estimated that around $500 billion of illegal money belonging to Indians is deposited in tax havens abroad. Largest depositors in Swiss Banks are also reported to be Indians," CBI Director AP Singh said speaking at the inauguration of first interpol global programme on anti-corruption and asset recovery.

He said getting information about such illegal transactions is a time taking process as investigators have to peel each layer by sending judicial requests to the country where such deposits have been made.

"Fifty three per cent of the countries said to be least corrupt by the Transparency International Index are offshore tax havens, where most of the corrupt money goes. The tax havens include New Zealand which is ranked as the least corrupt country, Singapore ranked number five and Switzerland number seven," Singh said.

He said there is a lack of political will in the leading tax haven states to part with the information because they are aware of the extent to which their economies have become "geared to this flow of illegal capitals from the poorer countries."

The CBI Director said tracing, freezing, confiscation and repatriation of stolen assets is a legal challenge, a complex process which requires expertise and political will.

"Managing the asset recovery investigation is complex, time consuming, costly and most importantly requires expertise and political will. There are many obstacles to asset recovery.

Not only is it a specialised legal process filled with delays and uncertainty, but there are also language barriers and a lack of trust when working with other countries," Singh said.

He said global financial markets allow money to travel faster and further making tracking the money trail in such cases even more difficult which necessitates the organisation of such global training programs as they enhance the knowledge of investigators in tracking assets created out of corrupt and criminal acts.

Singh said criminals are using the territorial issues of investigating agencies to their advantage by spreading their crimes to at least two countries and investing in a third.

"In some of the recent important cases being investigated by the CBI such as 2G, CWG and Madhu Koda, we find that money is taken to Dubai/Singapore/Mauritius from where it goes to Switzerland and other such tax havens.

"For criminals all it involves is setting up of a few shell companies and then making layered transfers from account to another in a matter of hours as there are no boundaries in banking transactions," he said.

He said the World Bank estimates the cross border flow of money from criminal activities and tax evasion is around $1.5 trillion of which $40 billion is bribe paid to government servants in developing countries.

Singh quoted the report to say that only $5 billion of this money has been repatriated during 15 years.

See original here:
Rs 24.5 lakh cr stashed by Indians in banks abroad: CBI

AP Singh is tired of people calling India corrupt and holding up tax havens as models of transparency.

Singh, the director of India's Central Bureau of Investigation, gave a speech yesterday trashing the corruption ranking by Transparency International:

"Fifty-three per cent of the countries said to be least corrupt by the Transparency International Index are offshore tax havens, where most of the corrupt money goes. The tax havens include New Zealand which is ranked as the least corrupt country, Singapore ranked number five and Switzerland ranked number [nine].

"There is a lack of political will in the leading tax haven States to part with information required to trace such assets as they are all too aware of the extent to which their own economies have become geared to this flow of illegal capital from the poorer countries. India in particular has suffered from the flow of illegal funds to tax havens such as Mauritius, Switzerland, Lichtenstein, British Virgin Islands, etc."

Singh's point comes down to whether you look at where illicit funds come from or where they go.

beyondbric's Neil Munshi's offers a counterargument, however, noting that India has declined to participate with Switzerland to track down illicit funds.

See original here:
Most Of The World's 'Least Corrupt' Countries Are Offshore Tax Havens

DUBLIN--(BUSINESS WIRE)--

Research and Markets (http://www.researchandmarkets.com/research/3d6f9c/wealth_management) has announced the addition of the "Wealth Management in Asia's Offshore Centers" report to their offering.

This report is the result of WealthInsight's extensive research covering the Wealth Management industry in Asia. It covers Asia's major offshore centre's namely: Hong Kong and Singapore.

Asia is the fastest growing region in the world in terms of wealth. Financial centres such as Singapore and Hong Kong are ideally located to benefit from this new wealth. The report analyses Hong Kong and Singapore's Wealth Management and Private Banking sector, and the opportunities and challenges therein.

The report features:

Political and Economic reviews Competitive Landscape of the Wealth Sector in Hong Kong and Singapore Challenges and Opportunities for the Wealth Sector in both countries Leading Companies in the Wealth Management and Private Banking Industry in Hong Kong and Singapore Family office information

Reasons To Buy:

The WealthInsight Intelligence Center Database is an unparalleled resource and the leading resource of its kind. Compiled and curated by a team of expert research specialists, the Database comprises up to one hundred data-points on over 100,000 HNWI, private banks, wealth managers and family offices around the world. With the Database as the foundation for our research and analysis, we are able obtain an unsurpassed level of granularity, insight and authority on the HNWI and wealth management universe in each of the countries and regions we cover. Comprehensive forecasts to 2015.

Companies Mentioned:

ABN Amro ABSA Asia Ltd ANZ Private Bank Bank of America (Asia) Ltd Bank of Taiwan Banque Pictet Banque Prive Edmond de Rothschild Barclays Wealth BNP Paribas Citi Private Bank Credit Suisse DBS Bank Deutsche Bank EFG Bank Fubon Bank Goldman Sachs J.P. Morgan Private Clients Julius Baer Morgan Stanley Asia Limited RBS Coutts Rothschild Standard Chartered Private Bank And many more...

For more information visit http://www.researchandmarkets.com/research/3d6f9c/wealth_management

See the original post here:
Research and Markets: Wealth Management in Asia's Offshore Centers: Hong Kong and Singapore

2/14/2012 3:46 PM ET

|

By Brett Arends, SmartMoney

Mitt Romney has been criticized for parking some of his fortune in Caymans Islands accounts, but he and other wealthy people aren’t really trying to duck taxes there.

One thing's for sure. Mitt Romney didn't send his money down to the Cayman Islands to work on its tan.

The former Massachusetts governor has been criticized by some for factor of five in the last 10 having some of his vast fortune in the Caribbean offshore banking center. Yes, it was politically clumsy. But it was not uncommon, and -- assuming he has filed all the right disclosures -- it was perfectly legal.

But if you're not running for president, and don't have to worry about public relations, what are the legitimate reasons for moving money offshore?

I spoke to Jim Duggan, a partner at Chicago law firm Duggan Bertsch, to get the skinny. He's a tax and estate planning attorney who specializes in wealth management issues for the very rich, and he's been practicing in this area for nearly 20 years.

He says a growing number of wealthy people are looking into moving some of their money offshore. "The interest in offshore planning has increased basically by a factor of five in the last ten years," he says. Clients want to talk to him about it all the time.

Why?

Contrary to popular opinion, it's not really to save on taxes.

That's because American taxpayers are taxed on their worldwide income -- so if you're making $10,000 (or $10 million) in interest on a bank account in, say, the Caymans or Switzerland, you're getting taxed by Uncle Sam as if you're making it in a bank account here.

It's easy to scoff and assume the rich are hiding their money and cheating. Doubtless some are. But enforcement is tight, and the penalties aren't so much draconian as medieval. They are far more severe than for tax evasion onshore.

And there are plenty of tax shelters available here in the U.S. anyway -- such as trusts in low-tax states, life insurance and variable annuities.

So what are the real reasons the rich are casing the Caymans with their cash?

There are two, says Duggan: Litigation risk and political risk.

Yes: Political risk. Or, as he puts in a nice legal euphemism, "jurisdictional diversification."

Litigation risk is the old reason. You could get hit by a crazy lawsuit here in the U.S. The wealthy are an easy mark, and anything onshore is vulnerable. But the U.S. courts don't have jurisdiction overseas and if you plan things right you have at least some chance of protecting money held offshore, Duggan says. "It keeps you away from our court system and the caprices of our courts," he says.

The new reason, though, is political risk: "Diversification from our government, policies and banking systems," says Duggan. The last few years have shaken faith in our system. Duggan says growing numbers of his clients are worried about the financial system, confiscation -- the whole shebang. "They're concerned about our government and where our society is headed. There's a lot of socialistic tendencies, capital controls, the redistribution of wealth."

Once again it's easy to scoff. Financially, the very wealthy have probably never had it so good in this country. Corporate profits and financial assets are booming. Tax rates on dividends and long-term capital gains are very, very low. But Duggan says the wealthy feel under attack, and government rhetoric is making them nervous.

But there's a problem here. Imagine a future government did decide to confiscate assets. They'd go after the money you held in Switzerland just as much as the money you held in New York, and the penalties for tax evasion would be as medieval as they are now.

The only way to save your money would presumably be to renounce your citizenship and move into exile. Even then the IRS might come after you. Do you want to spend the rest of your life living next to Roman Polanski in France?

Once again, all this makes you see the appeal of holding some gold within a portfolio.

Personally, I don't see any reason to think this administration is going to go after the so-called 1%. Too many policymakers are members of that elite group already -- or they have high hopes of joining after they retire.

More from SmartMoney.com:

Original post:
Why rich stash cash offshore

In a Wall Street universe populated by marquee name stocks, the lesser known entities are the stars of the rally so far this year.

The Russell 2000 index, which tracks stocks with a small market capitalization, is nearing its record high with a rise of about 11 percent in the year to date. That outstrips the Russell 1000 index that measures Wall Street’s large capitalization stocks and the Standard & Poor’s 500-stock index that measures the broader market.

The surge in the so-called small-cap stocks — companies whose total share value is $3 billion or less — indicates that investors’ appetite for risk is growing as signs of recovery persist in the United States and euro zone leaders make progress in containing the debt crisis, market participants say.

After investors drained more than $15 billion out of small-cap stocks last year, the largest amount since 2007, they have sunk about $2.4 billion back into those equities so far this year, according to data provided by Lipper, a Thomson Reuters company.

“It is a decent confidence barometer,” said Scott Wren, a senior equity strategist for Wells Fargo Advisors. “Investors are confident enough to buy some of these small companies, betting that the U.S. economy is going to continue to grow.”

Most of that money poured into the small-cap stocks in the seven days that ended Feb. 8, the last tally by Lipper. During that time, the Labor Department reported a gain of 243,000 jobs in January and the lowest unemployment rate since early 2009, while another report, from the Institute for Supply Management, showed that economic activity in the nonmanufacturing sector grew in January for the 25th consecutive month.

Tom Roseen, a senior analyst at Lipper, said there was a similar inflow into small caps in the beginning of 2011, but this year’s inflows were notable because they were a turnaround from a full year in which investors focused on dividend-paying and large-capitalization stocks.

But analysts were also cautious in ascribing too much staying power in the risk trade. Volatility could return to equities because of the entrenched euro zone debt problems, the potential for a recession in Europe and concerns about economic growth in the United States.

Steven G. DeSanctis, a small-cap strategist with Bank of America Merrill Lynch, noted that a lot of the inflows so far this year were by exchange-traded funds, which are highly liquid, and thus could just as easily flow out.

Pharmaceuticals, materials and technology companies are showing particularly robust returns among small caps so far this year. Inhibitex, FriendFinder Networks and Georgia Gulf are among the best small-cap performers in terms of returns, according to data tracked by the Russell index.

The stock price of Inhibitex, a biopharmaceutical company, is up more than 130 percent, mostly because it was acquired. Georgia Gulf, which makes chemical and plastic products, is up 74 percent, and FriendFinder, an Internet networking company, is up more than 200 percent.

The rebound in small-cap stocks is a sign for some analysts of a broader recovery in the financial markets. In the second half of last year, the markets were buffeted by a period of volatility from the European crisis and the credit rating downgrade of long-term United States debt, contributing to a fall in the Russell 2000 for the year of about 4 percent.

But so far this year, the broader market as measured by the Standard & Poor’s 500 has had its best start since 1987. As of Monday it was up 7.5 percent for the year to date. Small-cap companies are not traded as frequently, and therefore their stock prices can be choppy. And there are fewer analysts researching these companies for investors, unlike with big names like Apple. They also are more likely to be the object of takeovers, like Inhibitex, which Bristol-Myers Squibb said in January it would acquire for $2.5 billion.

Mergers and acquisitions, which are expected to push ahead as companies come off a period of hoarding cash, usually involve small-cap companies.

“This year we are expecting an acceleration of M.& A. activity,” said Christopher J. Colarik, small-cap portfolio manager for Glenmede Investment Management. “Larger companies look for growth, and there are a lot of clean balance sheets.”

This was especially true in the pharmaceutical field, said Jon Eggins, portfolio manager at Russell Investments.

Since 2008, drug companies have been cautious about large investments in new research, but they are also faced with the expirations of profitable drug patents and looking for ways to bridge the potential shortfall in earnings, he said in an e-mail reply to questions.

And their revenue is mostly generated inside the United States, which means they are less influenced by turmoil in Europe.

“They are more of a niche market, and they may have a lot of room to expand geographically and internationally,” Mr. Wren said. “Their earnings growth rates are far in excess of what a large company might be.”

In the last 10 years, the Russell 2000 index has returned 5.6 percent, compared with 3.3 percent for the Russell 1000. “That added return premium hasn’t been for free, though, as there has been higher risk associated with this return,” Mr. Eggins said.

Mr. DeSanctis, the strategist with Bank of America Merrill Lynch, said his firm’s forecasts included an 11 percent return for small-cap stocks in 2012, in line with the historical annualized average.

“We have already achieved that in the first six weeks of the year,” he said.

More From NY Times

Original post:
Small-Cap Stocks Surge Ahead of the Big Names