India mulls law to seized assets of financial crooks

NEW DELHI (AFP) - India is considering new measures to seize the assets of "big time offenders" who flee abroad, the finance minister said on Wednesday (Feb 1), after tycoon Vijay Mallya left for Britain last year owing over US$1 billion (S$1.4 billion).

Arun Jaitley flagged a proposal to confiscate the domestic holdings of criminals and financial offenders who have escaped the jurisdiction of Indian authorities.

"In the recent past there have been instances of big time offenders - including economic offenders - fleeing the country to escape the reach of the law. We have to ensure the law is allowed to take its course," he told parliament.

"The law will have constitutional safeguards and the assets in India would stand confiscated until the person submits himself or herself to the law." Jaitley did not expand on the proposal or refer to specific cases.

Mallya has refused to return home from exile in England despite repeated efforts by India's financial crimes agency to question him.

An Indian court in January ordered a consortium of banks to start the process of recovering roughly US$1 billion in loans from Mallya, known for his flamboyant lifestyle.

The government has been driving a blitz on corruption and undeclared wealth, known as "black money", to try to increase tax revenue and curb India's thriving underground economy.

Its shock decision in November to remove all high-value banknotes from circulation was meant to bring billions in undeclared money back into the formal system.

India is one of the world's most cash-intensive societies. Corruption is endemic and strict tax laws encourage people to keep money off the official books.

The wealthy channel money to tax havens such as Switzerland or Singapore, convert it into jewellery, antiques, paintings or property, or send a relative abroad for half the year to avoid tax.

India has run amnesty schemes to try to lure back ill-gotten gains held abroad, but this new proposal would target assets at home to apply pressure to financial crooks.