SIT suggests host of measures to check black money

New Delhi, Jul 25: Seeking a tight rein on black money, the Supreme Court-appointed SIT on Friday recommended enacting tough laws to curb betting in cricket, bring donations to education and religious bodies under tax net, monitoring unusual rise in stock prices and regulating P-Notes.

The Special Investigating Team (SIT) identified circular trading in shares, overseas investments being routed through P-Notes from tax havens, shell companies, mispricing of imports and exports and cricket betting as major sources of black money generation.

Stating that betting in cricket has become sophisticated with use of technology, SIT wanted "some appropriate legislative directions or rules or regulations" to curb the menace of betting.

With half of the Rs 2.7 lakh crore overseas investment using P-Notes coming through tax havens of Cayman Islands, Mauritius and Bermuda, the SIT on black money wanted market regulator SEBI to come up with regulations so as to be able to identify the final beneficiary of Participatory Notes.

P-Notes are instruments issued by FIIs to overseas investors wanting to invest in Indian stock market without registering themselves with the regulator.

SIT said action be taken under Prevention of Money Laundering Act (PMLA) against trade based money laundering through mispricing of imports/exports.

The panel headed by Justice MB Shah (retd) in its third report has also suggested measures to ensure donations by cheques to prevent black money generation in education sector, religious bodies and charities, and sought prosecution of those donating and accepting unaccounted money under the anti-corruption law.

PTI