rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Broker caught with $5 billion US bonds

Broker caught with $5 billion US bonds

Last updated on: January 3, 2013 09:48 IST

Broker caught with $5 billion US bonds

N Sundaresha Subramanian in New Delhi


T
he Tamil Nadu-based broker who was caught by the Income tax department with US Treasury bonds estimated to be worth Rs 28,000 crore (Rs 280 billion) or around $5 billion was the member of a commodity exchange, according to officials familiar with the matter.

"The person is member of a commodities exchange from Dharapuram in interior Tamil Nadu," one of them said. He added the broker was not registered in any of the stock exchanges.

The broker's house and office were searched following a tip-off from the Financial Intelligence Unit, newspaper reports quoting sources said, adding that they are trying to figure out how such a large amount of US bonds were available with one person.

The tip-off came from the branch of a foreign bank in Chennai "and the bonds seem genuine", media reports said on Wednesday.

However, another senior official who has seen such hauls earlier said, "The bonds are most likely to be fake. I have come across such bonds in millions and billions of dollars. Eventually, they will be worth nothing."

If corroborated, the amount would nearly equal the total black money seized in two years. Tax experts are, however, sceptical about the possibility of an Indian citizen holding such bonds in India as they cannot be converted into rupees or traded here.

An Indian citizen can hold foreign currency assets of up to $200,000 in all forms but the holding has to be overseas. Any such investment made abroad in movable assets has to be converted into Indian currency on repatriation.

A bond issued by the US Fed can be held by a citizen from a country with convertible currency but India is not one of them.




Source: