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Credit Suisse under scanner

December 29, 2007 15:41 IST
Close on the heels of the alleged money laundering by farm owner Hasan Ali Khan through Switzerland-based bank UBS, Europe's biggest bank by assets, another Swiss bank, Credit Suisse, has come under scrutiny of the Enforcement Directorate (ED), which investigates foreign exchange violations.

Sources at the ED and Income Tax (I-T) department confirmed that they had approached the Swiss Justice Department to freeze Khan's accounts, which had a whopping balance of $1.8 billion, in the two Swiss banks. As per their documents, the money was deposited into Khan's accounts in just four months during 2006.

Sources said the ED team, armed with documents supplied by the I-T department, had met officials of the Swiss Justice Ministry on January 12 this year.

The banks returned the documents back to ED officials saying the documents were forged. The ED officials were also rebuffed by a Swiss Justice Ministry spokesman, who bluntly said that the documents presented "were incomplete and some of them were forged," said sources.

The justice ministry official had also pointed out that any request to block accounts must not only be accompanied by complete and bonafide documents, but also categorically showed a link between the offences and the eventual funds in Switzerland. Credit Suisse spokesman declined to comment.

UBS deal to buy Standard Chartered Bank's Indian mutual fund business was blocked by the Reserve Bank of India due to the bank's alleged involvement in the money laundering case.

The Swiss authorities informed its Indian counterparts about the forged documents. They even sent a diplomatic note to the Indian Embassy in Switzerland on January 29.

Palak Shah in Mumbai
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