India tax authorities seize $5 bln bills of exchange from trader

CHENNAI, India, Jan 3 (Reuters) - Indian tax authorities areinvestigating a possible financial scam after seizing $5 billionworth of bills of exchange issued by Barclays from thehome of a trader, an official at the local tax department saidon Thursday. The authorities seized five bills of exchange each valued at$1 billion from the home of T. M. Ramalingam during a Dec. 31raid, the tax official said. The bills were not the reasonbehind the raid, he said. Ramalingam had applied for a licence to set up an oilrefinery in Tamil Nadu with the money, the tax official said. The bills were issued on Feb. 25, 2011 and were due tomature in February 2015, according to a copy of one of the billsshown to Reuters by the tax official. "We are in the process of verifying them as there is apossibility of a scam since the value is so high," said the taxofficial, who declined to be named as he was not authorised totalk to the media. Chennai-based R. C. Mishra, director general of Income TaxInvestigation declined to confirm or deny the raid or theinvestigation. The tax authorities have asked Barclays about the impoundedbills, the tax official said. A bill of exchange is similar to abanking draft between individuals or institutions. Tax officials have confiscated Ramalingam's passport andcalled him for questioning on Friday, the tax official said. Neither Ramalingam nor officials at Barclays wereimmediately available to comment.