The Enforcement Directorate on Saturday conducted raids at 100 locations in 16 states as part of its nationwide crackdown on shell companies. Officials told PTI that the crackdown has been initiated under the provisions of the Prevention of Money Laundering Act and the Foreign Exchange Management Act to check money laundering and illegal foreign exchange transactions.
Several teams conducted raids at 300 shell companies across Bengaluru, Delhi, Chennai, Kolkata, Ahmedabad and Chandigarh, among others. The crackdown was ordered by the Prime Minister’s Office a few weeks ago. The agency has already attached assets of several shell firms in the past one week. The agency has also arrested a few people on charges of moving undisclosed money through shell companies, reported The Hindu. Besides, the government plans to maintain a database of shell companies and their directors.
There are about 15 lakh registered companies in India, but only six lakh of them file their annual returns. An official told NDTV that it had been found that 1,155 shell companies had been used as channels by more than 22,000 beneficiaries to conceal around Rs 13,300 crore in the past three years.