Skip to main content

Detect and penalise shell companies proactively SIT

By
The Special Investigation Team (SIT) on black money has suggested amechanism for proactive detection of shell companies and deterrent penal provisions against persons involved in setting them up. It also wanted those making donation and recieving it in cash to be prosecuted under the prevention of corruption act ( PCA), particularly in the context of private schools and colleges. In its third report, made public on Friday by the finance ministry, the SIT wanted the Serious Frauds investigation Office (SFIO) to use MCA 21 filings to detect black money and more teeth for the Directorate of Revenue Intelligence ( DRI) to investigate in special economic zones. Pointing out that schools and colleges are accepting large donations by cash, running in even more than ? 1 crore, SIT wanted them to be booked under PCA, deeming them to be public servant.
The SIT recommended the SFIO, which comes under the ministry of corporate affairs (MCA), actively and regularly mine the ministry’s ( MCA21) database for certain red flag indicators.
“These indicators could be based on common Director Identification Number ( DIN) numbers in multiple companies, companies with the same address, same contact numbers, use of only mobile numbers, and sudden and unexpected change in turnover declared in returns,” the SIT said. According to the SIT, the SFIO can prepare a set of indicators based on its experience and in consultation with other law enforcement agencies.
The SIT, headed by Justice (retired) M B Shah, has also observed that in many cases, the shareholders or directors of such shell companies are persons of limited financial means like drivers, cooks or other employees of the main persons who intend to launder black money.
“Section 89( 1) and 89( 2) of the Companies Act, 2013, provides for persons to declare if they have “ beneficial interest” in the shares of the company. Section 89( 4) enjoins the central government to make rules to provide for the manner of holding and disclosing beneficial interest and beneficial ownership under this section,” said SIT, adding that the MCA should frame such rules at the earlies.
Business Standard, New Delhi, 25th July 2015 

Comments

Post a Comment

Popular posts from this blog

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

By
  India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said.   Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm
Post a Comment
Read more

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep
Post a Comment
Read more

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

By
  India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem.   “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and
Post a Comment
Read more