Skip to main content

SIT tells probe agencies to tighten noose around shell companies

By
The Special Investigation Team (SIT) on black money has recommended that law enforcement and intelligence agencies such as the Serious Frauds Investigation Office (SFIO) and the Enforcement Directorate ( ED) examine the cases of persons holding directorships in more than 20 companies and more than 20 companies operating from the same address to detect shell companies involved in generation of black money. In its third report, SIT has found that 2,627 personsaredirectorsofmore than 20 companies in violation of the new Companies Act. To tighten noose around shell companies, it has recommended that SFIO to activelyandregularlymine( Ministry of Corporate Affairs) MCA- 21 database.“ Theseredflagindicatorscould be based on common DIN ( Director Identification Number) in multiple companies, companies with same address, same contact numbers, use ofonlymobilenumbers, suddenand unexpected change in turnover declared in returns,” the report said. Itsaidtheseindicatorsareillustrative in nature and the SFIO office could prepare a set of indicators based on its experience and consultation with otherlawenforcementagenciessuch as the Central Board of Direct Taxes (CBDT), theEnforcementDirectorate (ED) and the Financial Intelligence Unit ( FIU). Once certain companies are identified through data mining, the list of such high- risk companies shouldbesharedwithCBDTandFIU for closer surveillance, SIT said.
In case after investigation or assessment by CBDT, a case of creating accommodation entries is clearly established, the matter should be referred to SFIO to proceed under relevant sections of IPC for fraud.
SFIO should also refer the matter to Enforcement Directorate for taking action under PMLA for all such cases of money laundering, SIT said.
Amit Maheshwari, Managing Partner, AShok Maheshwary & Associates, said, “ What the SIT has said is a very well- knownfactandthese bogus companies have long been a major facilitator of domestic black money. A complete 360 degree profiling by data mining from Ministry of Corporate Affairs, along with sharing of data with Financial Intelligence Unit and CBDT will become an effective deterrent for these shell companies operators and will wipe them out.” SIT found out that a total of 345 addresseshaveatleast20companies operating from the same address.
Thereare13,581companiesthatshare their address with at least 19 others. While there is no specific Act or rule whichdebarscompaniesfromhaving the same address, SIT has desired greater vigilance be accorded by law enforcement and intelligence agencies —CBDT, CBEC, ED and FIU, while examining the operations.
Business Standard, New Delhi, 4th Nov. 2015

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more