ED conducts raids over 16 states, over 300 shell companies under scanner

New Delhi: Multiple teams of the Enforcement Directorate (ED) swooped across the country conducting raids and cracked the whip on over 300 shell companies. The ED actions came on preliminary findings that most of these companies conducted "illegal transactions" during the demonetisation period in November and December 2016.

According to official sources, the search was launched across 16 states and number of business hubs in the country, including New Delhi, Mumbai, Chennai, Bengaluru, Bhubaneswar, and Kolkata. Sources told UNI that the searches were being carried out under the provisions of the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA) to check instances of money laundering and illegal foreign exchange transactions. Today's developments come as a follow up of the "mandate" given to the ED by Special Task Force that was recently set up at the personal initiative of Prime Minister Narendra Modi.

Finance Ministry sources informed last week that the ED has recently attached assets worth crores of many shell firms, the government for its part was committed to taking actions against such companies. These 'shell companies' are floated to act as front entities for individuals carrying out transactions and in the process the concerned individuals and operating companies conceal their identity, sources said.

There have been allegations lately that several shell companies swindled an estimated Rs 3,900 crore during the demonetisation period. Minister of State for Corporate Affairs Arjun Ram Meghwal recently said, “In one of the investigations by Serious Fraud Investigation Office it was found that a group of 11 companies had laundered money to the extent of Rs 3,790 crore during the period 2004-05 to August, 2010.” (UNI)