A meeting in the Prime Minister’s Office (PMO) was held to review the functioning of ‘shell companies’ in India.
This review — which also involved senior officers of various departments of various departments — was undertaken to prevent the misuse of shell companies for money-laundering and tax evasion, especially in the context of unearthing black money post demonetisation.
Shell companies are those which do not conduct any operations and generally used as vehicles for money laundering.
There are about 15 lakh registered companies in India and only six lakh companies file their annual return. This means that a large number of these companies may be indulging in financial irregularities, a PMO release said.
In a small sample analysis of such companies, it has been found that ₹1,238 crore cash has been deposited in these entities during the November-December period.
Punitive actionHarsh punitive action will be taken against the deviant shell companies which will include freezing of bank accounts, striking off names of dormant companies, invocation of Benami Transactions (Prohibition) Amendment Act 2016, the release added.
A task force with members from various regulatory ministries and enforcement agencies has been set up under the co-chairmanship of the Revenue Secretary and Corporate Affairs Secretary to monitor the actions taken against deviant shell companies by various agencies.
Also, winding up process has been initiated in respect of 49 shell companies.