The Enforcement Directorate today launched one of its biggest crackdowns on shell companies across the country. The department carried out searches across 100 locations in India.
The ED also has on its radar over 400 chartered accounts and entry operators, against whom action is likely to be taken. According to early information from sources, among the companies targetted in the raids are those connected to Jagan Mohan Reddy, Mayawati's brother Anand and Maharashtra politician Chhaggan Bhujbal.
So far, the agency has managed to uncover around 2300 shell companies. In Mumbai and Delhi alone the ED has discovered over 1000 such companies. Most of these companies were formed during the period when exchange of the old Rs 500 and Rs 1000 was allowed after the November 8 demonetisation announced by Prime Minister Narendra Modi.
These companies are alleged to have transferred money during the time when exchange of old Rs 500 and Rs 1000 was allowed. The companies are also suspected to be involved in money laundering.
ED officers are going through records of operators who run allegedly shell companies and according to initial information, the companies are suspected to have converted several hundred crores of rupees of black money into white.
The raids are being carried out under the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA) in cities including Delhi, Mumbai, Chennai, Bengaluru, Bhubaneswar, Kolkata and other metros.
The operation is said to be part of Prime Minister Narendra Modi's directive to crack down on shell companies that were used by hoarders and even legitimate business houses to launder money during demonetisation.
ED officials are zeroing on a few individuals who allegedly helped politicians launder money.
One of the individuals who has been the target of a raid is Jagdish Purohit from Andheri (W) in Mumbai. He is suspected to have run 700 companies from a single address.
He is suspected of helping Nationalist Congress Party (NCP) politician and former Maharashtra minister Chhagan Bhujbal of converting Rs 46 crore of black money into white.