Shell firms: ED conducts nationwide searches on 500 firms

PTI Feeds
Mumbai, May 22 (PTI) The benchmark BSE Sensex rallied over 227 points in early trade today on buying in FMCG, banking and IT stocks by investors enthused by global rally in stock markets. The BSE 30-share index surged 227.44 points, or 0.75 per cent, to 30,692.36 points. The gauge had gained 30.13 points in the […]
Shell firms: ED conducts nationwide searches on 500 firms

New Delhi, Apr 1 (PTI) The Enforcement Directorate (ED) today conducted country-wide searches at 110 locations as part of its major crackdown on 500 shell companies suspected to be generating huge amounts of black money.

The raid operations across 16 states began early morning with the ED sleuths swooping down at market places, business centres, residential premises and even houses put up on rent to hunt down the allegedly dubious and suspicious firms which the agency believes are the “backbone” of black money in the country.

By the last update, the ED teams had visited locations in cities like Kolkata, Mumbai, Ahmedabad, Panaji, Kochi, Bengaluru, Hyderabad, Delhi, Lucknow, Patna, Jaipur, Chandigarh, Jalandhar, Srinagar, Indore and some in Haryana.

In one instance, the agency found Rs 20 crore deposited in a bank account of a dubious operator which will be “considered for attachment”.

The agency said it searched a Mumbai-based operator who ran 700 shell companies with 20 dummy directors and had “converted Rs 46.7 crore for Chaggan Bhujbal”, the jailed ex-Maharashtra Deputy Chief Minister.

The central probe agency, which has a total strength of about 800 officers and staff at its various regional and zonal offices in the country, was virtually out on the field to undertake one of the biggest operations in the country against shell firms. The drive was part of a recent PMO directive to check the illegal operations of these companies.

“The operations are based on various investigations done by the agency and some others as part of their anti-black money crackdown charter,” ED Director Karnal Singh told PTI.

The ED teams also visited those who are allegedly connected to some of the most prominent corruption and black money cases being probed in the country at present.

The agency said it recovered documents and raided those dubious firms which were “used in the National Rural Health Mission (NRHM) scam to launder proceeds of crime”.

It said the action was carried out against the operators allegedly used by ex-Noida Chief Engineer Yadav Singh “to convert his illegal wealth”.

The agency also searched those companies allegedly related to Y S Jagan Mohan Reddy, Rajeshwar Exports and others to unearth their modus operandi.

Reddy is facing separate CBI and ED probes in cases of alleged disproportionate assets, corruption and money laundering.

The agency, in a statement, said it had come across various companies which were used with the objective to “conceal the nature, origin, or destination of misappropriated funds by concealing the beneficiary owner or proceed of crime generated out of corruption, fraud and other such crimes”.

“Cases of foreign outward remittances of dubious nature by certain companies had also been detected. Investigations had revealed that certain entry operators and fraudsters were using network of companies some of which have been used repeatedly while some other were discarded after use or kept dormant for a long period,” it said. MORE

This is published unedited from the PTI feed.