NEW DELHI: After a crackdown against more than 2.5 lakh defaulting companies since demonetisation, the Serious Fraud Investigation Office (SFIO) has begun probe into the role of directors, who were on the board of multiple mailbox entities that were allegedly used to wire illegal fund transfers.
SFIO, which functions under the Ministry of Corporate Affairs, is mandated to detect and prosecute white-collar crimes.
Sources said the SFIO sweep is part of coordinated multi-agency operation against dubious individuals and companies post demonetisation, which were dormant but suddenly became active on November 8, 2016.
The ministry had earlier revealed that in one case, a company which had a negative opening on the day note ban was announced, deposited and withdrew more than `2,400 crore post-demonetisation.
“Till December last year,more than 3.10 lakh directors were disqualified for theirassociation with the defaulting companies. But the government had made it clear that genuine companies which had failed
to file the mandatory financial documents would be given reprieve and such directors would be allowed temporarily to file the necessary documents, which would be further reviewed,” said a source.
But, there are more than 1,500 directors, who, the probe revealed, were on the board of suspicious shell companies, which had come under the scanner of investigating agencies for acting as conduit for black money hoarders. Officials privy to the investigation said they could be dummy directors used by the companies which have little sales and business activities, except moving illegal money, round tripping and receiving funds from tax havens.
“In majority of the cases,one director was found to be on the board of about a dozen companies, which itself is violation of the existing laws.But what is intriguing is that all these companies were registered at the same one-room address with absolutely no regulatory oversight. We realised that besides lax regulations, there was also lack of due diligence on the part of authorities to mount a crackdown against shell companies that was getting institutionalised,” the official said.The Ministry of Corporate Affairs had earlier asked SFIO to probe 57 suspected shell companies on the basis of reports by regional directors of the office of Registrar of Companies.
Acting as conduits
Probe reveals more than 1,500 directors were on boards of suspicious shell companies, which had come under the scanner for acting as conduits for black money hoarders