1. How Narendra Modi’s demonetisation move was played as big black money game by shell companies

How Narendra Modi’s demonetisation move was played as big black money game by shell companies

Demonetisation decision was taken by Narendra Modi government to fight against black money. But some dealing with black money found ways to play around the move.

By: | New Delhi | Updated: October 6, 2017 4:06 PM
black money, black money fight, narendra modi demonetisation, modi note ban, demonetisation modi, shell companies, big black money game Prime Minister Narendra Modi had announced demonetisation decision on November 8, 2016. (PTI)

Demonetisation decision was taken by Narendra Modi government to fight against black money. But some dealing with black money found ways to play around the move. The government today said that as many as 5,800 shell companies deposited around Rs 4574 crore in their near zero balance accounts after demonetisation and manged to withdraw around Rs 4553 crore later.

The government has been able to collate information about these companies but recovering this black money would be a herculean task. In a statement, the government said, “Vital information has been received from 13 banks regarding the bank account operations and post-demonetisation transactions of some of the 2,09,032 suspicious companies that had been struck off the Register of Companies earlier this year.”

The government has found the data on pre-demonetisation accounts and transactions conducted during the note ban period as “startling”. The statement said these shell companies had a balance only Rs 22.05 crore after separating the loan accounts, on November 8, 2016, the day when note ban was announced by PM Modi. “However, from November 9, 2016 (after the announcement of demonetisation), till the date of their being struck off, these companies have altogether deposited a huge amount of Rs 4,573.87 crore in their accounts and withdrawn an equally large amount of Rs 4,552 crore,” the statement said.

It has been revealed that these companies had multiple accounts with minuscule or negative balance as on November 8, 2016. The accounts saw deposits and withdrawal running into several crores after demonetisation. The shell companies, however, later left the accounts dormant with meagre balance.

“This exercise of swindling the authorities was carried out post demonetisation till the companies were struck off. In some cases, certain companies have gone more adventurous and made deposits and withdrawals even after being struck off,” said the statement.

For example, 429 companies having zero balance accounts in a bank deposited and withdrew over Rs 11 crore and left the accounts with a cumulative balance of just Rs 42,000.

Similarly, in another bank, over 3,000 shell companies have been located. Most of them had multiple accounts. According to the statement, these companies having a cumulative balance of just Rs 13 crore on November 8 last year deposited and withdrew around Rs 3800 crore. At the time of freezing of their accounts, the companies had only Rs 200 crore.

The statement said, “It needs to be re-emphasised that this data is only about 2.5 per cent of the total number of suspected companies that have been struck off by the government. The huge money game played by these companies may well be the tip of an iceberg of corruption, black money and black deeds of these and many more of their brethren.

Recently, the government imposed restrictions on operations of bank accounts of over 2 lakh ‘struck-off’ companies. (With PTI inputs)

  1. Lokesh Bardia
    Oct 6, 2017 at 8:25 pm
    209000 companies total drawing of 5000 cr means each company did a turnover of 250000 over period of four months. What is big deal in this. Sir when you report at least evaluate if this is worth covering in your esteemed paper.
    Reply
    1. C
      c l k
      Oct 6, 2017 at 6:50 pm
      Pls collect tax after recovery of black money and then inform the public that how much tax is recovered. only giving incomplete information is of no use and only a face saving tactic f government to justify its action which has proved to be disastrous
      Reply
      1. Mallikarjun J Iyyer
        Oct 6, 2017 at 4:52 pm
        this has been silver lining for the demon exercise. With available expertise and tech expertise, the govt. has been able to start drive against black money. But much more is to be achieved which we should be able to hear soon.
        Reply

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