Black money crackdown: Rs 17,000 cr deposited in banks by shell companies after demonetisation

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New Delhi | Published: November 5, 2017 5:13:21 PM

In its crackdown against black money and corruption, The government of India has struck off around 2.24 lakh companies till date for remaining inactive for two years or more.

Black money crackdown after demonetisation(Representational Image, Source: PTI)

In its crackdown against black money and corruption, The government of India has struck off around 2.24 lakh companies till date for remaining inactive for two years or more, according to a report by The Indian Express which quoted a press release by Union Ministry of Corporate Affairs on Sunday. The report said that some of these companies were suspected shell companies. The government had received information about 35,000 companies and 58,000 bank accounts from 56 banks after which it took the decision to struck them off.

According to the report, the preliminary inquiry initiated against these firms revealed that a sum of around Rs 17,000 crore was deposited and withdrawn after demonetisation of Rs 500 and Rs 1,000 notes last year in November. Out of these companies, one had 2,134 accounts and one firm, which had a negative opening balance, deposited and withdrew Rs 2,484 crore post demonetisation. After the government received the information, it decided to freeze the bank accounts of these firms and put restrictions on sale or transfer of movable or immovable assets of these companies till the time they are not restored by the government.

Apart from this, the state governments have also been advised to block the registration of such transactions. The move to strike off these firms was taken by a special task force formed by Prime Minister’s Office. This force oversees the drive against defaulting companies. It is working with other enforcement agencies and is jointly chaired by the Revenue Secretary and Secretary, Corporate Affairs.

Apart from this, the ministry has also disqualified 3.09 lakh directors on boards of companies that had failed to file financial statements and/or annual reports for three consecutive fiscals, as it is a mandatory requirement under the Companies Act, 2013. Failure to abide by the requirement draws legal action under penal provisions provided under the same Act. The ministry has given authority to the director, additional director or assistant director of SFIO to arrest any person who is believed to be guilty of fraud.

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