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In Massive ED Crackdown, 700 Shell Firms Found at One Mumbai Address

The Enforcement Directorate on Saturday launched a nationwide crackdown against shell companies and conducted searches at 100 locations across 16 states to check the circulation of black money.

Ashish Mehrishi | CNN-News18

Updated:April 1, 2017, 2:01 PM IST
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New Delhi: The Enforcement Directorate on Saturday launched a nationwide crackdown against shell companies and conducted searches at 100 locations across 16 states to check the circulation of black money.

Multiple teams, comprising 300 officers, visited these locations and raided the premises of firms in prominent places like Delhi, Chennai, Kolkata, Chandigarh, Patna, Ranchi, Ahmedabad, Bhubaneswar and Bengaluru among others.

The agency reportedly found more than 700 shell companies at one address in Mumbai.

It has also reportedly looked into shell companies allegedly linked to YSR Congress chief Jagan Mohan Reddy and former chief engineer of Noida, Yadav Singh.

The action is being carried out under the provisions of the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA) to check money laundering and illegal foreign exchange transactions.

The action is part of the mandate given to the ED under a Special Task Force (STF) that was recently created by the government on the directions of the Prime Minister’s Office (PMO).

The agency had recently attached assets worth crores of such firms.

Shell companies are defined as those firms which are set up by nominal paid-up capital, high reserves and surplus on account of receipt of high share premium, investment in unlisted companies, no dividend income, high cash in hand, private companies as majority shareholders, low turnover and operating income, nominal expenses, nominal statutory payments and stock in trade and minimum fixed asset.

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