Govt to take ‘harsh punitive’ action against shell companies
| Saturday | 11th February, 2017
New Delhi: In a major crackdown on domestic shell companies, the government today decided to take “harsh punitive” action, including freezing of their bank accounts used to launder money or evade taxes.
“Harsh punitive actions will be taken against the deviant shell companies which will include freezing of bank accounts, striking off the names of dormant companies, invocation of Benami Transactions (Prohibition) Amendment Act, 2016,” it said.
Following a review by the Prime Minister’s Office, a task force with members from regulatory ministries and enforcement agencies has been constituted to monitor action against “deviant” shell companies.
While the Serious Fraud Investigation Office (SFIO) has filed cases against 49 shell companies, as much as Rs 3,900 crore have been laundered by 559 persons with the help of 54 professionals.
Shell companies are characterised by nominal paid-up capital, high reserves and surplus on account of receipt of high share premium, investment in unlisted companies, no dividend income and high cash in hand.