Government Agencies Identified 17000 Shell Companies post demonetization; according to two sources, The Income Tax Department, Enforcement Directorate, the Central Bureau of Investigation and the Serious Fraud of Investigation Office had sent their individual lists to the Financial Intelligence Unit (FIU) which had compiled them.
A senior official of Enforcement Directorate told that they had shared the list of companies which had indulged in tax evasion and money laundering. The agencies have started taking action, the source added. There has been mutual sharing of information happening between the investigative agencies.
What are shell companies?
Theoretically, shell companies are companies without active business operations or significant assets. They can be set up by business people for both legitimate and illegitimate purposes.
Illegitimate purposes for registering a shell company include hiding particulars of ownership from the law enforcement, laundering unaccounted money and avoiding tax.
With the shell company as a front, all transactions are shown on paper as legitimate business transactions, thereby turning black money into white. In this process, the business person also avoids paying tax on the laundered money.
LIST OF 17000 SHELL COMPANIES