The ED today launched a country-wide operation and conducted searches at 100 locations across India as part of its crackdown on shell companies. Multiple teams raided the premises of about 300 shell firms in prominent places like Delhi, Chennai, Kolkata, Chandigarh, Ahmedabad and Bengaluru among others.
They said 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 instances of money laundering and illegal foreign exchange transactions.
This operation is said to be part of Prime Minister Narendra Modi’s directive to crack down on shell companies that were used by hoarders and even legitimate business houses to launder money during demonetisation.
ED officials are zeroing on a few individuals who allegedly helped politicians launder money.
The agency so far has managed to uncover around 2300 shell companies. In Mumbai and Delhi alone the ED has discovered over 1000 such companies. Most of these shell companies were formed during the period when exchange of the old Rs 500 and Rs 1000 was allowed after the November 8 demonetisation announced by Prime Minister Narendra Modi.These companies are also suspected to be involved in money laundering.
ED officers are going through records of operators who run allegedly shell companies and according to initial information, the over 300 companies are suspected to have converted several hundred crores of rupees of black money into white.