A complex web of 393 shell companies used for allegedly diverting funds unscrupulously to the tune of Rs 2900 crore has been unearthed by the CBI during its probe into such cases over the last three years.
CBI sources said the shell companies were allegedly being used by the accused to divert loan funds meant for specified purposes, creating fake invoices, and “round-tripping” of funds to evade taxes and generate black money.
Round-tripping is sending money abroad to tax havens in the guise of payments for fake imports through shell companies and bringing back that money showing it as foreign investment.
The findings of the CBI are just a tip of the iceberg as these are only those cases where the agency has been able to find legally-tenable evidence of money trail, cheating and diversion of funds to cheat the banks, said the sources not willing to the named.
The murky activities have been exposed during the CBI probe into various loan fraud cases involving 28 public sector banks and one private bank, the sources said.
Besides this, the agency is probing about 200 cases involving funds of at least Rs 30,000 crore, the sources said.
The CBI is prosecuting these companies for corruption and scheduled offences associated with it.
In addition, it will also refer these cases to other investigating agencies for action under other laws like Companies Act, Prevention of Money Laundering Act, Benami Transactions (Prohibition) Act and the Income Tax Act etc, the sources added.
The agency has not only “exposed” these shell companies but also gathered enough material which would “plug” the possibility of them being used for any further operation, the sources claimed.
The sources said it is likely that these shell companies have been used to abet financial crimes by other offenders too which will be probed by other agencies.
The companies are spread across the country as also the ‘tax-haven’ countries facilitating transfer of black money which makes the investigation even more difficult, they said.
Some important cases which have been probed by the CBI include the one against Century Communication Group which used to run Mahua Channel. According to the figures mentioned in the agency’s charge sheets and FIRs, the group allegedly committed fraud to the tune of Rs 3000 crore.
It used over 98 shell companies to allegedly divert bank loans for setting up digital studios in Noida, Mumbai, Kolkata and other locations, the CBI has said.
These companies were allegedly used to divert funds showing fake equity infusion to the tune of Rs 802 crore.
The Kolkata-based shell companies named in the case were allegedly controlled by one Muralidhar Lahoti. Three chartered accountants have also been charge sheeted.
Zoom Developers faces 14 cases for allegedly swindling bank funds worth Rs 2600 crore involving a consortium of 26 banks. It allegedly collateralised foreign bank guarantees issued by Indian banks in favour of foreign aggregators.
The CBI had registered two cases against Jignesh Shah and Anjani Sinha of National Stock Exchange Limited, also known as “NSEL scam”, in which funds of Rs 342 crore were allegedly swindled.
Nine shell companies surfaced during the probe which were trading on the exchange platform allegedly without having actual possession of the commodities, they said.
The company is accused of increasing its paid-up capital to Rs 500 crore by round-tripping and routing bank funds to the extent of Rs 460 crore through six shell companies.
In a recent case, the agency has found that a dental college existed only on paper while a bank was told that the construction was completed and loan funds were diverted for purposes other than for which these were issued.
In many cases, the CBI found that companies have peons, drivers, sanitation workers, personal staff, cooks etc as the directors of the shell companies created by the masterminds who divert funds using them, the sources said.
Recently, the government expressed concern over the working of shell companies in the country.
Revenue Secretary Hasmukh Adhia had said that out of 15 lakh companies registered in India, nine lakh are not filing any returns and some among them may be acting as shell companies.