What are the essential steps taken by government in tackling the shell Companies? (250 words)
Brief highlights of actions taken against shell companies in recent past include the following:
(i) With a view to have consolidated relevant information at one place and based upon inputs from all law enforcement agencies, the Serious Fraud Investigation Office under the Ministry of Corporate Affairs has undertaken the exercise of preparing comprehensive digital database of shell companies and their associates that were identified by various law enforcement agencies.
(ii) During last three financial years (2013-14 to 2015-16), investigations by the Income-tax Department have led to detection of more than 1155 shell companies/entities which were used as conduits by over 22,000 beneficiaries. The amount involved in non-genuine transactions of such beneficiaries was more than Rs 13,300 crore.
(iii) Enforcement Directorate conducted nationwide searched in 16 states on 01.04.2017 in respect of shell companies and related professionals who were behind the creation and operation of these Companies.
(iv) The CBI has registered 30 cases against 201 shell companies during the last 3 years viz. 2014, 2015, 2016 and the current year as on 28.2.2017.
(v) FIU-India Out of these, charge-sheets have been filed in 17 cases.
(vi) Ministry of Corporate Affairs has removed 1,62,618 Companies from the Register of Companies by following the due process under the Companies Act, 2013.
(vii) FIU-India has also alerted its Reporting Entities on shell companies for enhanced due diligence.
Mechanism for sharing of information between various law enforcement agencies is already in place under the Regional Economic Intelligence Council (REIC) and Central Economic Intelligence Bureau (CEIB) forums.
The Government had requested the Reserve Bank of India (RBI) for freezing of accounts of the defaulting companies who have long exceeded the stipulated time limit, for filing of Financials Statements and returns, under the Companies Act.