Crackdown on shell firms: ED raids at 100 places including Bhubaneswar
New Delhi/Bhubaneswar: The Enforcement Directorate (ED) today launched a country-wide operation and conducted searches at 100 locations in sixteen states including Odisha as part of its crackdown on shell companies.
Multiple teams of the ED visited raided the premises of about 300 shell firms in places like Delhi, Chennai, Kolkata, Bhubaneswar, Chandigarh, Patna, Ranchi, Ahmedabad and Bengaluru among others.
Official sources said the raids are 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.
Notably, a Special Task Force (STF) was recently created in the ED following directives were issued by the Prime Minister’s Office (PMO).
Shell companies are defined as those firms which are set up by nominal paid-up capital, high reserves and surplus on account of receipt of high share premium, investment in unlisted companies, no dividend income, high cash in hand, private companies as majority shareholders, low turnover and operating income, nominal expenses, nominal statutory payments and stock in trade and minimum fixed asset.
(With PTI inputs)