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ED Launches Massive Drive Against Shell Companies For Laundering Money

New Delhi, April 1, 2017 - The companies are under the scanner for laundering money and for helping politicians convert black money into white. EC (Enforcement Directorate) has launched one of its biggest crackdowns on shell companies across the country. The department is carrying out searches across 100+ locations in India.

So far, the agency has managed to uncover around 2300 shell companies. In Mumbai and Delhi alone the ED has discovered over 1000 such companies. Most of these companies were formed during the period when exchange of the old Rs 500 and Rs 1000 was allowed after the November 8 demonetization announced by Prime Minister Narendra Modi.

These companies are alleged to have transferred money during the time when exchange of old Rs 500 and Rs 1000 was allowed. The companies are also suspected to be involved in money laundering.

The raids have been carried out at companies in Delhi, Mumbai, Chennai, Bengaluru, Bhuvaneshwar, Kolkata and other metro cities.

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.

The 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 demonetization.

POLITICAL CONNECTIONS

ED officials are zeroing on a few individuals who allegedly helped politicians launder money.

One of the individuals who has been the target of a raid is Jagdish Purohit from Andheri (W) in Mumbai. He is suspected to have run 700 companies from a single address.

He is suspected of helping Nationalist Congress Party (NCP) politician and former Maharashtra minister Chhagan Bhujbal of converting Rs 46 crore of black money into white.

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