Unprecedented black money crackdown launched by Narendra Modi government – The Financial Express–07.09.2017

Deregistering over 2 lakh companies—and, in the process, freezing their accounts—for failing to  comply with statutory obligations to present information relating to their finances and stakeholders will go a long way in curbing black wealth. The government had earlier said that just 6 lakh out of 16 lakh registered companies in the country were fulfilling regulatory requirement—and that the operations and functioning of the remaining 10 lakh were to come under scrutiny to determine any illegality. The present action of the government ties in well with the other measures, including demonetisation and the GST reform, that are expected to have a chilling effect on black wealth generation. The prime minister claimed, in his speech at the Foundation Day celebrations of the Institute of Chartered Accountants of India, that demonetisation data pointed at nearly 3 lakh registered firms being involved in shady dealings, and 37,000 shell companies had been identified. Earlier last month, SEBI had suspended the trading of stocks of 331 suspected shell companies.

Stringent action against shell companies will help curb money-laundering and tax evasion. The Supreme Court-appointed Special Investigation Team on black money found that the bulk of shell companies were registered at Kolkata addresses. With Serious Fraud Investigation Office and the income tax department continuing the crackdown on shell companies, it is expected that even more firms from the 10 lakh pool the government has talked about will be brought to book. Factor in the task force on shell companies set up by the government, headed jointly by the revenue secretary and the corporate affairs secretary, and the crackdown on this route of money laundering and illegal wealth generation now looks


via Unprecedented black money crackdown launched by Narendra Modi government – The Financial Express

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