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Last Updated : Aug 22, 2017 11:40 AM IST | Source: Moneycontrol.com

Brokerages under IT & Sebi's lens for helping 'shell' companies launder black money

Brokerages are under scanner of the Securities and Exchange Board of India (SEBI) and Income Tax Department for helping shell companies to launder money by compromising the KYC norms.


Brokerages are under scanner of the Securities and Exchange Board of India (SEBI) and Income Tax Department for helping shell companies to launder money by compromising the KYC (know your customer) norms, reports Livemint.

The report said that shell companies have laundered Rs 16,000 crore in connivance with brokerage firms.

Earlier this month, the Ministry of Corporate Affairs had identified 331 companies as shell entities. It had arrived at this number from a larger figure of 16,794 shell companies list prepared by the government with input from all investigative agencies.

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More than 13,000 shell companies were identified by the investigative agencies post demonetisation for helping wealthy clients evade taxes through fake long term capital gains. Around 400 stock and commodity broking firms had allegedly played a role in helping shell companies.

The SEBI board will meet on September 18 to discuss developments related to alleged shell companies listed on stock exchanges.

Finance Minister Arun Jaitley on July 21 said that 162,000 shell firms have been deregistered in its campaign against black money. These firms do not have any genuine trade and are used for the purpose of tax evasion and money laundering.

In March CBDT Chairman Sushil Chandra said that several companies were being probed to check if they are legitimate entities or were operated as shell companies at an event organised by Gujarat Chamber of Commerce and Industry (GCCI).

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First Published on Aug 22, 2017 11:40 am
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