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ED raids shell companies, some linked to politicos

Searches spread over 100 locations in 16 states

The searches were carried out under the Prevention of Money Laundering Act, the Foreign Exchange Management Act and other provisions to check money laundering and illegal foreign exchange transactions.

The searches were carried out under the Prevention of Money Laundering Act, the Foreign Exchange Management Act and other provisions to check money laundering and illegal foreign exchange transactions.

The Enforcement Directorate on Saturday carried out searches at about 100 locations in 16 states as part of its crackdown on shell companies used for laundering money.

This comes weeks after a directive from the Prime Minister’s Office (PMO) to check the operations of these illegal companies.

The searches were also conducted at shell companies related to YSR Congress leader Y S Jaganmohan Reddy, Chhagan Bhujbal of the Nationalist Congress Party and former Noida chief engineer Yadav Singh.

The agency said its searches exposed a Mumbai operator running 700 shell companies with 20 dummy directors that “converted Rs 46.7 crore for Chhagan Bhujbal”. It also raided dubious firms, which were reportedly used in the National Rural Health Mission scam to launder proceeds of crime.

The searches yielded several incriminating documents.The move was initially aimed at 300 shell companies, but Saturday’s drive has exposed at least 1,000 such firms, with some reports pegging the number at 2,300. These companies are said to be the “backbone” of black money in the country.

“The operations are based on various investigations done by the agency and some others as part of their anti-black money crackdown charter,” ED director Karnal Singh said.

Sources said the searches were conducted in Bengaluru, Delhi, Mumbai, Chennai, Kolkata, Chandigarh, Patna, Ranchi, Ahmedabad and Bhubaneswar. There were raids in Panaji, Kochi, Hyderabad, Lucknow, Jaipur, Chandigarh, Jalandhar, Srinagar, Indore and some places in Haryana, too.

The searches were carried out under the Prevention of Money Laundering Act, the Foreign Exchange Management Act and other provisions to check money laundering and illegal foreign exchange transactions.

The ED action is part of the mandate given to the agency. Recently, a special task force was formed by the government on the directions of the PMO to take on shell companies that do not conduct any operations, but indulge in generating black money.

The PMO direction came after it emerged that Rs 1,238 crore was deposited in these entities during the November-December period after Prime Minister Narendra Modi announced demonetisation. Besides, 559 beneficiaries were found to have laundered money to the extent of Rs 3,900 crore.

Six bogus firms in city

The Enforcement Directorate on Saturday raided six bogus companies in Bengaluru, which cheated banks and investors of crores of rupees, reports DHNS from Bengaluru.

The sleuths raided seven premises of six companies — two branches of Ripple Investment Limited in Vasanth Nagar and Banashankari, GDR Media Limited, Libra Interactive Learning, Blue Dream Infotech, AGS Infotech, and NEC Soft Limited. Dhananjay Reddy, proprietor of Ripple Investment, had floated over 20 bogus firms, ED sources said.

The modus operandi was to float new companies and raise loans from banks and investors. After securing the money, Reddy used to transfer it to his other bogus
companies.

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