Corporates illegally routing money abroad, says CBI

Ranjit Sinha seeks information on probes from Finance Ministry

Corporates illegally routing money abroad, says CBI

The Central Bureau of Investigation (CBI) Director Ranjit Sinha has approached the Finance Ministry seeking details of cases probed by the Directorate of Revenue Intelligence (DRI) involving corporates that are over-billing their imports resulting in losses to banks.

Sinha has said that over invoicing by a front company of a business group based abroad is being misused by corporate groups to illegally route funds from abroad. He has not named any corporate in his letter.

In separate letters to Secretaries of Banking and Revenue Department in the Finance Ministry, sources said, Sinha highlighted the modus operandi adopted by the corporates. A deal for imports is struck with a company in one country by the Indian corporate while the billing is done at inflated prices in the other country by the front company, sources said.

The sources said in such a scenario, the corporates use the inflated bills to take loan from banks. However, the corporate will have to pay less to the seller and the remaining amount is pocketed by the corporate group.

Sinha is also learnt to have accused Indian companies of indulging in third party transfers in which their front companies are located in tax haven countries in violation of the Reserve Bank of India guidelines.

The CBI chief pointed out that such cases are being probed by the Directorate of Revenue Intelligence and requested the ministry to provide information available with DRI and Customs.

The CBI recently filed a preliminary enquiry on the basis of a reference from Directorate of Revenue Intelligence alleging that a company purchased power sector equipment from South Korea and China as power sector imports attract very less duty.

As public sector banks were duped by over invoicing, the case was referred by the Directorate of Revenue Intelligence on the basis of which a preliminary enquiry was registered by the agency last month.

This is the second time in a month that Sinha is writing a letter to the Finance Ministry.

Earlier, he had written to Finance Minister Arun Jaitley about “unfair practices” being adopted in selecting chairmen and managing directors. Recently, CBI arrested Syndicate Bank CMD S K Jain in connection with a Rs 50-lakh bribery scandal.

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