Monday, Feb 26, 2018 | Last Update : 05:03 AM IST
Diamond export firm converted demonetised currency worth Rs 600 cr into dollars.
Mumbai: The Enforcement Directorate (ED) on Monday night conducted searches at six shell companies located at five places in the city including three locations in South Mumbai.
The ED has registered a complaint against a businessman after it learnt that the accused founded shell companies and created accounts in a private bank in the city which were then used to convert demonetised currency notes into foreign currency. This foreign currency was deposited in various accounts located abroad. Speaking to The Asian Age, an ED official revealed that they had received intelligence that an export company that dealt in diamonds was under the pretext of importing diamonds via the import remittance method, depositing hundreds or crores in bank accounts. “We started investigating this and found that nearly Rs 700 crore had been converted to dollars and diverted to Hongkong and Dubai,” said an ED official.
Investigations led the ED to six shell companies created by the exports company, which were searched late on Monday night. “We got details about six shell companies in five locations of the city – Parel, Navi Mumbai and three in South Mumbai. Our teams conducted searches and collected incriminating documents,” said the source.
Explaining the modus operandi, the source said, “The businessman who owned the exports company would create six to seven shell companies in one go which would be active for six months. These companies would create bank accounts and use the valid bank accounts to transfer hundreds of crores. This money would be converted to foreign exchange and deposited in offshore locations. Once this was done, they would dissolve the shell companies, create new ones and repeat the same procedure.”
He revealed that the exports company had been indulging in the same since more than a year. “Nearly Rs 600 crore had been converted and diverted to offshore locations via this method till November. After demonetisations, Rs 100 crores were converted and diverted,” he said.
“We found documents reflecting details of more bogus companies. These documents were all legal and valid and had even the KYC verification approved. If we hadn't conducted the searches, these new shell companies would have been floated in the coming year.” The ED is now looking for the dummy directors of the shell companies and also trying to ascertain the bank’s role in the modus operandi.