In a major breakthrough, tax authorities have uncovered details of several shell companies routing massive sums of money through a web of bank accounts during the demonetization period.
Nearly Rs 4,600 crore has been detected so far, and this, officials believe, is only the tip of the iceberg. They have collected information on only 5,820 of over 2 lakh companies whose names were struck off by the ministry of corporate affairs last month, and their directors and bank accounts put under the scanner. The 5,820 companies had 13,140 accounts in nine banks.
Sources told that these companies had deposits worth Rs 4,574 crore on November 8 last year, the day demonetisation was announced, in the accounts investigated. Nearly 99% (Rs 4,552 crore) was withdrawn by the time their names were struck off.
Initial information available with IDBI Bank showed 3,300 firms whose names were struck off had 3,634 accounts with this bank alone that saw deposits of Rs 3,792 crore and withdrawals of Rs 3,794 crore.
The discovery is expected to strengthen the government’s argument that the tax department’s post-demonetisation operations will actually help unearth black money, and blunt criticism that the exercise was a failure. Tax authorities are of the view that the RBI and the Registrar of Companies need to conduct a detailed probe into these companies.
The tax department has identified at least nine firms that had over 100 accounts each. Gold Sukh Trade India, with 2,134, and Aswin Vanaspathi India, with 915, top the list, followed by Anujay Exim (313) and Radha Krishna Payal Bhandar (298).
According to data provided by the Bank of Baroda, some of the companies had negligible balance when demonetisation was announced but saw large deposits over the next few weeks.
Radha Krishna Payal Bhandar had Rs 1.9 crore across its bank accounts on the eve of demonetisation. But over the next few weeks, Rs 12.6 crore was deposited, and Rs 12.53 crore withdrawn. At Canara Bank, Subhash Pipes deposited Rs 13.91 crore and withdrew the entire amount.
Similarly, Technext Vyapaar deposited and withdrew Rs 9.9 crore. The bank told tax authorities there were 429 firms with zero balance on November 8 that subsequently saw deposits of over Rs 11 crore and withdrawals of a similar amount, leaving a cumulative balance of Rs 42,000.