De-registered frim faces Money Laundering probe

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  • Three lakh more suspected shell companies to get show-cause notice Allegedly, 300,000 companies have been identified by the government as indulging in unlawful transactions since demonetization Out of these 300, 000 companies, 100,000 have been de-registered.
  • And another 37,000 shell companies has been identified that has been involved converting black money in to white, these steps are part of the Government’s action to ensure regular flow of data from the Swiss national bank to keep check fraudulent transactions.
  • The attempt is to restrict Chartered Accountants to come up with ways of helping their clients but to be diligent in their accounting.

Inquiry to be done:-

If companies de-registered have been found to be involved in money laundering, they would be brought under the probe radar of the Enforcement Directorate (ED)
Concurrently, the Ministry of Corporate Affairs (MCA) decided to send show-cause notice to over three lakh more firms for striking off their names from the ‘register of companies’
The MCA has acted against the companies for not filling returns.
It will further approach banks with the list of companies where action has been taken to ensure that they are unable to operate their bank accounts or access loans.
Also the ministry is writing to the Financial Intelligence Unit (FIU) to scan for any violation of provisions of the Prevention of Money Laundering Act.

RoC’s Notice can be Challenged:-

Section 252 of the Companies Act points out that persons aggrieved by the RoC order — notifying a company as dissolved under Section 248 of the Act — may file an appeal to the National Company Law Tribunal (NCLT) within three years from the RoC’s order.
If the NCLT finds that the removal of the company’s name was unjustified, it may order its restoration in the register.

The Directorate of Enforcement:-

It is a law enforcement agency and economic intelligence agency responsible for enforcing economic laws and fighting economic crime in India.
It is part of the Department of Revenue, Ministry of Finance. It comprises officers of the Indian Revenue Service, Indian Police Service and the Indian Administrative Service.
The origin of this Directorate goes back to 1 May 1956, when an ‘Enforcement Unit’ was formed, in Department of Economic Affairs, for handling Exchange Control Laws violations under Foreign Exchange Regulation Act, 1947. In the year 1957, this Unit was renamed as ‘Enforcement Directorate.

Objectives:-

Enforcement of,

  • The Foreign Exchange Management Act 1999 (FEMA).
  • The Prevention of Money Laundering Act 2002 (PMLA)