The Serious Fraud Investigation Office (SFIO) has arrested a person who, according to the Ministry of Corporate Affairs (MCA), became the mastermind of the racketeering of incorporating a large number of shell companies with links to China in India.
The September 10 arrest comes after Finance Minister Nirmala Sitharaman ordered the MCA to identify front companies that could be used to embezzle funds.
On September 8, the MCA conducted simultaneous search and seizure operations at the offices of Jillian Consultants India, a wholly owned subsidiary of Jillian Hong Kong, in Gurugram, Fininty in Bangalore and Husys Consulting, a former listed company in Hyderabad. . “Evidence obtained from the investigation by the Delhi Registrar of Companies and concurrent search operations clearly indicates that dummy directors are being paid by Jillian India to act as models in several front companies,” the MCA said in a statement. his statement.
Boxes filled with corporate seals and digital signatures of fake directors were recovered from the site, he added.
According to the statement, the arrested person, named Dortse, is on the board of directors of Jillian India. “He clearly emerged as the mastermind behind the whole racket of incorporating a large number of shell companies with Chinese ties in India and providing dummy directors on their boards,” he said.
Jillian’s Indian employees were in contact with their Chinese counterparts through a Chinese instant messaging application. He said Husys was also acting on behalf of Jillian India. “Investigations conducted so far have revealed the possible involvement of these shell companies in serious financial crimes detrimental to the financial security of the country,” the statement added.
The SFIO had been tasked with investigating Jillian and 32 other companies.
“Dortse and a Chinese national are the two directors of Jillian India. Based on the information and investigations conducted, it was established that Dortse had fled NCR from Delhi to a remote location in Bihar and was attempting to flee India by road,” MCA said.
A team from the SFIO arrested him and produced him before a court of law and placed him in pre-trial detention. The statement only mentioned Dortse as a registered resident of Mandi in Himachal Pradesh.
The finance minister chaired a meeting on Thursday to investigate illegal loan apps and shell companies that could be used to launder money. Illegal loan apps hosted on app stores have been found offering microloans to pandemic-affected people and low-income groups at exorbitant interest rates, along with hidden and processing fees, and resorting to predatory recovery practices.
It has been decided that the Reserve Bank of India will soon prepare a ‘white list’ of all legal apps (apps) that offer loans, and the Ministry of Electronics and Information Technology will ensure that only those apps are hosted on app stores.
Sitharaman noted the possibility of money laundering, tax evasion, data breaches and misuse of unregulated payment aggregators, front companies and former NBFCs for carrying out such actions, said the Ministry of Finance.
Under the proposed set of measures, the MCA will identify front companies that can be used to misappropriate funds and delist them to prevent their misuse. All government departments and agencies have been instructed to take appropriate action, within their domain, to prevent the operation of illegal loan applications.