Investigation: Over 800 'firms' located at two vacant Delhi addresses
The menace of shell companies is an undeniable reality in India. Last month, PM Narendra Modi announced over 37,000 such firms have already been detected, and registrations of one lakh others have been cancelled. But there's still a long way to go. A DNA investigation has now revealed that there are over 800 companies registered at two locations in Delhi. Both are vacant.
The investigation revealed that 468 companies were registered at the dilapidated Naaz Cinema complex in 1-E Jhandewalan Extension as of 2015. Meanwhile, a single room at 62/63 M-Block, Connaught Place, was the official address for 405 companies as on March'15. Around 50% of these firms are associated with two big firms engaged in real estate, finance and power. They are now under I-T scanner.
By law, if land parcel is transferred to another company/person, stamp duty has to be paid. But creating shell companies helped the firms avoid paying this duty, said a source at one of the firms. They transferred ownership instead of land.
November'16 seems to have been a turning point. At Jhandewalan, out of 468, only 245 remained in December. Interestingly, 111 of them shared a single email address. At CP, from 405, it came down to 191. Most have similar email IDs, and the 'directors' were found to be related. In fact, as of 2015, 1,718 companies had registered addresses as vague as 'Delhi, India'.
Such cases aren't limited to Delhi. The government earlier said it would freeze all bank accounts used to launder money. It said it is planning to close 6-7 lakh firms, many of which had deposited large amounts in banks post demonetization. As of April, over one-third of the 11 lakh active Indian shell companies faced deregistration as they hadn't filed returns since three years.