Fighting Black Money: Government To Geo-Tag Offices Of Shell Companies To Track Offenders

In a bid to crack down on shell companies indulging in illegal transactions and circulation of black money, the government has planned to geo-tag all shell companies in the country, Livemint has reported.

Though all transactions of shell companies are not illegal, a substantial number of transactions done through shell companies generate black money. The special investigation team on black money headed by Justice MB Shah had highlighted the role of shell companies in money laundering.

“This (geo-tagging) will help us identify instances of one building being used by hundreds of shell companies as their registered office or of companies citing vacant plots as their registered office address. It will serve as an early warning system for detecting mushrooming of shell companies. We are seriously thinking of introducing this requirement,” Minister of State in Corporate Affairs Ministry told Livemint.

Coordinates of the company’s location, common contact numbers and common directors can be used to find different shell companies that are located in the same place. This can be done by using MCA21, the ministry’s IT tool.

After the demonetisation exercise, the government deregistered more than 2.26 lakh shell companies from the records for not filing annual returns for two or more years. Some of these cases have also led to probes. Rs 25 crore money deposited into the system through shell companies is under scrutiny.