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The Economic Offences Wing (EOW) of Mumbai Police has received Look Out Circulars (LOCs) against 56 Chinese nationals for fraudulently becoming directors of Indian companies, some of which turned out to be shell companies.
Since April this year, at least 39 cheating and forgery cases have been registered. The FIRs are registered based on the complaints lodged by the Registrar of Companies, Mumbai. According to the EOW probe, dozens of Chartered Accountants (CAs) and Company Secretaries (CSs) have been named who allegedly have helped the accused foreigners.
Allegations on which the EOW is probing currently – Accused CAs and CSs helped them in getting suspected shell companies registered in the names of Indian citizens, inducting the foreigners as directors of the companies, and transferring the entities to them for hefty charges.
EOW officials further stated that they are probing the angle if the accused Chinese nationals have opened companies with an intention of aiding and abetting the commission of any larger financial crimes in India or not.
Talking about the case, officials say the accused used the names of their friends and relatives as promoters. They submitted false information and documents to the registrar’s office. On physical verification, all the documents that they had submitted turned out to be fake. And this is where the EOW probe started. No arrest has been made so far.
All accused have been booked under relevant sections of criminal breach of trust, cheating, falsification of accounts, criminal conspiracy, and under relevant sections of Company Act.
Officials say nothing conclusive has come so far in the investigation as questioning is going on currently. “All the CAs and CSs are being questioned currently and their statements are getting recorded. First, for us, the main reason is to find out why the accused Chinese nationals have set up shell companies in India.”
Central agencies like CBI and IB officials are also monitoring the case to check the progress.
This is part of a nationwide crackdown on shell companies with dummy Indian directors with Chinese connections. In April this year, the EOW of the Mumbai Police had registered 34 FIRs against 150 people, including 60 foreigners- 40 of them from China- for allegedly violating laws regarding the registration of new companies and for fraudulently becoming directors of Indian companies.(WION)
