In a country-wide crackdown on shell companies laundering black money, the Enforcement Directorate (ED) said it has arrested two market entry operators who are suspected to have laundered close to Rs 8,000 crore in the last three months alone.
The agency’s investigations, based on a case lodged by the Serious Frauds Investigation Office (SFIO), involve 90 shell companies with 559 beneficiaries and the movement of close to Rs 11,000 crore. The entry operators, Surendra Kumar Jain and Virendra Kumar Jain, were arrested by the agency on Monday and produced before a court on Tuesday, which granted custody to the agency for 10 days.
According to ED, the duo would allegedly accept black money from clients through mediators and convert them into share premium transactions through the shell companies for a commission. The Jains moved money through 26 shell companies, it alleged. “…during investigation in the matter of M/s NKS Holdings Pvt. Ltd. and other companies, controlled by Shri Surendra Kumar Jain & Shri Virendra Jain, it was revealed that during the short period of 3 months between the opening and closing of the accounts of these companies, there was credit and debit summations to the tune of Rs 8,000 crore approx,” an ED statement said.
A senior ED official said that the racket ran into about Rs 11,000 crore. “The information available with us through financial intelligence agencies involves 90 shell companies and 559 beneficiaries,” said the official. The ED registered a criminal case last month under the Prevention of Money Laundering Act (PMLA) based on a chargesheet filed by the SFIO against certain individuals and firms, the official said.
“With the help of mediators, they (Jains) laundered the unaccounted money through the process of placement of funds, layering of transactions and the final integration of laundering money into the banking channel camouflaged as legitimate share premium transactions,” said an ED officer. In the matter of Rs 8,000 crore moved through NKS holdings, an ED statement said, “This was achieved by way of circular flow of funds through rotational transactions in the accounts of NKS and other companies, which continued till the summations of debit and credit entries reached the total figure of around Rs 1,000 crore or more in each of the bank accounts of these companies so as to fictitiously size up its balance sheets.”
In connection with the case, the agency has already made attachments of investments worth over Rs 64 crore in Radisson Blu Hotel in Dwarka, it said. Here, the Jains and others allegedly laundered the unaccounted money of Ms Jagat Projects Private Limited amounting to Rs 64.70 crore, the ED said. This was invested in the Radisson Blu hotel, which was constructed by Ms Divine Infracon Private Limited, a sister concern of Ms Jagat Project Limited, ED said. In lieu of this, the Jain brothers allegedly received a commission of about Rs 1.12 crore, ED said.
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