16 states, 100 locations: ED launches massive drive against shell companies to check money laundering

The Enforcement Directorate (ED) launched early on Saturday a massive countrywide operation to check money laundering and raided at least 100 locations across sixteen states as part of a crackdown on shell companies.

Officials said multiple teams of the ED raided the premises of about 300 shell firms in Delhi, Chennai, Kolkata, Chandigarh, Patna, Ranchi, Ahmedabad, Bhubaneswar and Bengaluru, among others.

The agency told HT that among the firms raided were companies with alleged links to senior NCP leader Chhagan Bhujbal, YSR Congress leader Jagan Reddy and tainted Noida bureaucrat Yadav Singh.

Some of the searches were also in connection with the National Rural Health Mission scam in Uttar Pradesh, sources added.

Officials said the raids were carried out under the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange



Management Act (FEMA) to check instances of money laundering and illegal foreign exchange transactions.

Senior ED officials told Hindustan Times that while no one was arrested, questioning of the suspects was underway.

The action is part of the mandate given to the ED under a Special Task Force (STF) that was recently created by the government on the directions of the Prime Ministers Office (PMO).

Shell companies, many of which act as fronts for a slew of illegal transactions and crime, act as the backbone of India's huge shadow economy. After the government pulled out 86% of India's cash in circulation last November to stamp out corruption and illegal transactions, many of these firms helped tax evaders convert slush funds into legal money, experts say. The ED has recently attached illegal assets worth crores over a week's time.