SUMMARY
The ministry seeks to find out if Chinese directors and key executives are appointed to the boards of multiple companies
The ministry will track the shell companies operating in India and deregister them
MCA will also find and deregister shell companies illegally operating here and lending money via Chinese loan apps
The Ministry of Corporate Affairs (MCA) is closely scrutinising directors and other key executives of Chinese companies, which are incorporated in India, to ascertain if they are genuine enterprises and not shell companies.
According to the Economic Times report, through this investigation, the ministry seeks to find out if the said directors and key executives are appointed to the board of other companies, which will help identify other shell companies operating in the country.
“There have been instances of individuals being on boards of multiple companies,” a senior government official told the cited media company.
The government official further informed that the probe aims to look into the authenticity of directors and multiple companies that they are heading in India.
Thereafter, the ministry will find out shell companies that are operating in the country and will deregister them from operating further.
Besides, the ministry is also ascertaining and deregistering shell companies that are illicitly operating and lending money via Chinese loan apps. At present, the Centre is probing such lending entities and individuals that are facilitating them.
The cited official said that under the probe, the Indian authorities are verifying the details of Chinese officials that are holding key positions in Indian business units of Chinese companies. The authorities are seeing if these officials are appointed directors in more than one company. This is helping them differentiate genuine companies from shell companies.
Earlier this year, the Ministry of Home Affairs (MHA) reported that 348 Chinese mobile apps were illicitly garnering and transmitting information from India to China.
Add to that, this month, the anti-money laundering body Enforcement Directorate (ED) carried out search operations in Razorpay offices and other banks relating to Chinese loan apps. During the probe, the ED seized worth INR 78 Cr funds from Chinese lending entities parking down with Razorpay’s payment gateway and other bank accounts.
This month, the Hyderabad police cracked a money laundering case worth INR 903 Cr involving a sham Chinese investment app.
Besides, the Centre is also closely scrutnising various Chinese smartphone makers and OEMs such as Huawei, Vivo, Xiaomi and Oppo among others relating to tax evasion and anti-money laundering cases.
