Raid unearths 114 shell companies operating from a single room

Authorities cracking down on shell companies to curb illegal untaxable funds flowing through the country

Hyderabad: In large-scale crackdown on shell companies, a team from the Ministry of Corporate Affairs discovered that 114 companies were operating from a single room in a mall in Hyderabad, causing huge financial losses to the exchequer by evading taxes.

Interestingly one of the companies was linked to the infamous Satyam Group of B Ramalinga Raju which had collapsed about a decade ago due to serious financial bungling.

The raid was carried out on the Monarch Mall in the Jubilee Hills area by the Serious Fraud Investigation office after the Ministry of Corporate Affairs stumbled upon suspicious transactions in the balance sheets of the companies. Most of the companies showed losses of more than Rs150 million.

According to the sources the companies had directors who were paying salaries and preparing detailed balance sheets to show losses without any active business operations. Directors of many of the companies were related to each other and lending money to each other. Some of them were managing up to 30 companies in violation of the law.

Documents seized during the raid revealed that a firm by the name SRSR Advisory Service was the accountant for all shell companies registered in the mall. One of the shell companies was identified as Hill Country, formerly named Maytas, promoted by the son of Satyam Computers founder B Ramalinga Raju.

Raju and many of his clan members were the directors of several of the shell companies, officials said. Raju was convicted and imprisoned in the Satyam Computers scandal.

Sources confirmed that multiple raids were being carried out in different parts of the country to unearth shell companies involved in circulating money and illicit funds.


Share This Post