After demonetization last year, everyone was wondering where all the black money disappeared. Now, it has become clear, as the government has noticed that large amounts of cash transactions were carried out during demonetization by shell companies. It took some time for the government to realize that the shell companies could be such an easy and effective way to hide black money. However, the government now knows the modus operandi of black money operators and it has formed a special team that would look into illegal transactions by shell companies. It may be recalled that the government has already initiated action against several shell companies. Last month, around 2 lakh shell companies were ordered to close operations.
Now, the government is looking to target more of such shell companies that are used solely for hiding assets and laundering black money. The Prime Minister’s Office (PMO) has formed a special team to target shell companies that may be involved in money laundering. The special team comprises senior officials from law enforcement and revenue department. The shell companies have no real business and they operate just to enable illegal assets purchases and money laundering activities. According to sources, the government is tracking hundreds of such shell companies and would be taking action against them soon.