The Income Tax department on Tuesday said searches at premises of certain Chinese entities in India have revealed a money laundering racket involving shell companies.
The search has led to detection of more than 40 bank accounts which were created in various dummy entities at the behest of certain Chinese individuals. Over a period, these accounts were used for transactions worth more than ₹1,000 crore. A subsidiary of a Chinese company and its related concerns have taken over ₹100 crore bogus advances from shell entities for opening retail showrooms in India, the tax department said in a statement.
The search was conducted after the department received tip off that these entities and their Indian associates were involved in money laundering and hawala transactions through shell entities, the department said. The role of a couple of bank employees has also been detected, the department said, without identifying the Chinese companies or the people involved.
The development comes after India banned dozens of Chinese mobile phone applications and barred Chinese firms from participating in government tenders in the aftermath of the border clash with the neighbour in June that left about 20 Indian soldiers dead.
“Incriminating documents in respect of hawala transactions and laundering of money with active involvement of bank employees and chartered accountants has been found as a result of the search action,” the tax department statement said. Evidence of hawala transactions involving Hongkong and US dollars have been unearthed and further investigations are on, it said.
