Money laundering signal: Only 6 lakh of 15 lakh firms file returns with MCA

Close to 9 lakh registered companies are not filing annual returns with the Ministry of Corporate Affairs (MCA) and are a potential source of money laundering, Revenue Secretary Hasmukh Adhia said on Saturday. The MCA has sent notices to nearly 3 lakh unlisted companies, asking them to deregister themselves and issuance of notices to the remaining

The MCA has sent notices to nearly 3 lakh unlisted companies, asking them to deregister themselves and issuance of notices to the remaining

kh Adhia said on Saturday. The MCA has sent notices to nearly 3 lakh unlisted companies, asking them to deregister themselves and issuance of notices to the remaining is underway.

Speaking at an Enforcement Day event here, Adhia said that out of the 15 lakh companies, only 6 lakh are filing their returns, including annual audited report, with the MCA. "Howcan we have in this country almost 8-9 lakh companies which are not filing any return to the government and they have become a potential threat, a potential source of money laundering. So, the task force has taken it up in right earnest," he said.

"Howcan we have in this country almost 8-9 lakh companies which are not filing any return to the government and they have become a potential threat, a potential source of money laundering. So, the task force has taken it up in right earnest," he said.

In a major crackdown on domestic shell companies, the government in February had decided to take "harsh punitive" action, including freezing of their bank accounts used to launder money or evade taxes. The task force set up with members from regulatory ministries and enforcement agencies held its meeting this week.

"After registering (with the MCA), if companies do not file their return to the MCA, then there is no reason for us to let such companies operate in India. They become a potential threat. That is one strategy that we are working on," Adhia said.

The top official said all of the 9 lakh companies which do not file return with the MCA might not be shell companies and just be idle ones not transacting any business. As per the income tax department records, out of the 15 lakh companies registered in India, only 6 lakh file returns. Out of these 6 lakh, about 3 lakh show nil income.

According to Adhia, trade-based money laundering is also becoming a potential big source of money laundering these days as was witnessed in the Rs 6,000-crore Bank of Baroda case. The case was successfully cracked by the Enforcement Directorate (ED) and the Directorate of Revenue Intelligence (DRI).