The currency ban hit Indian companies at a time the economy was just looking up. Some of the companies in retail, consumer products, and rural areas were hit so badly that they could not recover for six months.
There are many examples how Corporate India used its network to get rid of its cash. A large indebted company, which had defaulted on giving salaries for four months before demonetization, gave three months salary in old currency so that the employees can deposit it in their accounts. Another company, which had close ties with private banks, summoned top bank officials in their office to get rid of the old cash.
Hundreds of bullion traders, property dealers, civil contractors, shell companies, petrol pump owners and cooperative societies moved thousands of crores into multiple bank accounts during November 8, 2016, to December 30, 2016, to obscure the trail of slush funds.
Money control has exclusive details from the I-T department’s status report on “Operation Clean Money” collated in May 2017 based on cash deposits made in banks during the demonetization drive.
last November, the government canceled old Rs 500 and Rs 1,000 currency notes as legal tenders as part of larger efforts to fight the black money problem and corruption.
According to the government, one company was having as many as 2,134 accounts. The information regarding such firms has been shared with enforcement authorities for further action.
With respect to deregistered companies, state governments have been advised to disallow registration of properties of such entities.
The government has initiated steps to disqualify directors who are on the boards of the companies that failed to file annual returns for three financial years — 2013-14 to 2015-16.
While noting that about 3.09 lakh directors have been affected by the action, the government said the preliminary inquiry has shown that over 3,000 disqualified directors are “directors in more than 20 companies each, which is beyond the limit prescribed under the law”.
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