The Mumbai Police Economic Offences Wing (EOW) issued Look Out Circulars (LOCs) against 56 Chinese nationals for illegally becoming directors of Indian firms, some of which turned out to be shell corporations. At least 39 cheating and forgery incidents have been reported since April of this year. Based on complaints submitted by the Mumbai Registrar of Companies, FIRs are filed. Numerous Chartered Accountants (CAs) and Company Secretaries (CSs) have reportedly been identified by the EOW investigation as having assisted the suspected foreigners.
The EOW is now looking into the following allegations: They were assisted in registering alleged shell corporations in the names of Indian nationals, appointing foreigners as the firms’ directors, and transferring the entities to them for exorbitant fees by the accused CAs and CSs. EOW authorities said that they are investigating if the suspected Chinese nationals established firms with the goal to help in the conduct of any more serious financial crimes in India or not.
According to officials speaking about the case, the accused promoted using the names of their friends and family. The registrar’s office received paperwork and incorrect information from them. All of the documents they had supplied were found to be fraudulent after physical verification. This is also where the EOW investigation began. As of yet, no one has been arrested. All of the defendants have been charged with criminal conspiracy, criminal breach of trust, cheating, falsifying financial records, and related Company Act provisions.
The inquiry is still ongoing, according to officials, and nothing definitive has been learned so yet. The statements of all CAs and CSs are being recorded while they are being questioned. Finding out why the accused Chinese nationals established shell firms in India is the first and foremost goal for us. As the investigation moves forward, central agencies like the CBI and IB personnel are keeping track of it.
This is a part of a national campaign against shell corporations with fictitious Indian directors that have ties to China. The EOW of the Mumbai Police had filed 34 FIRs against 150 individuals, including 60 foreigners, 40 of whom were Chinese citizens, in April of this year. These individuals were accused of breaking the law governing the registration of new companies and of fraudulently becoming directors of Indian corporations.
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