Lok Sabha Question No. 1352 (UNSTARRED), answered on 2018-02-09
Subject: Companies involved in Illegal Financial Activities
Ministry: FINANCE
Asked by: V. SATHYABAMA, R.K. BHARATHI MOHAN, PR. SENTHILNATHAN

## GOVERNMENT  OF INDIA MINISTRY OF FINANCE DEPARTMENT  OF FINANCIAL  SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO. 1352

## TO BE ANSWERED ON THE 9 TH  FEBRUARY 2018/  MAGHA  20, 1939  (SAKA) Companies involved  in Illegal Financial Activities

## 1352.  SHRIMATI V. SATHYA BAMA: SHRI BHARATHI  MOHAN  R.K.: SHRI PR. SENTHIL NATHAN:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether   the  Government   has  taken   any   stringent   action   on  Public   and  Private   Limited Companies  and its  Directors   for  their   alleged   involvement in  illegal   financial   activities   and  fraud committed  in banks;
- (b) if  so, the details  thereof  along  with  the list  of companies  and directors  booked  during  the last three  years,  year-wise;
- (c) whether  the Government  is unable  to expedite  certain  cases booked  against  the culprits  for clear  violation  under  Provisions  of Money  Laundering  Act  and Foreign  Exchange  Management  Act regulations  and directives  of Reserve  Bank of  India;
- (d) if so, the  details  thereof  and if not,  the reasons therefor; and
- (e) the action  taken  against  the said companies  by  Enforcement  Directorate,  RBI and Income Tax Departments  so far?

## ANSWER

## The Minister  of State in the Ministry  of Finance (SHRI SHIV PRATAP  SHUKLA)

(a)  to  (e): Directorate   of  Enforcement   has  initiated   investigations   under Prevention   of  Money Laundering   Act  (PMLA),   2002  and  under Foreign   Exchange   Management   Act  (FEMA), 1999 against  320 companies  and 348 Directors  of companies,  who  are suspected to be involved  in illegal financial  activities.  A total  of 168 cases has been filed in the last three  years  and the current  financial year   till   November   2017. Year-wise   details   are at  Annex.   As  regards   other   details,   Enforcement Directorate  has stated that  appropriate  action  in such cases is taken  under  the provisions  of law,  and that  disclosure  of details  is not  in public  interest  as it may hamper ongoing  investigations.

Income-tax  Department  has informed  that  it takes  stringent  action,  in suitable  cases against  persons, including  public  and private  limited  companies  and their  Directors, inter alia, for evading  taxes. Such actions include searches, surveys, assessment  of  income,   levy   of  tax,  penalty and  filing   of prosecution  complaints  before criminal  courts, whichever is applicable  as per direct  tax laws.

Reserve  Bank of India (RBI) has apprised  that  as per its directions,  cases of fraud are required  to be referred  to relevant  law  enforcement  agency  for necessary  action,  and that  specific information in this regard  is not  centrally maintained.

No specific input  has been received  regarding  inability to expedite  cases booked  against  culprits  for clear  violation  under PMLA  and FEMA  regulations  and RBI directives.

***

## Lok Sabha USQ No. 1352  for  9.2.2018,  regarding  'Companies involved  in Illegal Financial Activities'

Annex

| Year    |   No. of cases |   No. ofcompanies involved |   No. of Directors involved |
|---------|----------------|----------------------------|-----------------------------|
| 2014-15 |             58 |                         45 |                          55 |

| 2015-16                       |   33 |   152 |   115 |
|-------------------------------|------|-------|-------|
| 2016-17                       |   34 |    42 |    91 |
| 2017-18 (up to November 2017) |   43 |    81 |    87 |
| Total                         |  168 |   320 |   348 |

Source:  Enforcement  Directorate.