more-inAs multiple agencies and regulators probe the suspected use of ‘only-on-paper’ firms for financial irregularities, the government is looking to put in place a proper definition for ‘shell companies’ so that investigations are not hampered and prosecution can withstand scrutiny in courts of law. A key issue has been lack of a proper and uniform definition for ‘shell companies’ — a term generally used for companies that are set up for financial manoeuvrings only or are kept dormant for some future use. These companies generally exist only on paper and may be used for nefarious activities, officials said. Task forceThe Ministry of Corporate Affairs has received preliminary suggestions from a multi-agency task force comprising officials from the Enforcement Directorate, Financial Intelligence Unit, Directorate of Revenue Intelligence, capital markets regulator SEBI and the Income Tax Department, they added. SEBI has suggested entities having no significant operational assets or business activity but acting in a pass-through capacity as conduits may be thus defined.

Source: The Hindu May 13, 2018 15:49 UTC