September 27, 2022 8:18 am

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SFIO busts racket of Chinese shell companies in India

The mastermind of this racket identified as Dortse was arrested on 10th September after the Union Finance Ministry ordered The Ministry of Corporate Affairs (MCA) to probe the matter.

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The Serious Fraud Investigation Office(SFIO) has busted the network of the illegal Chinese shell companies working in India. The mastermind of this racket identified as Dortse was arrested on the 10th September after the Finance Minister Nirmala Sitharaman ordered The Ministry of Corporate Affairs(MCA) to probe the matter.

Background of the issue

  • On 8th September 2022, Nirmala Sitaraman ordered MCA to conduct raid and seizure operations on the offices of Jillian Consultants India Private Ltd Gurgaon, Finity Pvt Ltd Bengaluru and Husys Consulting Ltd Hyderabad.
  • MCA further ordered its investigating wing, SFIO to conduct searches at Jillian India and 32 other companies
  • The evidences revealed that dummy directors were paid by Jillian India to act as dummies in various shell companies.
  • This was confirmed after boxes filled with digital signatures of dummy directors and company seals were recovered from the spot.

What actually happened ?

  • The mastermind named Dortse was arrested thereafter, who identifies himself as a resident of Mandi, Himachal Pradesh. 
  • He has been linked with incorporating a large number of shell companies in India with Chinese influence and also providing dummy directors for the same.
  • He along with a Chinese national has been on the Board of Jillian India Ltd, which is a wholly owned subsidiary of Jilian Hong Kong Ltd. 
  • The Indian employees at Jillian had been in regular contact with their Chinese counterparts through an instant Chinese messaging app. 
  • The Husys consulting Ltd has also been acting on behalf of Jillian India Ltd.
  • These shell companies have been identified with their involvement in serious financial frauds that hampers the financial security of a country.

Way Forward

Nirmala Sitaraman has ordered the investigation of any fraudulent cases by illegal loan apps and shell companies. These apps and companies offer micro-credit to low-income groups at unreasonable interest rates, hiding processing fees and later resorting to ravening recovery practices.

MCA plans to identify these companies and deregister them to prevent any future misuse. 

The government is taking such steps to prevent any future cases of money laundering, tax evasions and data breach.

The Indian Affairs Staff
The Indian Affairs Staff

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