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1 company, 2134 bank accounts: How firms tried to hide black money after note ban

India Today logo India Today 06-10-2017 IndiaToday.in

A money lender counts Indian rupee currency notes at his shop in Ahmedabad © REUTERS/Amit Dave/Files A money lender counts Indian rupee currency notes at his shop in Ahmedabad The Centre today said it has received information from 13 banks about 5,800 companies that used multiple bank accounts to hide black money after demonetisation.

Earlier this year, the government had struck off 2,09,032 companies from the Register of Companies because of suspicious transactions.

The operation of bank accounts of these 2 lakh suspicious companies was then restricted to just the discharge of their liabilities.

HOW THESE FIRMS OPERATED

So, what did these companies do? All the cash that demonetisation made worthless had to be exchanged. But then there was a limit to how much one could deposit in each account. So, some companies tried the simplest of tricks - open multiple bank accounts and break up the big figure into smaller amounts.

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Some of these companies had over 100 accounts to their names. One company opened a massive 2,134 accounts. There were many others with the number of accounts in the range of 900 and 300. That added up to 13,140 accounts for 5,800 companies. Accounts were opened, money deposited and the accounts were quickly bottomed out.

When banks started investigating the trail of cash-to-account-to-cash, the real story emerged. Before demonetisation was announced on November 8, 2016, these companies had a balance of just Rs 22.05 crore, not including the loan accounts, where borrowed funds were kept.

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Between November 9 and the day their names were struck off from the Register of Companies, they had deposited a massive Rs 4,573.87crore and also withdrawn an equally large amount of Rs 4,552 crore. In fact, with loan accounts, there was a negative balance of Rs 80.79 crore in these accounts.

ALL BANKS WERE TARGETED

The bid to hoodwink the authorities was across banks. In one bank, 429 companies had zero balance on November 8, deposited and withdrew over Rs 11 crore leaving a cumulative balance of just Rs 42,000 on the date the accounts were frozen.

In another bank, more than 3,000 companies, most with multiple accounts, had a cumulative balance of about Rs 13 crore on the day demonetisation was announced. They deposited and withdrew about Rs 3,800 crore leaving a negative cumulative balance of almost Rs 200 crore at the time of freezing of their accounts.

The accounts were not operated after withdrawing money with only paltry balance left in them. Some companies were so adventurous that they made deposits and withdrawals even after being struck off the list knowing well that they were under investigation.

Details about 5,800 companies accounts for just 2.5 per cent of over 2 lakh companies that were struck off the list are under investigation. Investigative agencies have been asked to complete necessary investigation in a time bound manner.

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