Fake Shell Company With 2,000 Bank Accounts Transacted Rs 4,000 Crore; Reveals Demonetisation

The government’ has unearthed cash transaction of up to Rs 4,000 crore by a fake company which had more than 2000 bank accounts, during the time of demonetisation, the Defence Minister Nirmala Sitharaman said yesterday, 8 November 2017, according to a report by the Moneycontrol.

She said, “We have spoken in public about the operation of fake shell companies. One such fake company had about 2,000 bank accounts. The company did not disclose the detail of how it generated the income. But it came to light that the company had 2,000 bank accounts.”

The minister also said the company used the government’s 2016 deadline asking people to deposit old Rs 1,000 and rs 500 notes in bank accounts to convert black money to white.

Positive outcomes of demonetisation

“This incident has been unearthed and now the company has been shut,” the Defence Minister further told the Moneycontrol. Sitharaman further asked the opposition weather this news could come under light is the economic reform of demonetisation wouldn’t have been implemented.

“If the note ban wasn’t imposed and well implemented, do you think this incident would have come out? There are people who just wanted to make unnecessary arguments,” she further said, in an attempt to snub the opposition.

The opposition has been consistently taking a dig at the government by pointing out that the exercise of demonetisation had been futile and it caused unwanted chaos and hardships for the common man. In a report by the Reserve Bank, it was pointed out that 99% of the banned notes in circulation was back to the bank. The opposition has been constantly raising the question that, was the entire commotion worth the 1%.

The Defence Minister said though demonetisation led to hardships for the common people it surely gave those with undeclared assets, unaccounted cash, a chance to declare them on or before 30 September 2016. She added,“You were given a chance to declare undeclared assets. After the withdrawal of Rs 500 and Rs 1000 legal tenders, did such fake companies come to light.” The citizens who regularly paid taxes did not question or criticise the government’s move.

Unearthing these transactions

Noting that the BJP government decided to include unearthing of black money in its 2014 poll manifesto, she said that despite his old age, BJP stalwart, LK Advani took up a country-wide yatra against black money. She also pointed out the UPA government had not even formed a Special Investigating Team (SIT) despite being directed to do so by the Supreme Court.

“It was the Narendra Modi government which did it immediately after assuming office. We are taking steps to curb black money step by step,” Sitharaman added. The SIT is headed by former SC judge MB Shah and it is responsible for investigating into various cases of black money stashed abroad. It performs in coordination with various members of the Reserve Bank of India, Intelligence Unit, Enforcement Directorate, the Central Bureau of Investigation, the Financial Intelligence Unit and the Research and Analysis Wing.

She also stated that terror funding has come down to a large extent after the note ban. With demonetisation being implemented Naxalite activities have also come to an end. In Naxal hit areas, they often threaten the road contractors for the commission, but now after demonetisation, such activities also have come to a halt.

The Logical Indian take

Demonetisation has been a widely debated topic in the past one year. There are reasons which prove that the economic reform taken up by the government is a failure and that it has adversely affected the Indian economy to a large extent by slowing down the growth in the first quarter.

But the note ban was implemented was implemented for the reason of fighting black money and to wipe out corruption. A few other reasons were to push India towards a digital economy and reduce terror funding. With such incidents coming into light, one can actually say that the demonetisation did help in gutting out black money from the system The Logical Indian community upholds the SIT in investigating such incidents of where humongous transactions of black money have occurred. It urges the concerned authorities to look into the matter and ensure that the defaulters are taken into account and booked.

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