PNB Fraud case: 200 shell companies and benami assets under scanner of IT Department and ED

As many as 200 shell companies and benami assets of the accused -the diamond czar Nirav Modi and his business partner Mehul Choksi are under the scanner of the Income Tax department and the Enforcement Directorate that are investigating the Rs. 11,400 crore fraud case of the Punjab National Bank. Shell companies are the companies that run without any active business operations, incorporated mainly to avoid taxes or sometimes to hide black money. Although, shell companies are not illegal but the present government has been constantly taking actions against such shell companies in order to curb the menace of money laundering and black money in the country. A senior official of the Enforcement Directorate said that these 200 shell companies were being used to route and receive funds as a part of the alleged fraud. He further said that it is suspected that the shell firms were being used by the accused to launder money and create & quot benami& quot assets in the form of land, gold and precious stones, which is now being probed by the tax department. The Central Bureau of Investigation has also sealed the Mumbai branch of the Punjab National Bank from where the fraud originated. The fraud came on February 14, when the PNB declared that it had discovered fraudulent and unauthorized transactions worth Rs. 11, 400 crore at its Mumbai branch. Later, a case was registered against the bank employees and four other people including diamond czar Nirav Modi and Mehul Choksi, the managing director of Gitanjali Gems. Both the ED and the IT department have formed special teams to investigate the alleged case. The Enforcement Directorate will also be assessing 29 properties of Modi and his family under the provisions of the Prevention of Money Laundering Act, 2002. These properties were earlier provisionally attached by the Income Tax Department. The ED has also raided almost 45 premises of the accused that included jewelry showrooms and workshops. The IT department has up till now attached 29 properties and 105 bank accounts of Modi and his family members. Further, it has also attached nine bank accounts of Gitanjali and its promoters Mehul Choksi and others in connection with a tax evasion probe against them. The ED has also seized diamonds, gold jewelry and other precious stones worth Rs. 5,674 crore in the case.