Friday, January 16, 2015

SEBI probing listed Shell Companies' role in helping Tax evaders - False Capital Gains

The Securities & Exchange Board of India (SEBI) is probing several small companies listed on stock
exchanges for their alleged role in enabling conversion of unaccounted cash into legitimate
money. The regulator is probing whether these companies with no businesses or revenues are
colluding with stock market operators to help tax evaders. SEBI has found out that many of these shell companies have generated fictitious long-term capital gains for individuals. The regulator is also
examining the ultimate beneficiaries of such trades, said a person familiar with the development. SEBI's preliminary investigation has shown that funds are transferred through several layers to hide the true identity of the ultimate beneficiary or owner.

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