Hyderabad: The Enforcement Directorate on Saturday conducted raids at shell companies related to YSR Congress chief Y.S. Jagan Mohan Reddy, as part of a larger crackdown on over 100 such firms nationwide.
“ED (conducted) searches at shell companies related to Y.S. Jagan Reddy Rajeshwar Exports and others to unearth their modus operandi (sic),” the ED said on its Twitter handle @dir_ed. Officials said that the searches were conducted in various locations in Bengaluru.
In 2016, the ED had said that its investigations had revealed that Reddy had laundered the proceeds of crime through his group of companies — Sandur Power Company Pvt Ltd, Classic Realty Pvt Ltd, Silicon Builders Pvt Ltd, Saraswati Power and Industries Pvt Ltd and 10 others — in the form of investments, purchase of movable and immovable properties and third party payments among others.
The ED later attached property worth Rs 749 crore belong to Reddy, his wife and other alleged benamis in the money laundering case. Officials said the action was being carried out under the provisions of the Prevention of Money Laundering Act and the Foreign Exchange Management Act to check instances of money laundering and illegal foreign exchange transactions.
The action is part of the mandate given to the ED under a Special Task Force that was recently created by the government on the directions of the Prime Minister’s Office.
Shell companies are defined as firms set up by nominal paid-up capital but having high reserves and surplus on account of receipt of high share premium, investment in unlisted companies, no dividend income, high cash in hand, private companies as majority shareholders, low turnover and operating income, nominal expenses, nominal statutory payments and stock in trade and minimum fixed asset.