Govt cracks down on Chinese firms over laundering, hawala

Tribune News Service

New Delhi, August 12

The government has cracked down on Chinese establishments with the Income Tax Department conducting several search operations.

According to sources in the I-T Department, a few Chinese individuals and their Indian associates were prima facie involved in money laundering and hawala transactions through shell entities.

In the raids that were carried out on various premises of Chinese entities, their close confederates and some bank employees, IT Department sources claimed to have found that at the behest of Chinese individuals, more than 40 bank accounts were created in various dummy entities and were used in the transactions of over Rs 1,000 crore over the period, said a statement by the Ministry of Finance. No details were provided.

Bank employees involved: Sources

• I-T Department sources claim at the behest of Chinese individuals, more than 40 bank accounts were created in various dummy entities and used in transactions of over Rs1,000 crore over the period
• Incriminating documents of hawala transactions and money laundering with active involvement of bank employees and chartered accountants have been found as a result of the search action

The findings also included a subsidiary of a Chinese company and its related concerns that have allegedly taken over Rs 100 crore bogus advances from shell entities for opening businesses of retail showrooms in India.

Besides, incriminating documents in respect of hawala transactions and money laundering with the active involvement of bank employees and chartered accountants have also been found as a result of search action.

In the search operation, which is still in the process, evidence of foreign hawala transactions, involving Hong Kong and US dollars, has also been unearthed, claimed the ministry press release, which said the search operation was based on “credible information”.

Meanwhile, some of the biggest importers of Chinese goods have decided to turn a new leaf. The Confederation of All India Traders (CAIT) has launched a campaign “China Quit India” and said there was an urgent need to check China’s growing footsteps in India and import of Chinese goods.

Meanwhile, there are confabulations in the Finance Ministry over an order issued on July 23 that amended the General Financial Rules, 2017, “to enable imposition of restrictions on bidders from countries which share a land border with India on grounds of defence and national security”.

The problem is the rules apply to Hong Kong, which is controlled by China. This has affected several European companies that are headquartered in Hong Kong, but have operations in India, among several other countries in the region.