Indian fraud investigators say they have uncovered a web of shell companies with links to China created to conduct illegal transactions.
Authorities said they had arrested a man on Sunday who had masterminded the creation of the companies and appointed dummy directors to run the fraudulent businesses.
The latest arrest was part of a larger probe launched by the federal government’s Serious Fraud Investigation Office (SFIO) against founders of shell companies used to conduct illegal transactions.
Earlier this month the government began cracking down on Indian entities that were providing fake directors to some shell companies linked to China.
The SFIO said it had arrested a man called Dortse, who was on the board of Jillian India Ltd, a wholly owned subsidiary of Jillian Hong Kong Ltd, and had raided multiple places to unearth the scam.
It did not describe the Chinese links of the shell companies nor disclose the nature of frauds allegedly perpetrated.
For directors of the several of the shell companies, Dortse would use the names of Indian citizens who had no education and worked in menial jobs, according to the SFIO.
The Indian Express newspaper reported that local police had arrested two directors of a company, including a Chinese national, for their alleged involvement in providing dummy directors to shell companies linked to China.
- Reuters with additional editing by Sean O’Meara