During investigation, Sandeep Singh Dua said that he was a active member of a gang of cheats and businessmen who used dummy accounts of shell companies for transactions to avoid income tax.
“For the second drive to be launched during 2018-19, 2,25,910 companies have been further identified for being struck off under section 248 of the Companies Act, 2013...for non-filing of financial statements for 2015-16 and 2016-17,” a finance ministry statement said, on Friday.
The ED claimed that out of these 120 shell companies, 80 firms were being used by billionaire jeweler Nirav Modi and his uncle Mehul Choksi to route funds.
Minister of State for Corporate Affairs PP Chaudhary said that his ministry is probing deposits of over $1 billion made by around 20,000 companies during the cash ban last year.
The government is said to be planning to invoke Section 447 of the Companies Act which provides for imprisonment of up to 10 years and penalty that could extend to three times the amount of fraud involved.
Stock exchanges are sending notices to at least 500 publicly traded firms seeking explanations on why their directors have been disqualified.
A perusal of bank accounts of 5,800 companies 'struck off' the Register of Companies has revealed multiple accounts linked to them that carried out heavy transactions post November 8.
Government said that non-compliant companies are tarnishing the image of good ones and assured that genuine corporates will not face action.
After the recent crackdown, the total number of directors disqualified by the ministry has reached 3,00,000.
Banks are assessing whether the disqualified directors have links to shell companies and diverted funds.
Names of prominent political and business leaders feature on the list of disqualified directors made public by the government
Further tightening the noose around black money hoarders, the government has said that more than 1.06 lakh directors will be disqualified for their association with shell companies
Officials said a large number of companies having acted as 'shell firms' are linked to real estate, commodities and stock broking, films and television, plantation and non-banking financial services
The development comes a day after the market regulator directed the two major indices -- National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE) -- through a letter to initiate action against the suspected firms
The Central Bureau of Investigation (CBI) today conducted raids at 23 locations in Ranchi and Kolkata in connection with suspected shell companies involved in hawala dealings
Liquor baron Vijay Mallya had allegedly floated 20 shell companies, directors of which were either his personal staff or those who retired, the ED has said in its recent chargesheet filed in the KFA-IDBI money laundering case