In a massive crackdown against shell companies, a team of officials from the Ministry of Corporate Affairs have discovered that an incredible 114 companies were operating from a single room in a Mall in Hyderabad showing losses of crores of rupees every year to evade taxes by their promoters.
Interestingly, one of the companies was linked to the infamous Satyam Group of B Ramalinga Raju which had collapsed about a decade ago due to serious financial bungling.
The raid was carried out on the Monarch Mall in Jubilee Hills area by the Serious Fraud Investigation office after the Ministry of Corporate Affairs stumbled upon suspicious transactions in the balance sheets of the company. Most of the companies showed losses of more than Rs 15 crore.
According to the sources the companies had directors, were paying salaries and were preparing detailed balance sheets to show losses without any active business operations. Directors of many of the companies were related to each other and were lending money to each other. Some of them were managing up to 30 companies in violation of the law.
A firm SRSR Advisory Service was the accountant for all the shell companies, the documents seized during the raid revealed. One of the shell companies was identified as Hill Country, formerly named Maytas, promoted by the son of Satyam Computers Founder B Ramalinga Raju.
Raju and many of his clan members were the directors of many of the shell companies, officials said. Raju was convicted and imprisoned in Satyam Computers scandal. Sources said similar raids were being carried out at different places across the country to crackdown on the shell companies involved in circulating money and illicit funds.