Ministry of Corporate Affairs crackdown on Chinese shell companies in India; SFIO arrests mastermind & chief plotter

The Ministry of Corporate Affairs (MCA) crackdown on Chinese shell companies in India after the simultaneous search and seizure operations. During this, the Serious Fraud Investigation Office (SFIO) arrested the mastermind and chief plotter in the case – Dortse on Friday.

According to an official statement, “MCA on 8th September 2022 conducted raids on the offices of Jillian Consultants India Private Ltd, a wholly owned subsidiary of Jilian Hong Kong Ltd, at Gurgaon, Fininty Pvt Ltd at Bangalore and Husys Consulting Ltd, an erstwhile listed company at Hyderabad.”

Dortse is on the Board of Jillian India Ltd and has clearly emerged as the mastermind of the whole racket of incorporating a large number of shell companies with Chinese links in India and providing dummy Directors on their Boards, the ministry further stated in its release.

The arrested person Dortse had shown himself to be a resident of Mandi in Himachal Pradesh as per the records filed with the Registrar of Companies (ROC), the ministry also said.

​Evidence procured during the enquiry by ROC Delhi and the simultaneous search operations clearly points to dummy Directors being paid by Jilian India Ltd. to act as dummies in several shell companies, MCA discovered in the investigation.

Boxes filled with company seals and digital signatures of dummy directors have been recovered from the site, the ministry noted.

“The Indian employees were in touch with their Chinese counterparts through a Chinese instant messaging app. Husys Ltd, was also found to be acting on behalf of Jilian India Ltd. Initial observations reveal that Husys Ltd. had a pact with Jilian Hong Kong Ltd,” it also said.

The ministry observed that the investigations so far have revealed the possible involvement of these shell companies in serious financial crimes detrimental to the financial security of the country.

The Ministry of Corporate Affairs, under whose aegis SFIO operates, had assigned the investigation of Jilian Consultants India Private Limited and 32 other companies to SFIO on 9th September 2022.

Dortse and one Chinese national are the two directors in Jilian Consultants India Private Limited, the ministry also said post its investigation in the case.

Based on inputs and the investigations carried out, it was gathered that Dortse had fled from Delhi NCR to a remote place in the state of Bihar and was attempting to escape India through the road route, the probe further revealed.

Immediately, a special team was constituted in SFIO which was deputed to the said remote place, MCA said adding that on the evening of 10th September 2022, SFIO had arrested Dortse, who was later produced in the Jurisdictional Court and Orders for his transit remand were obtained.