Sangeeta Lakhi, a senior partner at Rajani Associates, a law firm based in Mumbai, talks to The National about the problems caused by shell companies in India.
Why is the Indian government is moving to crack down on shell companies?
Over the past 12 months, the regulators have highlighted the issue of shell companies. The regulators fear that left unchecked, shell companies may be utilised for various illegal purposes, including money laundering.
Has India already done a lot to target this issue?
India has taken effective steps to prevent money laundering, counterfeiting, hoarding and tax evasion. Last year, a special investigations team on black money reported that large amounts of unaccounted wealth was stored and used in the form of cash by listed shell companies, using the stock exchange platform, helping the tax evaders convert black money into white while taking the advantage of exemptions available for long-term capital gains.
What about demonetisation?
While, on the one hand, the government thought that demonetisation will curb tax evasion, on the other hand, there was a surge in deposits of cash amounts by shell companies, seemingly in a bid to hide who owned that wealth. The exercise of demonetisation was somewhere brought to a nought. The government then decided to monitor and crack down on such shell companies.
Why are there so may shell companies in India?
Owning a shell company does not necessarily imply any wrongdoing and such shell corporations are not illegal per se. Until recently, Indian companies were permitted to incorporate multiple layers of companies to operate their business. Some of these companies are used for various business and tax purpose, more particularly, between the companies themselves. What is not ethical is using such companies to the disadvantage of the revenue department and gaining unjust advantage from transactions by such shell companies. Shell companies are used to evade tax and undertake nefarious activities, more so at time such as demonetisation.
How effective are the steps that are being taken?
It will take years, maybe a decade, before the government may be able to control and ring fence such nefarious activities. To achieve this, the government must gather financial data and sync several databases, including data from the tax department, registrar of companies, and banks to detect unusual financial transactions. Additionally, litigation by way of appeals, writ petitions and public interest litigation - more particularly after the Supreme Court recently declared right to privacy to be a fundamental right by the affected parties - may also delay or frustrate the efforts of the government in dealing with black money and tax evasion.
Could the steps to crack down on shell companies help boost confidence among investors?
On the contrary, investors will be confused as to whether to believe in the companies that they have invested in or believe in the Indian government, which throws up such surprises on a regular basis.
Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Porsche Macan T: The Specs
Engine: 2.0-litre 4-cyl turbo
Power: 265hp from 5,000-6,500rpm
Torque: 400Nm from 1,800-4,500rpm
Transmission: 7-speed dual-clutch auto
Speed: 0-100kph in 6.2sec
Top speed: 232kph
Fuel consumption: 10.7L/100km
On sale: May or June
Price: From Dh259,900
%E2%80%98FSO%20Safer%E2%80%99%20-%20a%20ticking%20bomb
%3Cp%3EThe%20%3Cem%3ESafer%3C%2Fem%3E%20has%20been%20moored%20off%20the%20Yemeni%20coast%20of%20Ras%20Issa%20since%201988.%3Cbr%3EThe%20Houthis%20have%20been%20blockading%20UN%20efforts%20to%20inspect%20and%20maintain%20the%20vessel%20since%202015%2C%20when%20the%20war%20between%20the%20group%20and%20the%20Yemen%20government%2C%20backed%20by%20the%20Saudi-led%20coalition%20began.%3Cbr%3ESince%20then%2C%20a%20handful%20of%20people%20acting%20as%20a%20%3Ca%20href%3D%22https%3A%2F%2Fwww.google.ae%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3D%26esrc%3Ds%26source%3Dweb%26cd%3D%26ved%3D2ahUKEwiw2OfUuKr4AhVBuKQKHTTzB7cQFnoECB4QAQ%26url%3Dhttps%253A%252F%252Fwww.thenationalnews.com%252Fworld%252Fmena%252Fyemen-s-floating-bomb-tanker-millions-kept-safe-by-skeleton-crew-1.1104713%26usg%3DAOvVaw0t9FPiRsx7zK7aEYgc65Ad%22%20target%3D%22_self%22%3Eskeleton%20crew%3C%2Fa%3E%2C%20have%20performed%20rudimentary%20maintenance%20work%20to%20keep%20the%20%3Cem%3ESafer%3C%2Fem%3E%20intact.%3Cbr%3EThe%20%3Cem%3ESafer%3C%2Fem%3E%20is%20connected%20to%20a%20pipeline%20from%20the%20oil-rich%20city%20of%20Marib%2C%20and%20was%20once%20a%20hub%20for%20the%20storage%20and%20export%20of%20crude%20oil.%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3EThe%20%3Cem%3ESafer%3C%2Fem%3E%E2%80%99s%20environmental%20and%20humanitarian%20impact%20may%20extend%20well%20beyond%20Yemen%2C%20experts%20believe%2C%20into%20the%20surrounding%20waters%20of%20Saudi%20Arabia%2C%20Djibouti%20and%20Eritrea%2C%20impacting%20marine-life%20and%20vital%20infrastructure%20like%20desalination%20plans%20and%20fishing%20ports.%C2%A0%3C%2Fp%3E%0A
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
NINE WINLESS GAMES
Arsenal 2-2 Crystal Palace (Oct 27, PL)
Liverpool 5-5 Arsenal (Oct 30, EFL)
Arsenal 1-1 Wolves (Nov 02, PL)
Vitoria Guimaraes 1-1 Arsenal (Nov 6, Europa)
Leicester 2-0 Arsenal (Nov 9, PL)
Arsenal 2-2 Southampton (Nov 23, PL)
Arsenal 1-2 Eintracht Frankfurt (Nov 28, Europa)
Norwich 2-2 Arsenal (Dec 01, PL)
Arsenal 1-2 Brighton (Dec 05, PL)
UAE currency: the story behind the money in your pockets
more from Janine di Giovanni
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
UAE's role in anti-extremism recognised
General John Allen, President of the Brookings Institution research group, commended the role the UAE has played in the fight against terrorism and violent extremism.
He told a Globsec debate of the UAE’s "hugely outsized" role in the fight against Isis.
"It’s trite these days to say that any country punches above its weight, but in every possible way the Emirates did, both militarily, and very importantly, the UAE was extraordinarily helpful on getting to the issue of violent extremism," he said.
He also noted the impact that Hedayah, among others in the UAE, has played in addressing violent extremism.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
How%20to%20avoid%20getting%20scammed
%3Cul%3E%0A%3Cli%3ENever%20click%20on%20links%20provided%20via%20app%20or%20SMS%2C%20even%20if%20they%20seem%20to%20come%20from%20authorised%20senders%20at%20first%20glance%3C%2Fli%3E%0A%3Cli%3EAlways%20double-check%20the%20authenticity%20of%20websites%3C%2Fli%3E%0A%3Cli%3EEnable%20Two-Factor%20Authentication%20(2FA)%20for%20all%20your%20working%20and%20personal%20services%3C%2Fli%3E%0A%3Cli%3EOnly%20use%20official%20links%20published%20by%20the%20respective%20entity%3C%2Fli%3E%0A%3Cli%3EDouble-check%20the%20web%20addresses%20to%20reduce%20exposure%20to%20fake%20sites%20created%20with%20domain%20names%20containing%20spelling%20errors%3C%2Fli%3E%0A%3C%2Ful%3E%0A
Cricket World Cup League 2 Fixtures
Saturday March 5, UAE v Oman, ICC Academy (all matches start at 9.30am)
Sunday March 6, Oman v Namibia, ICC Academy
Tuesday March 8, UAE v Namibia, ICC Academy
Wednesday March 9, UAE v Oman, ICC Academy
Friday March 11, Oman v Namibia, Sharjah Cricket Stadium
Saturday March 12, UAE v Namibia, Sharjah Cricket Stadium
UAE squad
Ahmed Raza (captain), Chirag Suri, Muhammad Waseem, CP Rizwan, Vriitya Aravind, Asif Khan, Basil Hameed, Rohan Mustafa, Kashif Daud, Zahoor Khan, Junaid Siddique, Karthik Meiyappan, Akif Raja, Rahul Bhatia
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
Pupils in Abu Dhabi are learning the importance of being active, eating well and leading a healthy lifestyle now and throughout adulthood, thanks to a newly launched programme 'Healthy Lifestyle'.
As part of the Healthy Lifestyle programme, specially trained coaches from City Football Schools, along with Healthpoint physicians have visited schools throughout Abu Dhabi to give fun and interactive lessons on working out regularly, making the right food choices, getting enough sleep and staying hydrated, just like their favourite footballers.
Organised by Manchester City FC and Healthpoint, Manchester City FC’s regional healthcare partner and part of Mubadala’s healthcare network, the ‘Healthy Lifestyle’ programme will visit 15 schools, meeting around 1,000 youngsters over the next five months.
Designed to give pupils all the information they need to improve their diet and fitness habits at home, at school and as they grow up, coaches from City Football Schools will work alongside teachers to lead the youngsters through a series of fun, creative and educational classes as well as activities, including playing football and other games.
Dr Mai Ahmed Al Jaber, head of public health at Healthpoint, said: “The programme has different aspects - diet, exercise, sleep and mental well-being. By having a focus on each of those and delivering information in a way that children can absorb easily it can help to address childhood obesity."
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
PROFILE BOX
Company name: Overwrite.ai
Founder: Ayman Alashkar
Started: Established in 2020
Based: Dubai International Financial Centre, Dubai
Sector: PropTech
Initial investment: Self-funded by founder
Funding stage: Seed funding, in talks with angel investors
