Corporate Affairs Ministry cracks down on Chinese shell companies, mastermind arrested

A person was held in relation to India's crackdown on Chinese shell companies. The Ministry of Corporate Affairs said the Serious Fraud Investigation Office (SFIO) arrested one Dortse, member of board of Jilian India Ltd, for masterminding the incorporation of a large number of shell companies with Chinese links in India and providing dummy directors on the boards.

Indian employees were in touch with their Chinese counterparts through Chinese instant messaging app Husys, which was found to be acting on behalf of Jilian India, according to a ministry statement.

Dortse 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, it said.

He had shown himself to be a resident of Mandi in Himachal Pradesh as per the records filed with the Registrar of Companies, it added.

The arrest was made after simultaneous search and seizure operations conducted by the Ministry of Corporate Affairs on September 8 at 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, according to the ministry.

"Boxes filled with company seals and digital signatures of dummy directors have been recovered from the site. The Indian employees were in touch with the 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 said.

It also said investigations so far have revealed the possible involvement of these shell companies in serious financial crimes detrimental to the financial security of the country.