Ministry result

Ministry of Corporate Affairs searches 300 entities with Chinese nationals on board

The Ministry of Corporate Affairs (MCA) conducted a search on Thursday of 300 entities with Chinese nationals on board after its preliminary found they were engaged in “questionable activities”. The raids were carried out in various locations, including Delhi, Hyderabada and Bengaluru, after MCA’s investigation revealed that many of them were “fictitious entities” formed to falsify credentials and had by following on board Chinese nationals who controlled the affairs of the companies.

This is probably the first example of a pan-India coordinated search operation by the ministry to crack down on entities with Chinese nationals on board. As of April, the MCA had registered more than 700 cases across the country against companies with Chinese nationals as promoters and directors. Among those under investigation are Vivo, Xiaomi, Oppo and several Indian units of Alibaba. “The Companies Act empowers the Registrar of Companies (RoC) or the Inspector (of MCA) to carry out search and seizure operations. This is done once the preliminary investigation indicates that there are grounds to believe that the companies are violating the provisions of the law,” said an officer familiar with the development.

These sources added that the MCA investigation revealed that most of these entities use a similar modus operandi: local entities are formed by filing fabricated documents and registering them when the companies do not actually exist. These companies are then transferred to Chinese partners by deceiving the Republic of Congo,” another official explained. “Now that the preliminary investigation indicates it, research was necessary to gather evidence. In many cases they have been found in dubious businesses like offering instant loans through mobile apps and then threatening or blackmailing customers into paying two or three times the amount used or in some cases, they are used as a means of money laundering,” the official added. .