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Govt plans to create economic offenders list to keep a check on financial fraud

The move comes at a time when the government is facing stiff criticism from the opposition parties for failing to arrest Nirav Modi - the key accused in the multi-billion PNB bank fraud.

twitter-logo BusinessToday.In   New Delhi     Last Updated: July 23, 2018  | 16:50 IST
Govt plans to create economic offenders list to keep a check on financial fraud

The government is planning to prepare a master list of all economic offenders that will help the authorities to prevent such people from fleeing the country. According to a report in the Hindustan Times, the government has asked the Central Economic Intelligence Bureau (CIEB) to create the list -which will get the inputs from agencies such as the ED, CBI , SEBI, Income Tax, Customs Department, and DRI.

The move comes at a time when the government is facing stiff criticism from the opposition parties for failing to arrest Nirav Modi - the key accused in the multi-billion PNB bank fraud who fled the country days before the CBI initiated the probe.

A threshold has been set for each agency, and cases registered that involve amounts above that limit will be reported to CEIB. For example, customs will report cases registered for duty evasion of above Rs 1 crore. In the case of the tax department only raids conducted or authorised by the Central Board of Direct Taxes will be taken into account by CEIB, the report said.

"Most of our probe and enforcement agencies work in silos. So if a particular agency is investigating someone, a comprehensive list of economic offenders will help it know if the person on any other agency's radar," the HT quoted an official as saying.

The official, according to the report, further said that the DRI and the tax department were already probing Nirav Modi since 2014 and 2017, respectively. "Access to this information by all investigation agencies could have further sharpened our response to Nirav Modi once he fled the country before the filing of an FIR by CBI," the official said.

Last month, it was reported that the government was planning a massive verification process of top company executives to keep a check on shell firms and prevent those in top management from fleeing the country to escape prosecution. During the verification process, the government will do a complete KYC of company directors that will at the minimum include passport, PAN number and contact details.

The government will have a new form for the physical address of the company which will have to be updated annually by the company secretary. For foreign nationals, there will be a separate form but even they will have to be registered with the Ministry. Ministry of Corporate Affairs Secretary Injeti Srinivas recently said that as many as 33 lakh company directors would be registered as part of the KYC programme.

The idea of KYC came in the backdrop of PNB scam in which Nirav Modi and his uncle Mehul Choksi defrauded the state-run bank through multiple shell firms.

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