SFIO arrests 'mastermind' behind incorporating shell companies with Chinese links

The arrest comes against the backdrop of the crackdown on Chinese shell companies that are allegedly into 'serious financial crimes'

The officials of the Serious Fraud Investigation Office (SFIO) has arrested a man with links to China for running a racket of shell companies and committing financial crimes in India.

Dortse, who is on the board of Jillian Consultants India Private Limited, was arrested from “a remote place” in Bihar on Saturday, just before he was about to flee the country, apparently to make an attempt to travel to China through Nepal. The Jilian Consultants India Private Limited is a wholly owned subsidiary of the Jilian Hong Kong Limited and has offices at Gurgaon in Haryana.

The arrest by the SFIO came close on the heels of the searches conducted by the Directorate of Enforcement (ED) at six premises in Bengaluru earlier this month in connection with the Chinese Loan App case. The Directorate of Revenue Intelligence (DRI) earlier conducted a probe into Oppo Mobiles India Private Limited and found that the subsidiary of Guangdong Oppo Mobile Telecommunications Corporation Limited of China had evaded customs duty worth Rs 4,389 crore in India. The ED also probed Vivo for alleged money laundering by its Indian subsidiary.

Ihe SFIO stated on Sunday that Dortse, who claimed to be a resident of Mandi in Himachal Pradesh, clearly emerged as the mastermind of the racket that had set up a large number of shell companies across India with links to individuals or entities in China. The agency added that its investigations so far had revealed the possible involvement of the shell companies “in serious financial crimes detrimental to the financial security of the country”.

Dortse was involved in providing dummy directors on the boards of the shell companies, the investigation by the SFIO revealed. His citizenship status is also under investigation which already made it clear that he had links with China.

The Ministry of Corporate Affairs on Saturday assigned the SFIO to probe into the Jilian Consultants India Private Limited and 32 other companies.

Evidence procured during the enquiry by Registrar of Companies and the simultaneous search operations clearly pointed to dummy directors of several shell companies being paid by Jilian India Limited. The agency found boxes filled with company seals and digital signatures of dummy directors during simultaneous search and seizure operations by the SFIO at the offices of Jillian Consultants India Private Limited at Gurgaon, Fininty Private Limited in Bengaluru and Husys Consulting Limited in Hyderabad.

Indian employees were in touch with the Chinese counterparts through a Chinese instant messaging app. The Husys Consulting Limited was also found to be acting on behalf of Jilian Consultants India Private Limited and had a pact with Jilian Hong Kong Limited.

Dortse and a citizen of China were the two directors in Jilian Consultants India Private Limited. The SFIO received inputs that Dortse had fled from the National Capital Region to a remote place in Bihar and was attempting to escape India via road. A special team was constituted in SFIO and sent to Bihar. The SFIO team arrested Dortse on Saturday and later produced him in a local court which approved the agency’s plea for transit remand to bring him back to Delhi.

A probe by the ED into 18 FIRs registered by the Cyber Crime Police Station in Bengaluru earlier this month revealed that entities controlled or operated by Chinese citizens were involved in extortion and harassment of Indians, who had availed small amounts of loans through mobile apps run by them. The ED’s raids in Bengaluru on September 2 covered the premises of Razorpay Private Limited, Cashfree Payments, Paytm and other entities.