While probing Edelweiss for forex reportings, Enforcement Directorate of India has busted a 700-crore rupees forex scam by a Mumbai-based Capstone Limited. Allegedly, the company routed foreign currency through shell companies based on forged and fudged passports and air tickets.
Crux of the Matter
ED Cracked the Trail Enforcement Directorate (ED) caught Capstone Forex Private Limited red-handed while it was probing Edelweiss’s books for an alleged forex scam. While ED was investigating Capstone Limited, it observed a spike in its revenue from INR 6 crore in FY 2015 to INR 315 crore in FY 2018. ED went through Capstone’s business practices and sources of revenue that produced that the company had received crores of revenue from various businesses from 2017 to 2019. On detailed examination, ED found that the company received money from shell companies based accounts of travel on fake passports and forged tickets. None of the shell companies that were probed by ED were able to provide a ‘legitimate reason’ for the forex transaction.
Big Names Involved Firms associated with Capstone Forex Scam are Indianapolls Hospitality owned by Juhi Chawla’s husband Jay Mehta, CG Power Solutions, Next gen Films, Consultshah Financial Services, Jain Energy, Navarkar Builders, Swatantryaveer V D Savarkar Multistate Cooperative Credit Society, Eros International, etc. Edelweiss Chairman Rashesh Shah clarified that Edelweiss had no such business with Capstone.
We strongly condemn the allegation and want to reassure the market, investors and stakeholders that Eros International Media Limited have not received any communication from ED and we have no business transactions with Capstone Forex. – Eros International
Curiopedia
A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or ships. Shell companies may be registered to the address of a company that provides a service setting up shell companies, and which may act as the agent for receipt of legal correspondence. The company may serve as a vehicle for business transactions without itself having any significant assets or operations. Sometimes, shell companies are used for tax evasion, tax avoidance, and money laundering, or to achieve a specific goal such as anonymity. More Info
Curated Coverage
Business Today – ED uncovers Rs 700 crore forex scam in probe against Capstone Forex
Times Now News – ED unearths multi-crore forex scam, Mumbai-based Capstone under lens
Money Control – ED busts little-known Mumbai-based firm behind Rs 700-crore forex scam
India Today – ED unearths massive foreign exchange scam worth Rs 700 crore
Comments