At least 1,000 individuals and companies have come under Securities and Exchange Board of India’s (Sebi) scanner for allegedly using stock markets to evade taxes and launder money through companies mostly existing on paper.
Sebi is focussing on securities market related violations by these individuals and companies, who have used trading in at least 25 listed companies to evade taxes and convert black money into ‘legitimate-looking’ funds, by creating fictitious gains or losses in the stock market.
The regulator is also looking into the use of derivatives trading by such entities, while it has asked other agencies including income-tax department, enforcement directorate and financial intelligence unit to further investigate the cases, sources said.
While investigation has reached advanced levels in the case of trading in these 25 listed companies, whose shares had shown extreme gains without any fundamental reasons, the regulator may also expand the scope of its probe and the number of such entities could grow much higher.
A large number of these 1,000 entities are actually related to those already facing action by Sebi or other regulators including in some major scams that have come to the fore in the recent past.
These include entities related to ‘cash for loan’ scam, being investigated by Central Bureau of Investigation, as also the NSEL default case that is being probed by multiple regulators and agencies, sources said.
Some of them could be top executives and promoters of various other listed companies.