The income tax department on Tuesday launched a massive search operation on some Chinese individuals and their Indian associates and some bank employees spread across Delhi, Gurgaon and Ghaziabad for suspected links to money laundering and hawala transactions running into several thousand crores of rupees.

“Based on credible information that a few Chinese individuals and their Indian associates were involved in money laundering and hawala transactions through a series of shell entities, a search action was mounted at various premises of these Chinese entities, their close confederates and a couple of bank employees,” the I-T department said

Sources in the department said one Chinese individual named Charles Pang had been detained and was being questioned, while premises were searched across the three cities during the operation.

The latest action of the tax department the biggest so far against Chinese entities, is seen as part of the effort to monitor and restrict business dealings with the Chinese in the aftermath of the border standoff.

Sources did not disclose the identity of the Chinese companies and banks involved.

The statement said the search action found that at the behest of Chinese individuals, more than 40 bank accounts were created in various dummy entities, entering into credits of more than Rs 1,000 crore over the period.

It said a subsidiary of a Chinese company and its related concerns had taken over Rs 100 crore in bogus advances from shell entities for opening businesses of retail showrooms in India.

“Further, incriminating documents in respect of hawala transactions and laundering of money with active involvement of bank employees and chartered accountants have been found as a result of search action. Evidence of foreign hawala transactions involving Hong Kong and US dollars has also been unearthed. Further investigations are under progress,” the statement added.

Several actions have been unveiled by the government to cut off Chinese economic inroads in India and sources said plans are being readied to impose higher import duty on cameras, laptops and textiles as part of moves to restrict imports from China.

As part of action aimed against Chinese entities, consignments from China have been subject to tough scrutiny, leading to delay in clearing of consignments ranging from electronics to pharmaceuticals.

In April, the government amended the foreign direct investment policy to put a blanket ban on investments through the automatic route by entities from countries that share a border with India. The move was seen as an attempt to ward off the threat of “opportunistic” Chinese takeover of Indian companies, whose valuations have been hit hard by the coronavirus
pandemic.

Source : https://timesofindia.indiatimes.com/business/india-business/i-t-dept-searches-chinese-entities-over-laundering-hawala-deals/articleshow/77493751.cms