Shell Companies In India: Insights From The Panama Papers Leak

Snehal Ekka, Christ (Deemed to be University), Lavasa Campus, Pune

ABSTRACT

Being a developing country, India has seen a large influx of new businesses into the corporate sector, which plays a significant role in the country's economy. In addition to domestic businesses, numerous international corporations have also made inroads into the Indian market. But while the number of businesses in the market rises, so do the instances of fraud and cheating In the wake of the Panama Paper leaks investigation, it has been revealed that Mossack Fonseca, a Panamanian law firm, established numerous shell and shadow companies worldwide to obscure questionable funds. Despite the presence of legislation such as the Companies Act 2013 and various SEBI regulations, fraudulent activities persist. Companies often exploit the corporate veil to evade accountability and scrutiny. This paper emphasizes the necessity of lifting corporate veil to identify shell companies and curb their existence. This paper, in light of the Panama Papers case, extensively examines shell companies, their consequences, and their regulatory needs. It defines shell companies, discusses their purposes, and explores whether they are solely utilized for unlawful activities. Additionally, it investigates the roles of shell companies in money laundering, tax evasion, funding terrorism, and other illicit activities, providing examples to illustrate these functions. This research highlights the urgency for regulation and scrutiny in order to combat the misuse of shell companies for illicit purposes.

Keywords: Shell companies, Panama Paper Leak, Case, Tax evasion, money laundering, illegal activities.