CBI director seeks details of corporates routing money abroad

Tags: News
CBI Director Ranjit Sinha has written to Finance Ministry seeking details of all the cases from the Directorate of Revenue Intelligence (DRI) in which corporates have allegedly over invoiced their imports thereby causing losses to banks which extended loans to them.

Sinha has written to Secretaries of Banking and Revenue Department in the Finance Ministry, saying this model of over invoicing by a front company of a business group abroad is being largely misused by corporate groups to illegally route funds from abroad, official sources said.

The modus operandi highlighted by CBI says that while the corporate strikes a deal for imports with a company in one country, the billing is done at inflated prices in other country by the front company of the corporate group, they said.

This helps the group to take loan from banks against the inflated bill while the actual price paid to the exporter firm is much less.

The difference is pocketed by the corporate group which also manages to save on duties as such imports in some infrastructure related sectors do not have any import duties, the sources said.


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