In a significant revelation, Madhya Pradesh has found itself at the center of a Rs 600 crore benami share scam. This fraudulent activity involves a listed company manipulating black money to appear as legitimate income by exploiting the stock market.
What Is Benami Property?
Benami property refers to assets where the real owner hides behind a false name. Commonly used to convert undeclared income, these properties often include land, shares, and luxury items purchased using black money. The Madhya Pradesh case exemplifies this illegal practice, with the company purchasing shares under employees’ names.
The Rs 600 Crore Benami Share Scam
In this case, the company in question bought its own shares under the names of employees and close associates, with the funding provided by the company itself. These shares, valued at ₹600 crore, were later sold in the open market, where the company’s promoters repurchased them. This strategy turned black money into legitimate wealth, effectively bypassing scrutiny.
Crackdown Under the Benami Transactions Act
Introduced in 2016, the amended Benami Transactions (Prohibition) Act has empowered authorities to attach properties involved in such scams. So far, over 1,400 benami properties worth ₹900 crore have been attached in Madhya Pradesh alone. These include shares, land, and luxury assets discovered during income tax raids.
High-Profile Examples of Benami Properties
Prominent cases highlight the widespread use of benami transactions:
Luxury Cars: Rajesh Kesharwani, a businessman from Sagar, was found with seven expensive cars registered under others’ names.
Real Estate: Rajesh Sharma, owner of Trishul Construction Company, and ex-constable Saurabh Sharma were linked to several benami properties
Consequences for Violators
Those found guilty under the Benami Transactions Act face stringent penalties, including up to seven years of imprisonment and hefty fines.
Conclusion
The Madhya Pradesh Rs 600 crore benami share scam is a stark reminder of how black money infiltrates legitimate financial systems. With stricter enforcement of the Benami Transactions Act, authorities aim to curb such fraudulent practices and bring violators to justice.
By understanding the scope and mechanisms of benami transactions, the public and law enforcement can better identify and combat such financial crimes.
