New Delhi: In a major crackdown on black money, the government is contemplating curb on institutional money laundering by shutting down lakhs of shell companies, a newspaper report has said.

As per a report in the Times of India, such "dormant companies, suspected to be anywhere between 6 to 7 lakh.”

The TOI report also said that many of these firms “had carried out high-value transactions and deposited huge amounts of cash in banks following the demonetisation of high-value currency notes”.

Shell companies are characterised by nominal paid-up capital, high reserves and surplus on account of receipt of high share premium, investment in unlisted companies, no dividend income and high cash in hand.

The government has “involved multiple agencies with the Central Board of Direct Taxes (CBDT) playing a key role,” TOI report said.

Government recently decided to take "harsh punitive" action, including freezing of their bank accounts used to launder money or evade taxes.

Following a review by the Prime Minister's Office, a task force with members from regulatory ministries and enforcement agencies has been constituted to monitor action against "deviant" shell companies.

While the Serious Fraud Investigation Office (SFIO) has filed cases against 49 shell companies, as much as Rs 3,900 crore have been laundered by 559 persons with the help of 54 professionals. Also, Rs 1,238 crore cash has been deposited in shell or dormant companies, post demonetisation.

A task force, headed by revenue and corporate affairs secretaries, with members from various regulatory ministries and enforcement agencies has been set up to monitor the actions taken against such deviant shell firms by various agencies.

The regulatory ministry concerned will ensure disciplinary actions are initiated against the professionals indulging in malpractices and abetting the entry operators of the shell companies.

It was decided at the meeting that appropriate "red flag" indicators will be used for identifying shell companies, and a database of such companies and their directors will be built by pulling in information from various agencies.

The database will also capture Aadhaar numbers of individual directors in the companies, the statement said.