New Delhi, Apr 1 (Agencies) : In a major crack down on shell companies, the Enforcement Directorate (ED) on Saturday conducted searches against 300 such companies across 16 States.

The searches being conducted in Delhi, Mumbai, Chennai, Kolkata, Hyderabad and other places are part of the Central government's action against shell companies indulging in large-scale money laundering.

The ED has already booked several persons on charges of running shell companies for laundering unaccounted money. The agency had last month arrested two brothers in the national capital for running such entities.

Recently, on Prime Minister Narendra Modi's instructions, a task force under the co-chairmanship of the Revenue Secretary and Corporate Affairs Secretary had also been set up for stringent action against the shell companies.

As per government records, there are about 15 lakh registered companies in India, but only six lakh of them file their annual returns. It is suspected that a large number of these companies provide accommodation entries by raising fake inflated invoices to help the others evade tax.

They are also used to show share purchases at a premium for converting black money into white.

Investigations have revealed that ?1,238 crore in cash had been deposited in these entities during November-December last year, after demonetisation.

The Serious Fraud Investigation Office has also filed prosecutions against entry operators who ran 49 shell companies. About 560 ultimate beneficiaries had laundered ?3,900 crore.

The government will invoke the Benami Transactions (Prohibition) Amendment Act for harsh action against those involved.