By: Mahi Agrawal
INTRODUCTION
Corporate fraud has evolved in sophistication over the past few decades, with perpetrators increasingly exploiting gaps in regulation and enforcement. Among the most troubling manifestations of this evolution is the emergence of “phantom boards,” a corporate structure that exist almost entirely on paper. Phantom boards are typically composed of dummy or nominee directors who hold titles and sign documents but wield no actual decision-making powers. Their presence is merely ornamental. Studies show that these dummy or nominee directors operate entirely under the direction and control of third parties who conceal themselves behind the corporate veil.[1] Company records bear the names and signatures of the visible directors, yet the real decision-maker is an anonymous actor who designs and executes fraudulent schemes without any direct or traceable involvement. This dynamic allows the true beneficiaries of the fraud to operate in the shadows, while the nominal directors are left exposed as the only visible agents of the company.[2]
This arrangement poses a fundamental problem for criminal law. Under established legal principles, liability for most offences depends on proving that a person had the requisite mens rea. In the context of a phantom board, the individuals who appear to be in control, the dummy directors, rarely have knowledge or involvement in the wrongful acts.[3] They are simply pawns, often paid a small sum to lend their names and signatures to corporate documents. Meanwhile, the shadow controllers carefully insulate themselves from any evidence that could tie them to the company’s actions. Even when investigative agencies succeed in uncovering the shell company’s operations, they struggle to link criminal intent to those actually responsible.[4] The central challenge remains identifying the true controllers of phantom boards, rather than punishing the low-level dummy appointees.
India’s current legal and forensic framework has significant gaps when it comes to addressing this problem. Without clear mechanisms to pierce corporate anonymity or to attribute liability to the ultimate beneficiaries, the masterminds behind phantom boards often evade accountability. Investigators face formidable evidentiary hurdles, particularly when dummy directors insist that they were unaware of the company’s fraudulent activities. This difficulty is compounded by the ease with which signatures, often the main evidence of director approval, can be forged. Handwriting and signature experts point out that modern forgers can easily cut, crop, and paste digital signatures onto documents in what is known as transplantation forgery.[5] Digital signatures that exist only as images or PDFs are especially vulnerable because they are nothing more than pixels. Even handwritten signatures can be imitated, and their authenticity often requires detailed forensic comparison with verified exemplars. Such analysis is highly technical, time-consuming, and sometimes inconclusive, leaving investigators without definitive proof that a nominal director did or did not sign a disputed document.
This article examines the forensic difficulties of attributing mens rea to the true beneficiaries of shell companies and explores how India’s existing laws leave significant room for improvement. The next section provides the legal background, outlining how Indian courts have developed principles of corporate and director liability, and assessing how effectively Indian law can address the rise of phantom boards. The third section draws on prominent case studies to illustrate the practical functioning of phantom boards, the ways in which they escape liability, and the difficulties in managing them. The fourth section is dedicated to identifying the forensic and evidentiary challenges in prosecuting phantom boards in the Indian context. The fifth section sets out structured legislative, technical, and institutional reforms that are essential to combat their growing prevalence.
LEGAL BACKGROUND
Indian courts have long grappled with the question of corporate criminal liability. Historically, corporations were thought incapable of possessing mens rea because they lacked a “mind” of their own. This view has been decisively rejected by the Supreme Court of India. In Standard Chartered Bank v. Directorate of Enforcement (2005), the Court affirmed that companies can be prosecuted and punished for criminal offences even where mandatory imprisonment is prescribed, observing that courts may impose the fine component where imprisonment cannot be enforced against a juristic person, and that corporations cannot claim immunity from criminal prosecution on this basis alone.[6] Similarly, in Iridium India Telecom Ltd. v. Motorola (2011), the Court held that a corporation is “virtually in the same position as any individual” and may be criminally prosecuted if those in control of its affairs had the requisite intent.[7] These decisions reflect a modern understanding of corporate liability, but they do not, by themselves, solve the problem of attributing criminal intent to the shadow controllers behind the boards.
The courts have also been clear that individual directors cannot be held criminally liable merely because of their titles. In Sunil Bharti Mittal v. CBI (2015), the Supreme Court reiterated that, absent a statutory provision for vicarious liability, a director can only be charged if there is evidence of their active role coupled with criminal intent.[8] More recently, in Sanjay Dutt v. State of Haryana (2025), the Court underscored that Indian law does not contain any general presumption of vicarious liability.[9] It held that in the absence of any statutory provision, a director of a company cannot be held vicariously liable for the company’s offences. The court also emphasised that there is no presumption that every officer of a company is aware of every transaction. To sustain charges, prosecutors must allege and prove specific personal involvement. This approach is consistent with India’s common-law roots, particularly the principle laid down in Salomon v. Salomon (1897) that a company has a separate legal personality.[10]
Yet, the rise of phantom boards represents a serious challenge to the enforcement of corporate criminal law in India. The Companies Act, 2013 does attempt to close the gap, through the Significant Beneficial Ownership (‘SBO’) framework under Section 90, the expansive definition of “officer in default” in Section 2(60), and broad anti-fraud provisions like Section 447. Courts, too, have consistently pierced the corporate veil to hold shadow controllers accountable.[11] However, enforcement still struggles against the realities of dummy directorships: the attribution of liability depends on meeting strict evidentiary thresholds, and sophisticated concealment strategies often frustrate regulatory scrutiny. Investigative bodies such as the Serious Fraud Investigation Office (‘SFIO’) are armed with substantial forensic powers, and statutes like the Negotiable Instruments Act extend vicarious liability, yet the persistence of phantom boards underscores the gap between legal intent and practical enforcement. Ultimately, while the legislative framework is not deficient, evidentiary hurdles and enforcement constraints continue to insulate the true architects of corporate fraud.
UNDERSTANDING THE ANATOMY OF PHANTOM BOARDS THROUGH CASE STUDIES
Phantom boards operate by exploiting anonymity and projecting an outward appearance of legitimacy. They are most often tied to shell or “shelf” companies that have little or no real business operations. These entities are typically incorporated with minimal capital and skeletal governance, making them ideal vehicles for those seeking to obscure the true beneficiaries of assets or income. Scholars have long noted this function.[12] As early as 1937, a letter from the U.S. Under Secretary of State to President Roosevelt noted that criminals frequently established shell companies with dummy incorporators and dummy directors, so that the names of the real parties in interest do not appear.[13] Contemporary studies across jurisdictions continue to highlight how such entities are deliberately designed to conceal connections between individuals and financial transactions.[14]
The pattern is particularly evident in India. Investigations consistently show that directors of phantom board are usually nominal appointees, with little education or financial means.[15] A detailed forensic analysis of Indian shell companies explains that such individuals do not have any stakes involved, either in the form of investment or otherwise, and that they habitually act under instructions from unseen controllers.[16] They are compensated modestly, often in cash, and called upon only when documents require their signatures.
The 2022 Unitech group investigation offers a telling example, which uncovered at least 52 shell companies controlled by the company’s promoters through loyal associates and dummy directors. The directors later admitted that they were paid monthly sums, often between INR 10,000 and INR 20,000, to sign documents on demand.[17] These signatures appeared on board resolutions, contracts, and financial statements, giving the illusion of governance while concealing the true decision-makers. The promoters channeled vast sums though these companies using complex inter-company loans and foreign transactions.[18] While investigators were eventually able to establish large-scale misappropriation of real-estate investments, proving the mens rea of the hidden controllers required painstaking reconstruction of these layered transactions.
A recurring tactic is the use of layered corporate arrangements.[19] Fraudsters deploy multiple shell entities in chains so that funds move rapidly across accounts while leaving behind minimal balances. This is a hallmark of money-laundering schemes and often involves shelf companies spread across jurisdictions or Indian states to suggest a diversified business presence.[20] Forensic examinations frequently reveal that while a company may be registered at a particular address, its banking and operational activities occur elsewhere.[21] Local nominees are also recruited as directors, making it harder for regulators to trace controllers across regions.
Recent enforcement actions highlight the scale of the problem. In 2025, the Enforcement Directorate (‘ED’) raided three shell companies, namely, Kindent, Rainet, and Mool in Uttar Pradesh.[22] These firms were ostensibly engaged in IT services, domestic money transfers, and bill payment solutions. In reality, they were fronts for the multi-crore QFX forex investment scam. ED officials froze 116 bank accounts associated with these entities, restraining over INR 103 crore across 16 of them, but prosecuting the true masterminds remains an ongoing challenge.[23] The investigation has required extensive forensic banking analyses to trace funds through layers of accounts and entities.
The OctaFX case from the same year demonstrates a similar pattern.[24] The cryptocurrency trading platform allegedly laundered over INR 800 crore by routing investor funds through more than thirty dummy e-commerce websites across India. These entities obtained bank accounts using locals’ identification documents, submitted under fraudulent pretenses, making it possible to obscure illicit transactions across multiple layers of corporate control.
These cases demonstrate how phantom boards enable frauds across different sectors. In the Unitech saga, significant criminal activity was ultimately established, but attributing intent to the concealed promoters required tracing a web of inter-company loans, offshore transfers, and real-estate transactions. In the QFX forex scam, dummy directors admitted to playing no role in decision-making, reinforcing the narrative that they were pawns rather than the participants. Similarly, cryptocurrency and foreign exchange scams uncovered by the ED often feature networks of shell companies used to channel illicit funds under the guise of legitimate concerns.
The global nature of phantom boards provides further evidence of the pervasive use of phantom boards. Leaks such as the Panama Papers have demonstrated the extensive use of shell companies and nominee directors by wealthy individuals worldwide to launder money and evade taxes.[25] Many of these arrangements mirror those found in India, using local intermediaries to provide a veneer of legitimacy while insulating the true controllers from scrutiny. International regulators have responded by creating beneficial-ownership registries or strengthening existing ones. The European Union’s proposed “Unshell” directive, for example, seeks to identify entities functioning primarily as shells and compel them to disclose their ultimate owners.[26]
India, by contrast, has yet to adopt comprehensive measures to expose phantom controllers. Despite recognition that company law is essential to financial-system transparency, current regulations impose minimal due diligence as the point of director onboarding. There is no systematic mechanism to verify whether an appointed director is genuinely independent or acting as a proxy. This gap has been repeatedly exploited in large-scale frauds, as seen is cases linked to Chinese-controlled shells in 2022.[27] In that instance, investigators discovered dozens of companies with nominal Indian directors, often individuals paid to lend their names and digital signatures to shell structures, serving as front for laundering operations.
The reliance on dummy directors is not merely a procedural inconvenience. It is a core tactic that allows phantom boards to evade accountability. All formal record, including board resolutions, statutory filings, and banking documents, appear regular on their face because they bear the proper signatures. Yet those signatures often come from individuals who have no understanding of the transactions they are authorizing. Prosecutors must therefore rely on circumstantial evidence, digital forensics, and financial-trail analysis to build cases that can withstand judicial scrutiny.[28]
These realities show why phantom boards remain so resilient. They thrive in environments where corporate structures can be established quickly and with little oversight, and where enforcement agencies must meet a high evidentiary threshold to pierce the corporate veil.[29] The examples of the QFX forex scam, the OctaFX laundering network, and the Unitech case all demonstrate how these boards can facilitate massive fraud while shielding the ultimate beneficiaries from exposure. In each matter, investigators succeed in freezing assets and identifying dummy directors but holding the true architects accountable remains a formidable challenge.
Without new tools and legal provisions that directly target the individuals behind phantom boards, major frauds will continue to test the limits of India’s enforcement capabilities. The next section details the forensic and evidentiary hurdles that make such prosecutions especially difficult.
FORENSIC AND EVIDENTIARY HURDLES IN PHANTOM BOARD PROSECUTIONS
Tracing and proving a phantom board’s scheme are not just a matter of piecing together company records. It requires highly specialized forensic expertise, and even then, investigators face several serious evidentiary hurdles.[30] Each step, whether it involves documents, digital evidence, or corporate filings, presents its own uncertainties, giving phantom directors and their hidden controllers ample room to evade accountability.
The starting point of any investigation into phantom boards is often paperwork: contracts, minutes of meetings, share transfer forms, or invoices bearing the signatures of listed directors.[31] Yet, this trail is notoriously unreliable. As mentioned previously, dummy directors sign on documents without understanding them, or worse, their signatures are fabricated altogether. Handwriting experts emphasize that even traditional signatures are not foolproof markers of authenticity. Variations in pressure, strokes, and angles are subtle and can only be reliably detected by experts comparing a contested signature with verified exemplars.[32] This process is not only painstaking but often inconclusive, especially if the sample size is small or if the signatures themselves were hurriedly written.
Against this backdrop, firstly, digital signatures pose the sharpest problem. Unlike physical handwriting, which leaves behind forensic markers, a digital signature on a PDF or scanned documents is nothing more than pixels. This means an apparently valid digital document could be entirely fabricated, with no obvious way for a layperson, or even a preliminary review, to detect tampering. Establishing authenticity then requires technical imaging and metadata analysis, but even those methods are not always sufficient if a skilled forger has erased traced of editing.[33] In short, documents alone are unreliable evidence for proving a phantom board’s decision or tracing its true controllers.
In modern fraud cases, investigators rely heavily on electronic evidence, including emails that show instructions from shadow controllers, spreadsheets tracking transactions, or server logs revealing access patterns. However, under the erstwhile Indian Evidence Act, 1872, the admissibility of such material was subject to stringent conditions. Section 65B required that any electronic record submitted as secondary evidence be accompanied by a certificate issued by the person responsible for the device that generated it.[34] This certificate must detail how the record was produced, the process followed and confirm that the data is accurate and unaltered. The revised law, namely Section 63 of the Bharatiya Sakshya Adhiniyam, 2023 (‘BSA’), mirrors the same requirement.[35] The Supreme Court has repeatedly clarified that this requirement is mandatory.[36] Without a valid certificate, digital evidence is inadmissible, regardless of how incriminating it might appear.
Secondly, in practice, this creates enormous obstacles for investigators in phantom board cases. Often, the “custodian” of the device or server is the very company under investigation. Expecting cooperation from dummy directors or their corporate service providers is unrealistic. Cross-border cases add another layer of difficulty: servers may be located in jurisdictions that either refuse to cooperate or impose lengthy bureaucratic hurdles. As a result, valuable leads, like an email chain linking dummy directors to a controlling mastermind, may be useless in court if the procedural certificate is missing.[37] This strict admissibility has a chilling effect. Prosecutors may hesitate to rely on digital trails if they fear the evidence will later be struck down. Defense counsel, aware of this vulnerability, routinely challenge electronic record on procedural grounds, prolonging trials and casting doubt even when the factual trail is clear.[38]
Thirdly, even when investigators succeed in obtaining audio or video records, another obstacle emerges: authenticity in the age of artificial intelligence. Deepfake technology allows the creation of highly convincing synthetic recordings, including videos showing people in meetings that never occurred, or audio clips of conversations that never took place.[39] Generating such content is becoming increasingly accessible. With a few minutes of sample footage, it is now possible to fabricate a video that can deceive even trained observers.[40]
For courts, this poses a serious dilemma.[41] On one hand, recordings can be critical evidence in demonstrating how phantom boards operate. A video of a board meeting, or an audio call where instructions are dictated, could directly implicate controllers. One the other hand, the defense can always claim that such recordings are fabricated deepfakes. Courts, aware of the risk, have begun insisting on strict forensic protocols to verify authenticity.[42] But these protocols are technically complex and resource-intensive, requiring tools and expertise that investigative agencies may not always possess.[43] Trials, therefore, become drawn-out battles of expert testimony, with one side claiming authenticity and other suggesting manipulation. The result is greater uncertainty and delay, often to the advantage of phantom controllers.
Fourthly, even beyond evidence of specific acts, the broader ecosystem of corporate record created further challenges. The Registrar of Companies (‘ROC’) has historically relied heavily on self-declaration.[44] Until recent reforms, directors could be listed with minimal verification, including foreign nationals or fictitious addressees.[45] Forensic audits of shell networks often reveal registered addresses that are little more than empty office spaces, shared desks, or postal boxes. When investigators attempt to locate listed directors, they frequently find intermediaries, untraceable individuals, or people who deny knowledge of the company’s operations.[46] This weakness means that the very foundation of corporate records are shaky. Without reliable verification of director identities and addresses, investigators cannot be sure of whether a paper trail reflects genuine transactions or an elaborate façade.
Moreover, India’s regulatory framework remains fragmented. The Companies Act, the Foreign Exchange Management Act (‘FEMA’), and the Prevention of Money Laundering Act (‘PMLA’) all apply, but each maintains separate reporting systems. There is no single consolidated database of ultimate beneficial owners. The lack of seamless inter-agency cooperation, thus, complicates matters. While agencies can freeze assets or summon individuals, building the full picture of a phantom board’s control structure requires access to cross-border financial flows, often routed through multiple jurisdictions.[47] With limited data-sharing agreements and the transnational nature of many shell networks, evidence gathering becomes slow and fragmented. By the time one set of records in verified, assets may have been removed elsewhere, leaving investigators perpetually behind.
Ultimately, the greatest hurdle is not proving that irregularities occurred, but proving intent, the mens rea, on the part of phantom controllers. Dummy directors often claim ignorance, portraying themselves as mere signatories without awareness of the larger scheme. Without concrete evidence such as seized photos, incriminating emails, or whistleblower testimony, prosecutors struggle to demonstrate that the hidden beneficiaries deliberately orchestrated fraud.[48] As a result, many phantom board cases collapse not because wrongdoing is absent, but because courts demand proof beyond reasonable doubt that links specific individuals to fraudulent intent.[49] In a system where evidence is fragile, contested, and often legally inadmissible, meeting that standard is daunting.
To summarize, the forensic and evidentiary challenges of investigating phantom boards are formidable. Documents are easily forged or transplanted, electronic evidence, though abundant, faces strict admissibility barriers, deepfakes introduce new doubts into audio and video records, and company registries are riddled with inaccuracies, and fragmented regulation hampers unified tracing of beneficiaries. Against this backdrop, proving fraudulent intent becomes almost impossible without extraordinary investigative breakthroughs. Unless reforms strengthen verification, data-sharing, and forensic capacity, phantom boards will continue to exploit these gaps. The next section offers targeted reform proposals to address this situation.
PATHWAYS TO REFORM
Tackling phantom boards requires a reform strategy that blends law, technology, and institutions. The problem is not only that fraudsters exploit gaps in current frameworks, but also that enforcement agencies lack the legal and technological tools to bring controllers to account. A targeted reform agenda must therefore create transparency in ownership, make evidence collection workable, and empower investigators to act decisively.
Firstly, legislative reforms are essential. The Companies Act should be strengthened by inserting clear definitions of “shadow directors” and by prescribing penalties for those who knowingly furnish dummy directors. Such clarity would prevent nominal figures from being used as shields against liability. A broader corporate-fraud law, as experts have suggested, could introduce statutory “constructive liability” for conspirators, akin to Section 61 of the Bharatiya Nyaya Sanhita, which criminalises conspiracy to commit serious offences.[50] This would bring hidden controllers within the net even when they avoid formal designation.
Beneficial-ownership disclosure is another priority. The EU’s now-abandoned “Unshell” framework, withdrawn by the EU Council in June 2025, sought to identify entities functioning primarily as shells through substance indicators, while the US Corporate Transparency Act obliges corporations and LLCs to disclose both owners and company applicants to a federal registry.[51] India could draw from these models by expanding the MCA21 registry into a unified beneficial-ownership register, beginning with a 25 percent disclosure threshold and inter-agency access, and gradually moving towards lower thresholds in high-risk sectors.[52] Unlike the U.S., India should incorporate verification mechanisms through PAN/Aadhaar authentication and cross-checking with regulatory databases, while also providing simplified compliance pathways for MSMEs. To balance transparency with privacy, the registry could adopt a phased approach, starting as inter-agency only and later considering limited public access, ensuring that hidden controllers are unmasked without creating undue compliance or constitutional challenges.
Alongside this, the evidentiary framework should be revisited.[53] At present, Section 63 of the BSA impose strict certification requirements that often block use of electronic records. Narrow carve-outs allowing government-generated record or regulator-maintained digital trails to be admissible without certificates would go a long way toward enabling prosecutions.
Secondly, technological measures must complement legislation. Sophisticated fraud cannot be countered without sophisticated tools. Agencies need to invest in AI and machine-learning systems capable of mining corporate and financial datasets for red flags, for instance, clusters of companies with the same address, repeated use of common minor shareholders, or identical directors appearing across multiple shells.[54] Strengthening biometric KYC for directors and significant shareholders, tied directly to Aadhar, would reduce the risk of fictious identities.[55] The centralized digital “director ID” system can be expanded so that every filing, tax return, and corporate document is linked to a verifiable biometric or digital signature. This would make transplantation forgery or false filings far harder to sustain.[56]
Moreover, blockchain based registries for shares or mortgages could provide tamper-evident records, ensuring that once registered, ownership or encumbrance details cannot secretly be altered.[57] Cross-agency data integration is equally vital.[58] Linking MCA, GST, direct tax, and passport databases would expose the layered disguises often used by controllers of phantom boards.
Thirdly, institutional improvements are necessary to make reforms bite. Specialized investigation units should be developed with agencies like Serious Fraud Investigation Office, Central Bureau of Investigation, ED, and tax authorities, equipped with advanced forensic accounting and cyber-investigation training. Joint task forces, modeled on the Financial Intelligence Unit (‘FIU’) or the ED’s crypto wing, could be mandated to tackle cases involving shells and digital assets simultaneously.[59] Strengthening FIU-IND and formalizing cooperation with international financial intelligence units would improve tracing of cross-border fund-flows, which is a hallmark of phantom board framework.[60]
Capacity-building for the judiciary is equally important. Prosecutors and judges need training to recognize how phantom boards operate, so that charges are not dismissed merely because a “director on paper” appears compliant.[61] Demanding detailed forensic and financial linkages rather than relying solely on director titles would raise the prosecutorial standard while still keeping controllers accountable.
Lastly, procedural protocols should be standardized. At present, much depends on ad hoc investigations. Clear protocols could mandate immediate preservation of emails and server logs once shell-company fraud is suspected, along with advance warrants for securing Section 63 (BSA) certificates at the earliest stage. Forensic audit guidelines specific to suspected phantom structures would give investigators a roadmap rather than leaving them to improvise.[62]
Incentives for cooperation could also be formalized. Plea or cooperation deals with dummy directors, who are often minor players, would allow investigators to trace instructions back to controllers. Equally, whistleblower and witness-protection schemes focused on corporate crimes informants could encourage disclosures from insiders without fear of reprisal.[63]
These reforms are not speculative, global examples demonstrate their effectiveness. The above-mentioned approaches adopted by the EU (Unshell directive) and the US (US Corporate Transparency Act) illustrate how transparency measures can close loopholes that phantom boards exploit.[64] India can adapt such models to its own context: making director identities and beneficial ownership fully transparent to regulators, mandating verifiable electronic signatures on corporate filing, and harmonizing agency databases. In combination, these steps would build a system where incorporation is no longer an easy cloak for deception. Fraudsters would face disclosure requirements that unmask beneficial owners, biometric verification that prevents fictitious directors, forensic protocols that secure admissible evidence, and institutional capacity that ensures meaningful investigation. Without such a coordinated reform agenda, phantom boards will remain able to operate behind dummy directors, exploiting legal and technical gaps with near impunity.
CONCLUSION
Phantom boards represent one of the most sophisticated tools for fraud in contemporary corporate practice. By masking true controllers behind dummy directors and shell structures, they exploit the limits of India’s liability doctrines and evidentiary rules. While courts have consistently upheld that companies themselves can be liable for fraud, they require direct and often unattainable proof to link hidden promoters to criminal intent. This gap allows the actual masterminds of large-scale scams to remain shielded, while enforcement actions frequently stop at freezing accounts or charging nominal directors.
The analysis in this paper has shown how these arrangements function in practice, drawing from recent enforcement cases where investigators traced vast networks of shells but struggled to establish mens rea against the true beneficiaries. It has also highlighted why existing evidentiary requirements, particularly the insistence on certificates for electronic records and the strict admissibility rules under Section 63 of the BSA make prosecution heavily dependent on technical compliance rather than substantive truth. These challenges are compounded by digital deception techniques, inaccurate registries, and fragmented oversight.
Addressing these issues requires deliberate reforms that strengthen beneficial-ownership disclosure, reduce evidentiary barriers for digital records, and equip institutions with forensic and technological capacity. These measures are aligned with approaches already being implemented in other jurisdictions and resonate with India’s own calls for corporate transparency. Unless these reforms are prioritized, phantom boards will remain a persistent blind spot, undermining accountability and eroding trust in corporate regulation.
[1] Dharmvir Singh, ‘Incorporating with Fraudulent Intentions: A Study of Various Differentiating Attributes of Shell Companies in India’ (2010) 17 J of Financial Crime 459, doi:10.1108/13590791011082805.
[2] The Art of Deception: How Dummy Directors Enable Deceptive Practices (FasterCapital, updated 11 April 2025) https://fastercapital.com/content/The-Art-of-Deception–How-Dummy-Directors-Enable-Deceptive-Practices.html#Common-Strategies-Utilized-by-Companies-with-Dummy-Directors.html accessed 18 August 2025.
[3] D Nielson and J Sharman, Signatures for Sale: How Nominee Services for Shell Companies Are Abused to Conceal Beneficial Owners (Stolen Asset Recovery Initiative, World Bank Group 2022) https://openknowledge.worldbank.org/handle/10986/37335?locale-attribute=es accessed 12 May 2022.
[4] See Aditi Jhunjhunwala and Prachi Narayan, ‘Criminal Liability of Corporate Officers – Supreme Court Takes a Negative View’ (Vinod Kothari & Company, 27 January 2015) https://vinodkothari.com/wp-content/uploads/2017/03/Corporate_criminal_laibility_of_officers_SC_takes_a_negative_view.pdf accessed 18 August 2025.
[5] Manoj Sharma, ‘Decoding the Mystery behind Handwriting: How Experts Are Coping in the Digital Age’ (Hindustan Times, 1 May 2017) https://www.hindustantimes.com/delhi/decoding-the-mystery-behind-handwriting-how-experts-are-coping-in-digital-age/story-MXgOtDVUBkbSnMcEHtlCHJ.html accessed 18 August 2025.
[6] Standard Chartered Bank v Directorate of Enforcement (2005) 4 SCC 530.
[7] Iridium India Telecom Ltd v Motorola Inc (2011) 1 SCC 74.
[8] Sunil Bharti Mittal v Central Bureau of Investigation (2015) 4 SCC 609.
[9] Sanjay Dutt v State of Haryana 2025 INSC 34.
[10] Salomon v A Salomon & Co Ltd [1897] AC 22 (HL).
[11] See Delhi Development Authority v. Skipper Construction Co. (P) Ltd. (1996) 6 SCC 619; Life Insurance Corporation of India v. Escorts Ltd. & Ors. (1986) 1 SCC 264; State of U.P. v. Renusagar Power Co. Ltd. (1988) 4 SCC 59; Balwant Rai Saluja v. Air India Ltd. (2014) 9 SCC 407; Indian Council for Enviro-Legal Action v. Union of India (1996) 3 SCC 212; Ajay Gupta & Anr. v. Amit Sales Corporation Pvt. Ltd. & Anr. (2025) DHC 5219.
[12] See Talmai P Morgan, ‘Report on the Misuse of Corporate Vehicles’ (2002) 10 J of Financial Crime 133, doi:10.1108/13590790310808691.
[13] Foreign Relations of the United States: Diplomatic Papers, 1937, General, vol 1 740.00/184, The Under Secretary of State (Welles) to President Roosevelt (Washington, 27 May 1937).
[14] See JC Sharman, The Money Laundry: Regulating Criminal Finance in the Global Economy (Cornell University Press 2011; online edn, Cornell Scholarship Online, 18 August 2016) https://doi.org/10.7591/cornell/9780801450181.001.0001 accessed 18 August 2025.
[15] ‘Dummy Directors: ROC Files Complaint’ Times of India (Ahmedabad, 9 January 2022) https://timesofindia.indiatimes.com/city/ahmedabad/dummy-directors-roc-files-complaint/articleshow/88783492.cms accessed 18 August 2025.
[16] ‘ED attaches “benami” entities in Unitech group PMLA case’ Economic Times (New Delhi, 13 November 2021) https://economictimes.indiatimes.com/news/india/ed-attaches-benami-entities-in-unitech-group-pmla-case/articleshow/87679532.cms accessed 18 August 2025.
[17] Raghav Ohri, ‘52 Shell Companies Helped Unitech Promoters Launder Money, Say ED Insiders’ Economic Times (New Delhi, 8 December 2021) https://economictimes.indiatimes.com/news/india/52-shell-companies-helped-unitech-promoters-launder-money/articleshow/88154821.cms?from=mdr accessed 18 August 2025.
[18] Directorate of Enforcement, Press Release, ‘ED has provisionally attached 40 % share of the hotel project “Garden’s Galleria”, Noida, owned by Unitech/M/s Ranchero Services Ltd (Cyprus)’ (Press Release, 26 November 2022) https://enforcementdirectorate.gov.in/sites/default/files/latestnews/Press%20Release%20Unitech%20Hotels.pdf accessed 18 August 2025.
[19] DK Luna, GK Palshikar, M Apte and A Bhattacharya, ‘Finding Shell Company Accounts Using Anomaly Detection’ in Proceedings of the ACM India Joint International Conference on Data Science and Management of Data (ACM 2018) 167.
[20] See G Elaine Wood and Niall Murphy, ‘The Role of Forensics in Anti-Money Laundering Investigations’ (Global Investigations Review Guide to Anti-Money Laundering, third edn, 27 May 2025) https://globalinvestigationsreview.com/guide/the-guide-anti-money-laundering/third-edition/article/the-role-of-forensics-in-anti-money-laundering-investigations accessed 18 August 2025.
[21] ibid.
[22] Press Information Bureau (Directorate of Enforcement), Press Release (16 July 2025) https://enforcementdirectorate.gov.in/sites/default/files/latestnews/Press%20Release-Post%20verification%20from%20banks-16.7.2025%204.pdf accessed 18 August 2025.
[23] Directorate of Enforcement, Press Release (7 July 2025) https://enforcementdirectorate.gov.in/sites/default/files/latestnews/PRESS%20Release-Search-QFX-YFX%20-7.7.2025%202.pdf accessed 18 August 2025.
[24] Directorate of Enforcement, Press Release (16 July 2025) https://enforcementdirectorate.gov.in/sites/default/files/latestnews/Press%20Release-Post%20verification%20from%20banks-16.7.2025%204.pdf accessed 18 August 2025.
[25] Nicholas Vail, ‘Cracking Shells: The Panama Papers & Looking to the European Union’s Anti-Money Laundering Directive as a Framework for Implementing a Multilateral Agreement to Combat the Harmful Effects of Shell Companies’ (2018) 5 Texas A&M Law Review 133 https://doi.org/10.37419/LR.V5.I1.4.
[26] Pieter Baert, ‘“Unshell”: Rules to Prevent the Misuse of Shell Entities for Tax Purposes’ (European Parliamentary Research Service Briefing, July 2024) https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/733648/EPRS_BRI%282022%29733648_EN.pdf accessed 18 August 2025.
[27] Press Information Bureau, ‘MCA Crackdown on Chinese Shell Companies in India – SFIO Arrests Mastermind & Chief Plotter’ (Press Release, Delhi, 11 September 2022) https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1858389 accessed 18 August 2025.
[28] See Rashmi Mandayam, ‘The Role of Digital Forensics in Corporate Fraud Investigations’ (2024) 12(6) International Journal of Innovative Research in Management, Physical Sciences & Engineering 1 https://www.ijirmps.org/papers/ijirmps2406231752.pdf accessed 18 August 2025.
[29] José-de-Jesús Rocha-Salazar, María-Jesús Segovia-Vargas and María-del-Mar Camacho-Miñano, ‘Detection of shell companies in financial institutions using dynamic social network’ (2022) 207 Expert Systems with Applications 117981 https://doi.org/10.1016/j.eswa.2022.117981.
[30] Vyshnavi Epari, ‘Shell Companies and Corporate Frauds: Legal Loopholes and Regulatory Response in India’ (2025) 27(5) IOSR Journal of Business and Management 7 https://www.ijirmps.org/papers/2024/6/231752.pdf.
[31] Association of Certified Fraud Examiners, ‘Shell Companies’ (ACFE Fraud Resources) https://www.acfe.com/fraud-resources/shell-companies accessed 18 August 2025.
[32] Sharma (n 5).
[33] Lokjithkirthik Viswanathan, ‘Forged Signatures: Detection, Legal Risks & Prevention’ (Certinal Blog, 18 February 2025) https://www.certinal.com/blog/forged-signatures accessed 18 August 2025.
[34] Indian Evidence Act 1872, s 65B.
[35] Bharatiya Sakshya Adhiniyam 2023, s 63.
[36] See Chandrabhan Sudam Sanap v The State of Maharashtra 2025 SCC Online SC 174; Arjun Panditrao Khotkar v Kailash Kushanrao Gorantyal and Others 2020 INSC 453; Sundar @ Sundarrajan v State by Inspector of Police 2023 INSC 264.
[37] ibid.
[38] ‘Title of the Article’ (2016) 24(3) International Journal of Law and Information Technology 229 https://doi.org/10.1093/ijlit/eaw005.
[39] Leo S F Lin, ‘Examining the Role of Deepfake Technology in Organized Fraud: Legal, Security, and Governance Challenges’ (2025) 4 Frontiers in Law 6-17.
[40] ibid.
[41] ‘The “Deepfake Defense”: An Evidentiary Conundrum’ (Judges Journal, ABA Technology Journal, 11 June 2024) https://www.americanbar.org/groups/judicial/publications/judges_journal/2024/spring/deepfake-defense-evidentiary-conundrum/ accessed 18 August 2025.
[42] See George Bellas, ‘Deepfakes in the Courtroom: Problems and Solutions’ (Bench & Bar, Illinois State Bar Association, March 2025, vol 55, no 5) https://www.isba.org/sections/bench/newsletter/2025/03/deepfakesinthecourtroomproblemsandsolutions accessed 18 August 2025.
[43] Rajat Sharma, Mukul Bhatnagar and Ercan Ozen, ‘The Role of Intellectual Capital in Combatting Deepfake Threats to Corporate Reputation and Trust’ in Mastering Deepfake Technology: Strategies for Ethical Management and Security (1st edn, River Publishers 2025) 11.
[44] See ‘What is ROC Filing & Why It’s Necessary?’ (Razorpay Rize blog, 15 April 2025) https://razorpay.com/rize/blogs/what-is-roc-filing accessed 18 August 2025.
[45] Companies (Appointment and Qualification of Directors) (Amendment) Rules, 2024, G.S.R. 412(E), dated 16 July 2024, (India) (in force from 1 August 2024).
[46] Nielson and Sharman, Signatures for Sale (n 3).
[47] See Council of the Inspectors General on Integrity and Efficiency, ‘Cross-agency data analytics can prevent fraud in government programs’ (GovDelivery bulletin, 15 May 2025) https://content.govdelivery.com/accounts/USCIGIE/bulletins/3df6f71 accessed 18 August 2025.
[48] Samuel W Buell, ‘The Limits of Individual Prosecutions in Deterring Corporate Fraud’ (Harvard Law School Forum on Corporate Governance blog, 24 April 2024) https://corpgov.law.harvard.edu/2024/04/24/the-limits-of-individual-prosecutions-in-deterring-corporate-fraud/ accessed 18 August 2025.
[49] See Gregory M Gilchrist, ‘Individual Accountability for Corporate Crime’ (2018) 34 Georgia State University Law Review 335 https://readingroom.law.gsu.edu/gsulr/vol34/iss2/2 accessed 18 August 2025.
[50] Bharatiya Nyay Samhita 2023, s 61(2).
[51] European Commission, ‘Unshell Proposal’ (European Commission, 22 December 2021) https://taxation-customs.ec.europa.eu/taxation/business-taxation/unshell-proposal_en accessed 18 August 2025; Corporate Transparency Act, H.R. 6395, 116th Cong, § 5336 (2020).
[52] Xerxes Antia and Sheel Ghia, ‘MCA’s Intensified Scrutiny on Significant Beneficial Ownership: A Wake-Up Call for Indian Companies’ (BTG Advaya, 18 July 2024) https://www.btgadvaya.com/post/mca-s-intensified-scrutiny-on-significant-beneficial-ownership-a-wake-up-call-for-indian-companies accessed 18 August 2025.
[53] See Prithwish Ganguli, ‘Admissibility of Digital Evidence under Bharatiya Sakshya Sanhita: A Comparative Study with the Indian Evidence Act’ (SSRN, 6 October 2024) https://ssrn.com/abstract=4977238 accessed 18 August 2025.
[54] Luis A García-Segura, ‘The role of artificial intelligence in preventing corporate crime’ (2024) 5 Journal of Economic Criminology 100091 https://doi.org/10.1016/j.jeconc.2024.100091.
[55] BB Allred, MG Findley, D Nielson and JC Sharman, ‘Anonymous Shell Companies: A Global Audit Study and Field Experiment in 176 Countries’ (2017) 48 Journal of International Business Studies 596.
[56] Mitchell Landrigan, Stephen Wilson and Hamish Fraser, ‘Why Are There So Many Digital Identities?’ (2023) Law, Technology and Humans https://doi.org/10.5204/lthj.3096 accessed 18 August 2025.
[57] See Devansh Bansal, ‘Combating Fraud Through Blockchain Immutability: The Ultimate Guide’ (Damco Solutions blog, 24 July 2025) https://www.damcogroup.com/blogs/blockchain-immutability-for-combating-fraud accessed 18 August 2025.
[58] See Kathryn Westmore, Simon Miller, Jonathan Frost and Diana Foltean, Enabling Cross-Sector Data-Sharing to Better Prevent and Detect Scams (RUSI Conference Report, September 2022, Royal United Services Institute for Defence and Security Studies) https://static.rusi.org/347_CR_Preventing_Scams_proof%20final.pdf accessed 18 August 2025.
[59] Financial Intelligence Unit–India, Annual Report 2020–21 (Ministry of Finance, Government of India 2021) 31 https://fiuindia.gov.in/pdfs/downloads/AnnualReport2020_21.pdf.
[60] ibid 33-35.
[61] Sukhda Pritam, Iram Jan, Priyanshu Agarwal, Tarannum Khatana, Aishwarya Gairola and Sahil Rathee, Rethinking Judicial Education: A Detailed Study of Curriculum and Learning Methodologies in Judicial Academies (Centre for Research and Planning, Supreme Court of India 2024) 54–56.
[62] ibid.
[63] See Rabihah Butler, ‘Reporting fraud: The anatomy of a corporate whistleblower case’ (Thomson Reuters Institute blog, 1 August 2024) https://www.thomsonreuters.com/en-us/posts/corporates/anatomy-corporate-whistleblower-case/ accessed 18 August 2025.
[64] European Commission, ‘Unshell Proposal’ (n 51); Corporate Transparency Act (n 51).
(Mahi Agrawal is a law undergraduate from the Hidayatullah National Law University, Raipur. The author may be contacted via email at mahi.232917@hnlu.ac.in.)
Cite as: Mahi Agrawal, Control without Controllers: Forensic and Evidentiary Challenges in Regulating Phantom Boards in India, 14th May 2026 <https://rmlnlulawreview.com/2026/05/14/control-without-controllers-forensic-and-evidentiary-challenges-in-regulating-phantom-boards-in-india/> date of access.
