The Vanishing Act

The Vanishing Act
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First Published: Sun, May 27 2007. 10 23 PM IST

Updated: Sun, May 27 2007. 10 23 PM IST
The government has identified 114 firms as ”vanishing” companies, those that have essentially disappeared with around Rs800 crore of investors’ money and has already initiated prosecution against 107 companies. The crackdown against such companies began some eight years ago with the setting up of a Coordination and Monitoring Committee, which was co-chaired by top officials from ministry of corporate affairs and the Securities and Exchange Board of India (Sebi). This committee originally identified 229 companies that had vanished. Out of that initial list, 115 companies were traced and found to be filing their returns with the Registrar of Companies. In order to check proliferation of vanishing companies Sebi has also amended its Disclosure and Investor Protection Guidelines. This is to enforce greater disclosure requirements about promoters of companies. The Ministry has also initiated an e-Governance project under which it is easier to identify authorized directors and professionals, through its portal MCA 21 (http://www.mca.gov.in/MinistryWebsite/dca/aboutus/aboutmca21.html.) In 2006, the ministry also initiated e-filing system and companies now have to file their statutory returns electronically. This has also led to a significant change in the number of filings. While 221,000 lakh returns were filed in 2005-06, filings rose to 316,000 in 2006-07.
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First Published: Sun, May 27 2007. 10 23 PM IST
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