Business

Govt cancelled 2.24 lakh suspected shell firms after note ban

New Delhi, Nov 5: The Ministry of Corporate Affairs (MCA) on Sunday said it struck off around 2.24 lakh companies for remaining inactive for a period of two years or more. 

Apart from this government also disqualified around  3.09 lakh Directors, who were on the Board of Companies that have failed to file Financial Statements and/or Annual Returns for a continuous period of three (3) financial years during 2013-14 to 2015-16.

Following the decision of  striking-off defaulting companies, restrictions have been imposed on operation of their bank accounts in accordance with the law.

“A Preliminary Enquiry on the basis of information received from 56 banks in respect of 35,000 companies involving 58,000 accounts has revealed that an amount of over Rs. 17,000 crore was deposited and withdrawn after demonetization. In one case, a company which had a negative Opening Balance on 8th November, 2016, deposited and withdrew Rs.2,484 crore post-demonetization” the official press release said.

“Apart from the restrictions on bank accounts, action has also been taken to restrict sale and transfer of moveable and immoveable properties of struck-off companies until they are restored. The State Governments have been advised to take necessary action in this regard by disallowing registration of such transactions”, it added.

In one particular account, the MCA said, an account which had a negative balance on 8 November, deposited and withdrew Rs 2,484 crore post note ban.Another company was found to have as many as 2,134 accounts.

However, the action is a part of the special drive conducted by a special task force constituted by the Prime Minister’s Office under the joint chairmanship of revenue secretary and secretary, corporate affairs. The task force was in-charge of chalking out the drive against such defaulting companies with the help of various enforcement agencies.

Besides this, in a separate action the MCA more than 3.09 lakh board of directors were disqualified for their companies failing to file financial statements and/or annual reports for a continuous period of three financial years during  2013-14 to 2015-16, necessary under the Companies Act 2013.

According to Preliminary enquiry over 3,000 disqualified Directors are Directors in more than 20 companies each, which is beyond the limit prescribed under the Law.

“Further, in the light of the evidence with respect to abuse of the Corporate Structure through multi-layering, not more than two (2) layers are now permitted beyond the wholly owned subsidiary. This is in addition to the existing restriction which prohibits a company to make investment through more than two layers of investment companies”, MCA statement asserted.

In a bid to address the criminality angle, the Director, Additional Director or Assistant Director of SFIO have been recently authorized to arrest any person believed to be guilty of any fraud punishable under the Act. Under Section 447 of the Act, which defines fraud, stringent punishment including imprisonment up to 10 years is stipulated. Further, reference has been made to the Ministry of Finance to include it as a Scheduled Offence under the Prevention of Money Laundering Act. it further added.

The Ministry claimed that it has taken several actions to demolish the practice of dummy directors including seeding Director Identification Number (DIN) with permanent account number (PAN) and Aadhaar at the time of DIN application through biometric matching for new applications.

Wefornews Bureau

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top