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Posted at: Sep 13, 2017, 12:01 AM; last updated: Sep 13, 2017, 12:03 AM (IST)

Shell companies: Over 1 lakh directors to be disqualified

Money-laundering under scanner

  • The Ministry of Corporate Affairs has identified 1.06 lakh directors for disqualification under Section 164(2)(a) of the Companies Act, 2013 as on September 12
  • The ministry is further analysing the data of these companies available with the Registrar of Companies to identify the directors and the significant beneficial interests behind these companies
  • Profiles of directors such as their background, antecedents and their role in the operations and functioning of these companies are also being compiled in collaboration with the enforcement agencies

Tribune News Service

New Delhi, September 12

The Ministry of Corporate Affairs has identified more than one lakh directors of shell companies for disqualification. Earlier, the Ministry of Corporate Affairs had cancelled registration of 2.09 lakh defaulting companies and subsequently the Finance Ministry had given a direction to banks to restrict operations of bank accounts of these companies.

The Ministry of Corporate Affairs has identified 1.06 lakh directors for disqualification under Section 164(2)(a) of the Companies Act, 2013 as on September 12.

The Ministry is further analysing the data of these companies available with the Registrar of Companies to identify the directors and the significant beneficial interests behind these companies.

Profiles of directors such as their background, antecedents and their role in the operations and functioning of these companies are also being compiled in collaboration with the enforcement agencies.

The money-laundering activities performed under these companies are also under the scanner. The professionals, chartered accountants, company secretaries, cost accountants associated with such defaulting companies and involved in illegal activities have been identified in certain cases and the action by professional institutes such as ICAI, ICSI and ICoAI is also being monitored, an official statement said.

Prior to the action against defaulting companies, there were about 13 lakh companies in the Registry. However, after closing of around 2.10 lakh companies, there are about 11 lakh companies having active status in the Registry.

The exercise to weed out shell companies is part of the strategy formulated by the Ministry of Corporate Affairs and presented to Finance Minister Arun Jaitley and the Minister of State for Corporate Affairs PP Chaudhary.

Chaudhary is closely monitoring the situation emerging out of cancellation of registration of such companies under the Companies Act, 2013. He is holding regular meetings with the officials of the Ministry of Corporate Affairs and its subordinate organisations such as Serious Fraud Investigation Office (SFIO), Registrars of Companies (ROCs), Department of Financial Services, Indian Banks Association and other Departments involved in the crackdown against such companies.

Chaudhary said all the agencies concerned are handling this issue on priority.

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