Over 100,000 shell firm directors disqualified

Over 100,000 shell firm directors disqualified

In a fresh crackdown, the Ministry of Corporate Affairs directors for their association comes just a few days after around 200,000 shell companies identified for disqualification only be debarred from their but also from other companies years that more directors are under Last Wednesday, the ministry saidadecision had been taken blacklist 300,000 directors of ministry has said action would taken against some members of Chartered Accountants of of Company Secretaries of associations involved with These institutions have are being monitored.

Asource at ICAI told Business Standard that the association has identified 26 CAs and is gathering more evidence against them.

However, ICSI sources said there was no company secretary involved with shell companies, though some of them were linked to financial defaults.

"The ministry has identified 1,06,578 directors for disqualification under Section 164(2)(a) of the Companies Act, 2013 as on September 12, 2017," the government said inastatement. Under the section, these directors cannot join the board of any other company for the next five years.

The ministry is further analysing the data available with the Registrar of Companies to identify directors and the significant beneficial interests related to these entities.

"The money laundering activities performed under the aegis of these companies are also under the scanner,"astatement from the government said. Profiles of directors such as their background, antecedents and their role in the functioning of these shell companies are being compiled in collaboration with the enforcement agencies.

Serious Fraud Investigation Office (SFIO), ROCs, Department of Financial Services, Indian Banks´ Association and other departments are involved in the crackdown against defaulting companies.

Minister of State for Company Affairs PP Chaudhary said, "all the agencies concerned are handling this issue on priority.

The fight against black money shall be incomplete without breaking the network of shell companies.

Possibility of using the shell companies for laundering black money cannot be undermined."Astatement from the government said this exercise would goalong way in creating an atmosphere of confidence and faith in the system, paving the way for ease of doing business in India.

"The interest of stakeholders would be protected and the image of the country in the global business arena would substantially improve,” the government said. Recently, the MCA also issued notices to companies that are supposed to function as NBFCs but have not registered with the Reserve Bank of India.

Prior to action against defaulting companies, there were about 1.3 million companies registered with RoCs.

However, after the closure of around 210,000 companies, about 1.1 million are active.

The Business Standard, New Delhi, 13th September 2017