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Govt cancelled 2.24 lakh suspected shell companies post demonetisation, disqualified 3.09 lakh directors

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, according to an official release from the ministry, a copy of which is with Firstpost.

Several of these companies are suspected to be shell companies, and restrictions have been imposed on the operation of their bank accounts and sale of movable and immovable properties until they are restored. The decision was taken based on data received from 54 banks post demonetisation.

 Govt cancelled 2.24 lakh suspected shell companies post demonetisation, disqualified 3.09 lakh directors

Representational image. Firstpost

A preliminary examination of 58,000 accounts involving 35,000 companies has revealed that over Rs 17,000 crore was deposited and withdrawn post demonetisation, the release said. Demonetisation was a central government order passed on 8 November, 2016, which had invalidated all old notes of Rs 500 and Rs 1,000.

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

The release, however, didn't mention whether all the accounts which were part of the preliminary enquiry belonged to the blocked 2.24 lakh companies.

The ministry also advised state governments to disallow registration of such transactions, the release added.

The 2.24 lakh companies were struck off as part of a 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 overseeing the drive against such defaulting companies with the help of various enforcement agencies.

The task force has so far met five times and action has been initiated against several defaulting companies, which is expected to help in the drive against black money.

In similar but separate action, around 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, necessary under the Companies Act 2013.

The ministry is also examining abuse of corporate structure as several of the companies were found to be involved in multi-layering. A preliminary examination of companies has shown that over 3,000 disqualified directors are directors in more than 20 companies each, which is beyond the prescribed limit.

The ministry is currently examining ways to bring the defaulting companies and their directors to task, and has authorised the director, additional director or additional director of SFIO to arrest any person believed to be guilty of any fraud.

The MCA claimed that it has taken several steps to end 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.

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Updated Date: Nov 05, 2017 14:23:39 IST