Press Information Bureau

Government of India

Ministry of Corporate Affairs

22-March-2012 16:59 IST

Monitoring Committee for Vanishing Companies

The Minister of State in the Ministry of Corporate Affairs Shri R.P.N. Singh today informed the Lok Sabha that The term ‘Vanishing Companies’ is applied both to the Companies which cease to file their statements of return or where, after raising capital, the whereabouts of their Registered Office or their Directors are not known. A Central Coordination and Monitoring Committee was constituted in 1999 to identify such companies and recommend further action against them. Initially, 238 such companies were identified, out of which 119 companies subsequently started filing their returns with the Registrars of Companies [RoCs] concerned and were, therefore, removed from the list of Vanishing Companies. Another 32 of such companies have gone into liquidation. Currently there are 87 companies that are falling in the list of Vanishing Companies.

Replying to a written question the Minister said Prosecutions in respect of 86 companies have so far been filed under various Sections of the Companies Act for inducing investment of money by misrepresentation of facts, etc. Similarly, 82 FIRs have been filed with police in respect of certain Companies and their Directors whose whereabouts could not be traced despite efforts. It is, however, not possible to exactly quantify the amounts realised as the process of liquidation is still going on in large number of cases.

*****

ST/-

Vanishing companies: coordinated identification, liquidation and prosecution pursued to address nonfiling and director untraceability. The document reports regulatory measures against vanishing companies-entities that stop filing returns or whose registered office or directors are untraceable-through identification by a Central Coordination and Monitoring Committee, administrative removal when filings resume, liquidation proceedings, prosecutions for inducement by misrepresentation, and FIRs where directors cannot be traced; recoveries remain uncertain while many liquidations continue.