Black money drive: Suspected shell companies deposited Rs 17,000 crore in banks after demonetisation

Around 2.24 lakh companies have been struck off till date for remaining inactive for two years or more, the Union Ministry of Corporate Affairs said.

By: Express Web Desk | New Delhi | Updated: November 6, 2017 12:15:56 am
Ministry of Corporate affairs struck off 2.24 lakh companies and disqualified 3.09 lakh directors on boards of companies. Some of the companies were suspected to be shell firms while around 3,000 directors were found to be on boards of more than 20 companies. Express Photo by Arul Horizon

Around 2.24 lakh companies have been struck off till date for remaining inactive for two years or more, the Union Ministry of Corporate Affairs said on Sunday in a release. Some of these companies are suspected to be shell companies.

The government struck off the companies on the basis of information provided by 56 banks of about 35,000 companies and 58,000 bank accounts. The preliminary inquiry initiated against these firms revealed that a sum of around Rs 17,000 crore was deposited and withdrawn after demonetisation of Rs 500 and Rs 1,000 notes last year in November.

The release said, one company was found to have 2,134 accounts and one firm, which had a negative opening balance, deposited and withdrew Rs 2,484 crore post demonetisation.

Subsequent action taken against the companies includes freezing of bank accounts of these firms, restrictions on sale or transfer of movable or immovable assets of these companies till the time they are not restored by the government. The state governments have also been advised to block registration of such transactions.

The move to strike off the inoperative firms was taken under a special drive by a special task force formed by the Prime Minister’s Office. The task force oversees the drive against defaulting companies. It is working with other enforcement agencies and is jointly chaired by the Revenue Secretary and Secretary, Corporate Affairs. The special task force has met five times so far and it has initiated action against defaulting firms. The drive is part of Prime Minister Narendra Modi’s drive against black money.

Meanwhile, the ministry disqualified 3.09 lakh directors on boards of companies that had failed to file financial statements and/or annual reports for three consecutive fiscals, as it is a mandatory requirement under the Companies Act, 2013. Failure to abide by the requirement draws legal action under penal provisions provided under the same Act.

Preliminary enquiry has shown that 3,000 directors out of the disqualified group were directors on boards of over 20 companies which is beyond the legal limit.

Further, multi-layering is also being scrutinised. Under set law, investments are prohibited by a company through more than two layers of investment companies. As not more than two layers are permitted beyond the wholly owned subsidiary, the ministry is examining abuse of corporate structure via multi layering.

The ministry has given authority to the director, additional director or assistant director of SFIO to arrest any person who is believed to be guilty of fraud. It said that it has also taken steps to stop dummy directors and seeding Director Identification Number (DIN) via PAN and Aadhaar while applying for DIN.

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