The government has identified 121 vanishing companies and filed cases in 110 cases, Minister of Corporate Affairs (MCA) Prem Chand Gupta informed the Rajya Sabha on Tuesday.
“Prosecutions have been filed in 110 cases for violations of various provisions of the Companies Act, 1956,” the minister said in a written reply to a question on the issue of vanishing companies. A Coordination and Monitoring Committee (CMC), co-chaired by MCA Secretary and Securities and Exchange Board of India Chairman, is looking into the issue of vanishing companies, their promoters and monitoring the progress of action taken against them. Out of the companies that went public during 1992-2001, a total of 238 firms were identified as vanishing companies. However, 117 companies have been traced out leaving the number of vanishing companies to 121, he said. “FIRs have been filed in 112 cases under the Indian Penal Code (IPC). SEBI has debarred 100 companies and 378 directors under section 11B of the SEBI Act from entering capital market for a period of five years,” Gupta said.
Besides, petitions were filed with the Company Law Board (CLB) in respect of two selected vanishing companies to disgorge the properties or money from their promoters or directors, Gupta added. CLB dismissed the petition in the case of Nuline Glassware (India) Ltd, currently known as Pur Opale Creations Ltd. MCA has filed an appeal before the Gujarat High Court and the case is pending. In the case of AVI Industries, which is under liquidation, the Bombay High Court has directed the official liquidator to take possession of the properties of the company and its directors. CLB has, thus, adjourned the case sine die.
