Securities and Exchange Broad of India
PMD/AK/VC/19771 /2000
December 13, 2000
To All Investors Association
Dear Sir,
Sub: Vanishing Companies.
Please refer to our earlier letter PMD/VC/DT/152/00 dated 5th January 2000 requesting to forward information on vanishing companies.
SEBI has been receiving complaints from Investors’ Associations and investors about certain companies suspected by them to have vanished. Upon perusal of the complaints it was observed that basic information required for considering whether such company/s apparently fall within the category of vanishing companies, is not contained in the complaints.
In this connection, it may be noted that the following criteria are adopted to classify a company as a vanished company.
l Companies which have not complied with listing requirements/ filing requirements of Stock Exchange/ROC respectively for a period of 2 years
l No correspondence has been received by the exchange from the company for a long time.
l No office of the company is located at the mentioned registered office address at the time of Stock Exchange inspection.
It may also be noted that non trading of the shares of the company on the stock exchanges may not be considered as a reason for suspecting a company as a vanishing company as trading is a market phenomenon.
We have also come across complaints alleging that the companies have vanished on the reason that the correspondences made to them have returned undelivered . In this regard,the investors may ensure that their correspondences are made to the current address/ changed address of the company after obtaining the same from the respective ROCs and Stock Exchanges.
SEBI has a separate section operating under the Primary Market Department, which handles the complaints about vanishing companies and further action against the companies and their Directors.
With a view to effectively deal with the complaints regarding vanishing companies and to further initiate actions expeditiously against them, if so called for, it will be necessary to have the basic information about the vanishing companies then nature of defaults, details of grievances, etc. A format for this purpose has been devised and is enclosed.
The Investor Associations/ Investors are advised to submit their complaints about the companies prima facie falling under the category of vanishing companies in the prescribed format to Vanishing Companies Section of Primary Market Department of SEBI at Head Offices or the respective Regional Offices of SEBI. The addresses of Head Office and Regional Offices and their jurdisction are given in Annexure I.
The format is also made available on the SEBI web site www.sebi.gov.in.
However it may be noted that the general investors’ complaints other than complaints about vanishing companies such as non receipt of refund, non receipt of dividend, non receipt of
share certificates, bonds & debentures and for non receipt of miscellaneous reports, shall continue to be made to SEBI Investors Grievance and Guidance Division at Head Office or respective Regional Office as given in Annexure II.
