The government has asked market regulator the Securities and Exchange Board of India (Sebi) to devise ways of monitoring the end use of money collected through initial public offering (IPO), in order to keep a check on vanishing companies.

While the Ministry of Corporate Affairs (MCA), through technical scrutiny of balance sheets, keeps a check if companies are using IPO proceedings as promised in the prospectus, the Ministry wants Sebi too to look at the aspect, sources said.

Also Read   Related Stories News Now - Govt expands list of default activities in SEZs - Centre okays Rs 839 cr for Bihar under NREGA - Google's China talks on, but pullout signs grow - Govt to fight any move to unseat Pachauri from IPCC - Gail, Uttarakhand to set up two gas-based power plants - Orissa may achieve revenue collection target for 2009-10

Also Read   Related Stories News Now - Markets end flat - Turbulence ahead for airlines despite oil price drop - Weak rupee may bring cheer to NRIs, expats - LIC buys PSU stocks, sells pvt sector blue-chips in Q4 - Banks may lower deposit rates as inflation eases: Report More

The proposal was mooted at a recent meeting of the Coordination and Monitoring Committee (CMC) on vanishing companies, headed by MCA Secretary R Bandyopadhay and represented by ministry officials, the Sebi and the Reserve Bank of India.

At present, sources said, MCA is the only authority that can monitor the end use of IPO money.

In 2009, around 20 companies raised a total of Rs 20,000 crore through IPOs. In 2010 so far, as many as 16 companies have come out with public offerings, including IPOs and FPOs.

Moreover, a host of companies have filed papers for Sebi approval for raising funds worth Rs 15,788 crore through public offers so far this year. While, issues amounting to another Rs 22,805 crore are awaiting the market regulator's nod, according to a report by SMC Capital.

Besides, around 90 companies in the country have been recognised as vanishing companies, according to the latest list available on the website of Ministry of Corporate Affairs.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Markets end flat - Turbulence ahead for airlines despite oil price drop - Weak rupee may bring cheer to NRIs, expats - LIC buys PSU stocks, sells pvt sector blue-chips in Q4 - Banks may lower deposit rates as inflation eases: Report

Tags : IPO funds | Govt | Sebi | initial public offering   Read Business news in  Advertisements -  Benefits Upto Rs. 2.36 Lakhs on the Fully Loaded TJet Petrol. -  Journey on, We are by Your Side. Click here to know more -  2 Lac Apartments, 1 Lac House / Plots. Click here -  Benefits Upto Rs. 2.36 Lakhs on the Fully Loaded TJet Petrol. -  Watch The Film Here. Click here to know more.. -  Leader in Passenger Car & Automobile Tyres. Click here -  1 billion in saving for Unilever without any tangles. -  A Brand New Server at a Price That Fits Your Budget. Click here -  Learn How One City is Running on FOOD SCRAPS. -  One Partnership Endless Possibilities. Click here to know more -  Helping doctors detect diseases earlier, saving costs & extending lives. -  36 Lakhs can get you a pool of Luxuries. Click here -  Which is the best plan for your daughter -  Check out the TRUE COLOURS of your Stocks, Now for FREE! -  One of the leading business schools in the world.Know More