Govt asks states to stop sale, transfer of properties of shell companies

The surveillance of shell companies will go a notch higher with their real estate coming under the scanner of the authorities, and the firms will be debarred from selling and transferring such properties.

The ministry of corporate affairs (MCA) has asked state governments to identify properties owned by shell companies and put them in the custody of the district collectors concerned.

“They (states) have been asked to issue orders to prohibit the sale and transfer of such properties by asking the district collector to take custody of such real estate assets,” a source in the ministry said.

Action will be taken under Section 250 of the Companies Act.

The MCA says shell or “dabba” companies have immovable properties and bank accounts in states other than where their headquarters are located.

The ministry has also asked the authorities to identify such bank accounts and take action.

Meanwhile, it has directed banks to furnish revised details of transactions at the time of demonetisation.

The government had asked banks for the data of more than 200,000 companies whose accounts were frozen.

The ministry has written to these banks, stating that there are gaps and discrepancies in the data furnished by them and has asked them to resubmit the data.

For instance, a bank said transactions of minus Rs 67 crore were done in the aftermath of demonetisation, while the figure was Rs 117 crore.

These banks have been asked to re-furnish details to the Serious Fraud Investigation Bureau (SFIO) and other investigative agencies.

According to MCA officials, Maharashtra has the highest number of shell companies at 50,818 struck off by the Registrar of Companies (RoCs), followed by Delhi at 44,178 and Tamil Nadu at 20,739.

Transactions worth Rs 10,000 crore were identified at the time of demonetisation by these companies, say sources in the ministry.

Among the 1.1 million companies that are active, the largest number — 234,525 — of them are registered with the Delhi RoC, followed by the Mumbai RoC with 183,000, and Kolkata RoC with 134,000.

The ministry had debarred the directors of the struck-off shell companies from being directors in other companies. A source said that even though a director in a government-owned company cannot be disqualified from being director in other companies under the Companies Act, directors in private shell firms have been disqualified from holding posts in government-owned companies.

A number of corporate and political heavyweights have been named for disqualification by the RoCs. Some of them have moved higher courts against the ministry’s notice.