After KYC deadline, govt to weed out dummy holders of director ID numbers

The government will soon initiate "data analysis" to weed out dummy holders of director identification numbers after just over 1.2 million individuals complied with the KYC requirements within the stipulated deadline, an official said Monday.

More than 200,000 KYC filings were received by the Corporate Affairs Ministry from individuals having Director Identification Numbers (DINs) in just two days -- September 14 and 15, the official said. The deadline, set by the ministry, for submission of Know Your Customer (KYC) details ended on September 15.

While there are around 3.3 million active DINs in the registry maintained by the ministry, which is implementing the Companies Act, around 1.2. million DIN holders complied with the KYC norms. Nearly 2.1 million individuals failed to comply with the requirement, the official said.

During September 14 and 15, as many as "86,767 and 1,14,890 KYC filings" were made in the MCA 21 system, respectively, he added.

According to the official, a detailed data analysis would be carried out to weed out dummy DIN holders.

MCA 21 is used by stakeholders to submit requisite filings to the ministry.

The move is part of larger efforts to illicit fund flows through corporate structures.

The DINs -- a unique number allotted to individuals who are eligible to have directorship on the boards of registered companies -- of those who failed to comply with the KYC requirements are being de-activated. They would be re-activated after a fee payment of Rs 5,000 along with the requisite form and the individuals concerned might also face action.

In June, the ministry decided to carry out KYC process for all directors, including those who have been disqualified. The last date for complying with the new norms by way of submitting form 'DIR-3 KYC' without fee ended on September 15.

"The drive is aimed at verification of individual DIN holders and weed out non-existent/ dummy DIN holders and ultimately to clean up the directors' e-registry," the official said.

Emphasising that the move would help in bringing "self-correction" in the registry, the official said enough time was given for the individuals concerned to submit their KYC details,

The KYC process is for obtaining details about a DIN holder's Aadhaar, Passport as well as personal mobile number and e-mail id. For those individuals not having an Aadhaar, the ministry had provided certain "exceptions", the official added.

In 2017, the ministry had disqualified more than 300,000 persons from holding directorship at registered companies. These individuals were directors at firms that were not carrying out business activities for a long time.