As many as 77 out of over 200 ‘vanished’ companies that came under the scanner between 1996 and 2004, continue to remain missing even as others have been traced. Many of these untraceable companies did not list after filing for Initial Public Offer (IPO).
All these companies were issued notices, to which over 100 of them responded while the rest remain untraceable, officials said.
The ministry of corporate affairs is still in the process of tracking 77 missing companies with the help of the Registrars of Companies.
These companies were found missing as they did not maintain their registers at the address as per the records of the Registrar of Companies or the stock exchanges.
These companies have also failed to file returns for two years with the Registrars of Companies and the stock exchanges, in the case of a listed entity.
As per government records, these companies have been termed as vanishing as their directors are also not traceable.
According to a recent Parliament reply, junior minister for corporate affairs PP Chaudhry said Gujarat has the most number of vanishing companies at 17.
The reply also stated that the government has filed FIRs against over 70 companies.
Instructions have been issued to the Registrar of Companies to scrutinise the balance sheet and other records of any company that raises money through public issue and monitor the utilisation of such funds, said the minister in his statement to the Lok Sabha.
Legal professionals have also been hired at the state level to look into these companies.
This is not the first time where so many companies have been found ‘missing’. Between 1992 and 1996, more than 4,000 public companies were found missing. In fact, at that time, these companies were also found to have laundered money. An study on this was done by PRIME in January 1997. This study revealed that nearly 85 per cent of the issues of the 1992-96 period had either not listed on their designated stock exchanges or were not traded or were being traded very infrequently or were being traded significantly below their offer prices, suggest reports.