Shell cos clampdown: Chandy, Sasikala among 106,578 disqualified directors

In the process of cracking the whip on shell companies, the Ministry of Corporate Affairs (MoCA) has pulled up high-profile names like former Kerala CM Oommen Chandy, jailed politician V K Sasikala, Leader of the Opposition in the Kerala Assembly Ramesh Chennithala and Gulf-based business tycoon M A  Yusufali. According to The Hindu, these prominent names have been mentioned for disqualification as directors.

After freezing bank accounts of 200,000 shell companies, MoCA has identified 106,578 directors to debar them from the board of not only these firms but also others for a period of five years.

The ministry said that some members of ICAI, ICSI and other associations involved in these shell companies have also been identified and it has asked these bodies to take action against them. They cautioned these institutions that their actions were being monitored.

Profile of directors such as their background, antecedents and their role in the functioning of these shell companies is also being compiled in collaboration with the enforcement agencies. Serious Fraud Investigation Office (SFIO), ROCs, Department of Financial Services, Indian Banks' Association and other departments are involved in the crackdown against defaulting companies.

It may be noted that prior to action against defaulting companies, there were about 1.3 million companies with RoCs.

However, after closing of around 210,000 companies, there are about 1.1 million companies with 'active' status.