Dca Named In Vanishing Firms' Case

The special bench of Justice AN Gupta and Justice Nigam, of the Allahabad High Court has impleaded the Department of Company Affairs in the case of vanishing companies , filed by Midas Touch Investors Association.

In the renewed hearing the bench ordered the issue notice to the department, requiring them to file a response about the alleged vanished companies, in four weeks time.

Justice AN Gupta yesterday seized the initiative and said at the outset that this was a vital matter where crores of rupees have been swindled by the companies after making public issues and they have not kept in touch with the investors. Something has to be done in this regard and this is the main issue. He said that some mechanism has to be evolved through which this money can be traced and returned to the investors who have lost crores of rupees. He specifically cited the case of plantation companies and Teak companies who have vanished after making public issue.

 

This appraoch of Justice Gupta was agreed to by Sebi's counsel RN Trivedi and that of Midas, Nalini Jain. The court room was stunned and RN Trivedi apologised, when Justice Gupta said in the open court that he has received two letters from a Sebi official. He said that this is something which should be discontinued. He said that he has not taken conginzance of these letters and has thrown them in the dustbin. In the arguements, Sebi's counsel RN Trivedi pleaded that Sebi has been granted limited authority under the Sebi act and the securities contract regulation act,SCRA, and the main powers are with the the department of company affairs to seek information from various companies periodicially and require them filing of the balance sheet and profit & loss account and chnage in the registered office if any.