MANU/PIBU/1169/2017

Department/Board : Press Information Bureau

Date : 12.09.2017

Ministry of Corporate Affairs (MOCA) identifies more than one lakh directors of shell companies for disqualification

Pursuant to the action of the Ministry of Corporate Affairs of cancellation of registration of around 2.10 lakh (2,09,032) defaulting companies and subsequent direction of the Ministry of Finance to banks to restrict operations of bank accounts of such companies by the directors of such companies or their authorized representatives, the Ministry of Corporate Affairs has identified 1,06,578 Directors for disqualification under Section 164(2)(a) of the Companies Act, 2013 as on September 12, 2017.

Ministry of Corporate Affairs is further analyzing the data of these companies available with the Registrar of Companies to identify the Directors and the significant beneficial interests behind these companies. Profiles of Directors such as their background, antecedents and their role in the operations/functioning of these companies are also being compiled in collaboration with the enforcement agencies. The money laundering activities performed under the aegis of these companies are also under the scanner. The Professionals, Chartered Accountants/Company Secretaries/Cost Accountants associated with such defaulting Companies and involved in illegal activities have been identified in certain cases and the action by Professional Institutes such as ICAI, ICSI and ICoAI is also being monitored.

The above exercise is part of the strategy formulated by the Ministry of Corporate Affairs and presented to the Union Finance Minister, Shri Arun Jaitley and the Minister of State for Corporate Affairs Shri P.P. Chaudhary. The Minister of State Shri Chaudhary is closely monitoring the situation emerging-out of cancellation of registration of such companies under the Companies Act, 2013. He is holding regular meetings with the officials of the Ministry of Corporate Affairs and its subordinate organizations such as Serious Fraud Investigation Office (SFIO), Registrars of Companies (ROCs), Department of Financial Services, Indian Banks Association and other Departments involved in the crackdown against such companies.

MOS (CA) Shri Chaudhary said that all the concerned agencies are handling this issue on priority. He said "The present Government has vowed to fight Black Money and fighting the menace of Shell Companies is an imperative element of such fight. The fight against black money shall be incomplete without breaking the network of shell companies. Possibility of using the Shell companies for laundering the black money cannot be undermined.

I am happy that all the concerned agencies are handling this issue on priority. The disqualification under Section 164 of the Act is by operation of law. We are identifying the defaulting Directors of these shell companies. My officers have assured me that by the end of this month, we would be ready with the relevant details of all defaulting Directors of these shell companies.

This whole exercise shall go a long way in creating a........