Govt takes stock of vanishing firms

The central monitoring committee (CMC) of the ministry of company affairs and the Securities and Exchange Board of India (Sebi) is meeting next week to review the progress on actions taken against vanishing companies.

"The government is closely monitoring the cases and the ministry is keen on bringing the promoters of these companies to book so that such instances are avoided in the future," an official said.

The CMC comprising Komal Anand, secretary, company affairs, N Damodaran, Sebi chairman and chief secretaries or their representatives from West Bengal, Tamil Nadu, Andhra Pradesh and Gujarat, and Delhi's Commissioner of Police, will review the 115 cases pending in the original list of 229 .

These 115 companies had come out with public issues of Rs 803 crore.

"Gujarat with 32 cases tops the list. Some NGOs from Gujarat will also be coming as special invitees to the meeting," the official said.

In its review of the 115 cases,the CMC will examine the status and progress made in 107 cases where prosecutions have been filed and also the follow-up of the remaining eight companies.

The CMC will also review the progress in 97 cases where FIRs have been filed under the Indian Penal Code (of which,only 74 cases have been registered).

The government had reduced the number of task forces investigating the companies, from seven to four to align them with the four regional directorates of company affairs.

Recently, it was also decided to involve investor associations and NGOs which were registered with Sebi or the investor protection fund.

These organisations have been roped in as special invitees to give their inputs for protecting investors' interests. Sebi has till now debarred 100 companies and 378 directors for five years from accessing the capital markets and also advised the stock exchanges to monitor compliance with listing agreements.