Monitoring Committee for vanishing companies
The Government has informed Lok Sabha that a Coordination and Monitoring Committee (CMC), co- chaired by Secretary, Ministry of Corporate Affairs and Chairman, Securities and Exchange Board of India (SEBI) has been set up to look into issues relating to companies that had come out with public issues and vanished and to monitor the progress of action taken against such vanishing companies and their promoters. Specific criteria have been adopted by CMC for identification of such vanishing companies.
In reply to a question Shri Salman Khirshid, Minister for Corporate Affairs, informed the House that out of the companies that came out with Initial Public Offer (IPO) during 1992 to 2005, a total of 238 companies were identified as vanishing companies. With the continuous efforts of the Ministry/ CMC, 117 companies have been traced back, resulting in the number of vanishing companies being reduced to 121. Prosecutions have been filed against 112 vanishing companies and their promoters/directors under various provisions of the Companies Act, 1956 and First Information Reports (FIRs) have also been filed against Promoters/ Directors of 112 vanishing companies under Indian Penal Code (IPC). 35 directors were arrested and later released on bail. The House was informed that the field offices are pursuing the prosecution cases in the respective courts.