Lok Sabha Question No. 3979 (UNSTARRED), answered on 2018-08-10
Subject: Vanishing Companies
Ministry: CORPORATE AFFAIRS
Asked by: KAMLA DEVI PATLE

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 3979 ANSWERED ON FRIDAY, THE 10 TH  AUGUST, 2018 [SHRAVANA 19, 1940 (SAKA)]

## VANISHING COMPANIES

## QUESTION

3979.  SHRIMATI KAMLA DEVI PAATLE:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) the details regarding the total number of vanishing companies identified so far in the country, State/UT-wise;
- (b) whether any Committee has been formed to investigate the issues related to such vanishing companies and to monitor other progress of action against such companies;
- (c) if so, the total number of such companies and their promoters against whom action has been taken;
- (d) the  steps  of  the  Government  to  locate  other  companies  declared  as  vanishing companies; and
- (e) the  action  taken/proposed  to  be  taken  to  stop  such  vanishing  activities  or companies?

## ANSWER

MINISTER OF STATE FOR LAW AND JUSTICE AND CORPORATE AFFAIRS

(SHRI P. P. CHAUDHARY)

- (a) The distribution of 77 Companies currently identified as 'Vanishing' by Jurisdictional Registrar of Companies (Roc), is at Annexure.
- (b) A Coordination and Monitoring Committee (CMC), co-chaired by Secretary, Ministry of Corporate Affairs and Chairman, SEBI was set up in the year 1999 to look into the issue Vanishing  Companies.  It  consists  of  all  Regional  Directors  (RD)  of  the  Ministry  of Corporate  Affairs  as  well  as  representatives  of  the  Securities  and  Exchange  Board  of India (SEBI) and the Reserve Bank of India (RBI).
- (c) &(d): Out of the companies that came out with the Initial Public Offers (IPO) during the years 1992-2005, a total of 238 companies were identified as 'Vanishing Companies'. Due to the continuous efforts of this Ministry, 129 companies have been traced and are now  regular  in  filing  statutory  returns.  Further,  32  vanishing  companies  were  under liquidation proceedings. After deletion of these 161(i.e. 129 plus 32) companies from the list of vanishing companies, the total number of Vanishing Companies now stand at 77.

The Registrars of Companies have initiated legal action in respect of the Vanishing Companies, their Promoters and Directors.  Besides carrying out physical verification of the Registered Offices, prosecutions have been launched for various offences under the Companies Act, 1956 as well as under the Indian Penal Code, 1860.

- (e) The  Ministry  has  streamlined  the  requirements  of  incorporation  of  companies  by entrepreneurs  through  a  multi-pronged  verification  process.  This  includes  allotment  of Director  Identification  Number  (DIN)  with  Know  Your  Client  (KYC)  norms,  linkage  of details  of  promoters  and  Directors  with  their  respective  Permanent  Account  Number (PAN) etc.

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## Annexure

| REGION-WISE AND ROC-WISE DISTRIBUTION OF VANISHING COMPANIES   | REGION-WISE AND ROC-WISE DISTRIBUTION OF VANISHING COMPANIES   | REGION-WISE AND ROC-WISE DISTRIBUTION OF VANISHING COMPANIES   | REGION-WISE AND ROC-WISE DISTRIBUTION OF VANISHING COMPANIES   |
|----------------------------------------------------------------|----------------------------------------------------------------|----------------------------------------------------------------|----------------------------------------------------------------|
| Regional Director                                              | Registrar Companies                                            | of                                                             | No. of Vanishing Companies                                     |
| EASTERN REGION                                                 | Cuttack                                                        |                                                                | 1                                                              |
|                                                                | Kolkata                                                        |                                                                | 4                                                              |
|                                                                | Patna                                                          |                                                                | 4                                                              |
| EASTERN REGION                                                 |                                                                |                                                                | 9                                                              |
| NORTHERN REGION                                                | Chandigarh                                                     |                                                                | 3                                                              |
|                                                                | Delhi                                                          |                                                                | 5                                                              |
|                                                                | Kanpur                                                         |                                                                | 4                                                              |
| NORTHERN REGION                                                |                                                                |                                                                | 12                                                             |
| NORTH-WESTERN REGION                                           | Ahmedabad                                                      |                                                                | 17                                                             |
|                                                                | Gwalior                                                        |                                                                | 5                                                              |
| NORTH-WESTERN REGION                                           |                                                                |                                                                | 22                                                             |
| SOUTH-EASTERN REGION                                           | Bangalore                                                      |                                                                | 3                                                              |
|                                                                | Hyderabad                                                      |                                                                | 14                                                             |
| SOUTH-EASTERN REGION                                           |                                                                |                                                                | 17                                                             |
| SOUTHERN REGION                                                | Chennai                                                        |                                                                | 6                                                              |
|                                                                | Coimbatore                                                     |                                                                | 3                                                              |
| SOUTHERN REGION                                                |                                                                |                                                                | 9                                                              |
| WESTERN REGION                                                 | Mumbai                                                         |                                                                | 8                                                              |
| WESTERN REGION                                                 |                                                                |                                                                | 8                                                              |
| Total                                                          |                                                                |                                                                | 77                                                             |

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