The government has identified over 16,500 companies as “confirmed shell companies”, with 80,000 others put in the suspect category and under the radar. The Finance Ministry said the companies, that are suspected to have little business but large amount of fund flow, are typically classified as shell companies as money, is routed through a web of entities. While the Serious Frauds Investigation Office (SFIO) has created the database on the basis of “red flags” put together by law enforcement agencies, the government is unwilling to disclose them.
The FM in its statement, said the task force has identified the red flags that will be used to identify more shell companies. It further said that as part of the drive to get companies to file the returns mandated under the Companies Act, the Registrar of Companies has identified and removed the names of 2,26,000 companies with close to 3,10,000 directors getting disqualified. The statement said, “With the concerted efforts of the MCA, department of financial services and the Indian Banks' Association the ex-directors/authorised signatories of the struck-off companies have been restricted from operating the bank accounts of these companies and they cannot withdraw any amount from these bank accounts, other than for specified purposes, till the company is restored.”
The ministry will soon launch a public awareness campaign to make the public aware of the need to get the registrations of their defunct companies cancelled themselves.
