The Centre said it has identified 2,25,910 companies whose names are to be struck off from the register of companies during the current financial year 2018-19.
This comes on the top of the removal of 2,26,166 companies from the register during the previous financial year.
The Task Force on Shell Companies had so far confirmed a total of 16,537 shell companies on the basis of the information received from the various law enforcement agencies, according to the Centre. It had also narrowed down a list of 16,739 companies identified on the basis of having 100% common directorships with the confirmed shell companies.
“For the second drive to be launched during the current financial year 2018-19, a total of 2,25,910 companies have been further identified for being struck-off under Section 248 of the Companies Act, 2013 along with 7,191 LLPs for action under Section 75 of the LLP Act, 2008 due to non-filing of financial statements for the years 2015-16 and 2016-17,” the Centre said in a statement. “An opportunity of being heard will be given to these identified companies and LLPs by way of notices regarding their default and the proposed action. Appropriate action will be taken after considering their response.”
Compilation of database
“The major achievements of the task force include the compilation of a database of shell companies by the Serious Fraud Investigation Office (SFIO),” the Centre said. “This database, as on date, comprises of three lists, viz the confirmed list, derived list and suspect list. The confirmed list has a total of 16,537 confirmed shell companies on the basis of the information received from the various law enforcement agencies of the companies found to be involved in illegal activities.
“The derived list has 16,739 companies identified on the basis of 100% common directorships with the confirmed shell companies,” the statement added. “The suspect list has 80,670 suspected shell companies and has been drawn up by SFIO using certain red flag indicators. The task force has identified certain red flag indicators, which will be used to identify more shell companies.”
The Task Force on Shell Companies, which had, so far, met eight times, was set up in February 2017 by the Prime Minister’s Office under the joint chairmanship of the Revenue Secretary and Secretary, Ministry of Corporate Affairs with a mandate to “check in a systematic way, through a coordinated multi-agency approach, the menace of companies indulging in illegal activities including facilitation of tax evasion and commonly referred to as ‘shell companies’”.
The Registrar of Companies had removed from the register of companies the names of 2,26,166 companies that had not filed their financial statements or annual returns for a continuous period of two or more financial years. “As many as 3,09,619 directors were also disqualified… for non-filing of financial statements or annual returns for a continuous period of immediately preceding three financial years (2013-14, 2014-15 and 2015-16),” the Centre added.
