Over 29,000 firms in Telangana and Andhra Pradesh are being probed by the Registrar of Companies (RoC) in Hyderabad for violations of the provisions of Companies Act, 2013, which on confirmation will result in their de-registration.
This apart, the investigation could also result in some material evidence that can serve as inputs for other regulators to launch investigations from various angles, including the firms serving as shell companies. Last week, the RoC, as part of a nationwide drive, also initiated physical verification of buildings that host more than 25 companies in Hyderabad. It has also identified more than 10 such locations in the two Telugu speaking States for undertaking verification.
“I want to know whether these companies are in existence or not, what are they doing,” a senior official of the Ministry said, adding the RoC is likely to de-register a little over 15,600 companies by August-end. The action follows the firms not filing annual returns and balance sheets for more than two consecutive fiscals. These 15,000 odd companies would join the 20,082 firms that were de-registered in Telangana and Andhra Pradesh last fiscal.
An additional 13,500 companies are also under the scanner, with RoC planning to issue fresh notices to them soon. The number of companies registered in the two Telugu speaking States is 1.27 lakh, something the official expected to drop, on account of de-registration, to around 95,000 by this fiscal.
The RoC action is to ensure that the companies exist and are not briefcase firms that indulge in irregularities and also dupe investors. “We also provide inputs to other regulators,” the official said, adding about 13 companies in the two States are being investigated for transactions, including by the Serious Fraud Investigation Office (SFIO) they carried out post the demonestisation of November 2016.
Figuring in the list of companies under RoC are about 520 LLP (Limited Liability Partnership firms) preferred by many new age companies, including start-ups, with some of them also raising funds from motley group of investors.
RoC for AP
The number of companies with RoC Hyderabad is also set to come down with the government deciding to set up an office of the RoC separately for Andhra Pradesh. “We have decided to split this RoC... [will happen] within three months... [office] to be set up in Vijayawada,” the official said, adding about 23,000 companies would come under the new facility.
