Reality check for vanishing firms

NEW DELHI: The department of company affairs (DCA) and Sebi have defined a set of criteria for identifying vanished companies.
According to the criteria prescribed, if a company does not comply with the listing agreement for two years with the respective stock exchange and registrar of com-panies, does not submit the required reports to the regional stock exchange, does not correspond with the regional stock exchange with two years or is not available at its registered office at the time of stock exchange inspection, it will be identified as a vanished company.
This was disclosed today by the for finance and company affairs Jaswant Singh. He was replying to a question in Parliament.
The government has already begun charging and punishing the directors and promoters of over 200 companies that went untraceable after raising public funds in 1993-94 and 1994-95. DCA has already ordered prosecutions in about 60 cases under Sections 63, 68 and 628 of the Companies Act. Violations of these sections are uncompoundable and the directors of these vanished companies are sure to face imprison-ment.
Besides, DCA and Sebi have also decided to file FIRs against the directors under Section 420 of IPC.
Similar action is being contemplated against directors of more van-ished companies. Sebi has identified 229 listed companies which have collected funds through public issue and are not available now at their registered offices.
The list was subsequently sent to DCA which in-structed its field officers to check for violations of provisions of the Companies Act by these companies.