701 finance firms fail to pay investors' money: Finance Minister Arun Jaitley

NEW DELHI: Complaints have been received against 701 finance companies in the past four years for not paying investors' money.

"RBI has reported that there are 701 companies operating in different states/union territories which are not registered with the RBI, against whom complaints regarding non-payment of investors' money have been received or noticed by RBI during the last three calendar years and till November 20, 2014 in the current year," Finance Minister Arun Jaitley said in a written reply in the Rajya Sabha.

Since these companies are not registered with the Reserve Bank, such complaints are forwarded to Ministry of Corporate Affairs (MCA), Economic Offences Wing and Securities and Exchange Board of India ( Sebi) for action, Jaitley said.

He said RBI is also in the process of taking action against erring companies that were not registered as Non- Banking Financial Companies.

In 2012, MCA gave RBI a list of 34,754 companies of which 5,912 firms met the criteria to be treated as NBFCs, while 421 were not granted registration.

Jaitley said: "...5,912 companies are prima-facie carrying on business of NBFI meeting the principal business criteria for a company to be treated as NBFC and required to be registered with RBI, out of which 421 are companies which were not granted registration/whose certificates of registration were cancelled.

"RBI is in the process of initiating action against erring companies."

In reply to a separate question on tax evasion petitions (TEPs) in Uttar Pradesh, Jaitley said 1,786 petitions were received by CBDT since July 1, 2014 which were forwarded to respective jurisdictional authorities for appropriate action.

"Of these, 21 TEPs pertained to Saharanpur, Muzaffarnagar, and Meerut districts of Uttar Pradesh," he added.