238
companies were identified as ‘Vanishing Companies’. They had raised funds
through Public issues and had stopped filing financial statements and annual
returns with the concerned regulators. Of these, 128 companies were removed from
this category and placed under a ‘Watch List’, as they had started filing their
financial statements and annual returns. In addition, 32 companies are
presently under liquidation. As on date, there are 78 companies that continue
to be classified as ‘vanishing companies’. The total amount of Public Issues
made by these 78 companies comes to approximately Rs 310.21 crores.
Companies Act, 2013
contains various provisions to protect investors. Views of all stakeholders
including professionals, financial institutions, banking sector, CII etc. were
invited and taken into consideration before enactment of the Companies Act,
2013. The provisions for protection of investors, as under the Companies Act,
2013, inter alia, include:
i) Enhanced disclosure norms so that
investors get all relevant information from companies;
ii) “Fraud” defined for the first
time as a substantive offence, and cover many dubious activities which were not
specifically covered under the Companies Act, 1956;
iii) Serious Fraud Investigation
Office (SFIO) has been granted statutory status with adequate powers.
iv) Provisions for
attachment and disgorgement of assets.
v)
Auditors’ accountability and independence enhanced through provisions which
inter alia include rotation of auditors, etc. This would improve objectivity of
audit and provide better insights to the investors;
(e) A Market Research and
Analysis Unit (MRAU) has been set up in the Serious Fraud Investigation Office
(SFIO) with the objectives of analyzing media reports relating to financial
frauds and for conducting market surveillance of such corporates. In order to
strengthen MRAU’s functioning, an Expert Committee was constituted and on the
basis of its recommendations a forensic lab with appropriate technology and
skilled technical manpower has been set up in SFIO.
(f) The Ministry organizes
investor awareness programmes regularly in association with the three
professional institutes – Institute of Chartered Accountants of India (ICAI),
Institute of Cost Accountants of India (ICAI) and Institute of Company
Secretaries of India (ICSI) in various cities under the aegis of Investor
Education and Protection Fund (IEPF). The programmes are held for creating
awareness and empowerment amongst investors. Since 2012-13, MCA has also
started organizing such programmes in rural areas through CSC e-Governance
Services India Ltd., an entity under Department of Electronics and Information
Technology. 2897 such programmes were organised during the year 2013-14, under
the IEPF.
This was stated by the
Minister of Corporate Affairs, Shri Arun Jaitley in a written reply to a
question in Lok Sabha today.
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