Number of directors disqualified by Corporate Affairs Ministry climbs to over 300,000
The directors of shell companies have been disqualified under Section 164 (2)(A) of the Companies Act
Moneycontrol News
The number of directors disqualified by the Ministry of Corporate Affairs has touched more than 300,000 after it struck off another 200,000 directors for holding posts in defaulting companies, as per a report in The Economic Times.
Moneycontrol was the first to report on August 11 that the Financial Intelligence Unit has prepared a list of more than 13,000 shell companies.
Moneycontrol also has the full list of shell companies, including the 331 companies flagged off by the Ministry of Corporate Affairs to SEBI.
The government has prepared a list of overall 16,794 shell companies with inputs from all investigative agencies. The list is mostly comprised of real estate, finance and entertainment companies.
A director of a company that has not filed financial statements or annual returns for three financial years continuously would not be eligible for re- appointment in that company or any other firm for five years, the Act says.
The directors have been disqualified under Section 164 (2)(A) of the Companies Act.
Earlier, the government had cancelled the registration of over 2.09 lakh shell companies which have not been carrying business activities for a long time. The Finance Ministry had also directed banks to restrict bank operations of shell companies' accounts.
The prominent names that feature in the list of disqualified directors include former Chief Minister of Jammu and Kashmir Omar Abdullah, Malayalam film star Mohanlal, Maharashtra sales tax commissioner Rajeev Jalota, leading consultant Rama Bijapurkar, and others.
The government issued a statement on September 6 stating that any director or authorised signatory of any “struck off” company found to be siphoning off money from its bank account may attract punishment up to 10 years.
Minister of State for Corporate Affairs PP Chaudhary had earlier said: "The fight against black money shall be incomplete without breaking the network of shell companies. Possibility of using the shell companies for laundering the black money cannot be undermined."
