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Gujarat biggest home to vanishing companies

Last updated on: August 26, 2011 11:21 IST

Gujarat biggest home to vanishing companies

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Rutam Vora in Mumbai/Ahmedabad

In a list of 87 companies that have been identified as 'vanishing' by the ministry of corporate affairs, Gujarat has topped the list with as many as 26 companies.

The list includes those companies, which raised money through initial public offers and vanished from the market.

The ministry has cited three reasons for classifying companies as vanishing companies.

These include non-maintaining of the registered office of the company, non-traceability of directors of the companies and non-filing of statutory returns or listing requirements with the concerned registrar of companies or stock exchanges for a period of two years.

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Image: A devotee shows his back with an image of Gujarat Chief Minister Narendra Modi at the Rath Yatra in Ahmedabad.
Photographs: Amit Dave/Reuters
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Gujarat biggest home to vanishing companies

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The new list was made public on Thursday.

In a written reply to the Lok Sabha on Thursday, R P M Singh, minister of state, ministry of corporate affairs stated, the ministry had earlier identified 238 companies as vanishing companies based on above-mentioned criteria, but 119 companies of the total 238 have now become regular in filing their returns with the concerned registrar of companies.

Additionally, 32 companies have gone into liquidation.

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Image: Villagers carry pitchers filled with water after visiting a well at Meni village in Gujarat.
Photographs: Amit Dave/Reuters
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Gujarat biggest home to vanishing companies

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Thus, as on date there are 87 companies still remain identified as vanishing companies.

According to the state-wise list of vanishing companies issued by the ministry, Gujarat tops with 26 of the 87 companies identified as vanishing companies. Andhra Pradesh ranked second with 13 such companies. Four companies from Bihar, two from Chandigarh and Karnataka each were placed in the list.

Orissa and Punjab have one vanishing company each.

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Image: A bride makes an entry during a mass marriage ceremony in Ahmedabad.
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Nine companies from Maharashtra, while ten companies hailed from Tamil Nadu, while Uttar Pradesh has four companies and Delhi, West Bengal have five vanishing companies each in the list.

The minister further informed that 86 prosecutions under Section 63/ 68 and 628 of the Companies Act, 1956 for mis-statement in the prospectus, fraudulently inducing persons to invest money and for false statement etc were filed against the company and its directors.

Besides, 82 FIRs were also lodged with the police to trace out the whereabouts of the companies and their directors.


Image: Dancers from Gujarat perform over a tableau during the Republic Day parade.
Photographs: B Mathur/Reuters
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