Minutes of the 28th Meeting of the Co-coordination and Monitoring Committee (CMC) on Vanishing Companies held on 25.04.2014 at 10.00 A.M. i n the Conference Room, Ministry of Corporate Affairs, Shastri Bhawan, New Delhi

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The 28th Meeting of the Co-coordination and Monitoring Committee (CMC)

on Vanishing Companies was held on 25.04.2014 at 10.00 AM under the

Chairmanship of Secretary, Ministry of Corporate Affairs. The l i s t of officers who

attended i s placed at Annexure-I.

A t the outset, the Chaimn wetcorned a:: cne members. Thereaft

various items of agenda were discussed and following decisions were taken: i

28.1 Confirmation of the minutes of the 27th meeting held on 23-07-201 3

28.1 .I Minutes of the 27th meeting of the CMC held on 23-07-2013 draft of

which had already been circulated to all the members, were confirmed and

approved.

28.2 Review of Action taken on decisions taken ,in 27th meeting

28.2.1 Action taken by RDs in respect of the decisicns taken in the 27th meeting ..*-

at item No. 27.2.3 regarding physical verification of premises of vanishing

companies was reviewed and the following decisions were taken:

The In-charge RD-NR informed that out of 17 'vanishing companies' in

the region, verification could be completed only in respect of three

companies under the jurisdiction of ROC-Chandigarh. However, the

outcome of verification was awaited from ,bc, Chandigarh. He further

informed that in respect of remaining companies, the concerned ROCs,

i.e. ROC Kanpur and ROC Delhi have been directed to complete the

verification at the earliest and submit their reports. He was directed

to submit the status'report in respect of all such companies within

one month.

RD-ER informed that verification of all vanishing companies under his

jurisdiction has been completed and prosecution under section 14w

the Companies Act, 1956, were being 'filed in respect of those

companies found to be in defaults in maintaining their Registered

Offices at the addresses declared to the respective ROCs.

RD-WR informed that physical verification had been completed in

respect of all 9 'vanishing companies' under his jurisdiction. He added

that during verification of the status of action taken, a case was noticed

where that Mls Caldyn Aircon Ltd. was struck off u/s 560 of the Act in

the past but it was now shown as a 'Vanishing Company'. This aspect i s

being under examination as to how a listed company was struck off

under Section 560 of the Companies Act, 1956, though the Easy Exit

Scheme was not applicable to listed compahies. RD further stated, that

in another case, an FIR could not he filed ?gainst the company and i t s

directors as the company had subsequently shifted its registered office

from the jurisdiction of ROC Mumbai to ROC, Hyderabad, and the

feasibility of filing of FIR in in the Police Station at Hyderabad was being

explored. The Chairman explained the legal position in this regard, and

stated that the FIR needs to be filed at the place where the offence

was committed, i.e., Mumbai and if on the date of declaration as

'Vanishing Company', wherever it was registered should be the place

of filing FIR.

RD-SR informed that physical verification was completed in respect ot

all 10 Vanishing Companies under his jurisdiction and FIRS have been

lodged in all the cases.

RD-NWR informed that physical verification was completed in respect

of only some of the Vanishing Companies under his jurisdiction, and the

remaining were still under verification. Further, details of the

companies in respect of which verification was stated to have been

completed were not readily available with him.

RD-NER informed that there was no Vanishing Company in NER.

RD-SER informed that physical verification had been cornplet)d in

respect of all the Vanishing Companies under his jurisdiction. He,

however, could not explain whether the companies were found to be

functioning from the premises which were found to be open.

28.2.2 After detailed discussion, the Chairman stressed the need for physical

verification of the premises of the vanishing companies at the earliest, and all

efforts must focus on tracing the whereabouts of the directors of such

companies. The Chairman further stated that RDs should also monitor whether

such directors have appeared before the courts concerned where cases have

been filed under IPC provisions. He further directed as under:

(i) All RDs to ensure that prosecutions are filed uls 146 of the

Companies Act, 1956 wherever the vanishing companies are found

in default, of maintaining their registered offices at the declared

addresses;

(Action: All RDs)

(ii) RD-WR to file FIR in Mumbai itself in respect of the vanishing

company which has shifted i t s registered office to Hyderabad.

Regarding striking off Mls Caldyn Aircon Ltd., RD-WR was directed

to examine how the company was struck off under the Easy Exit

Scheme when a listed company was not eligible for such scheme.

(Action: RD-WR)

(iii) All RDs to examine the status of Director Identification Numbers

(DINS) as to whether DINS have been obtained by the Directors of

vanishing companies. In all such cases, where it is found that DIN

have not been obtained by directors, the concerned ROCs should

file prosecutions under the relevant provisions of the Companies

Act, 1956 straightaway, without issue of SCNs. Further, wherever

DINS have been obtained by the directors of Vanishing Companies,

a report in this regard be submitted to the Ministry through the

respective RDs regarding disabling of such DINS so that a

consolidated proposal could be sent to RD-NR for disabling the

DINS in such cases.

(Action: All RDs; CL-II Secti n) P

(iv) Wherever the vanishing companies have been found to be not

maintaining their respective registered offices at the declared

addresses, the directors of such vanishing companies who have

not been traced and have not been appearing before the

respective Courts, all RDs should furnish a list of such companies

and their directors to the Ministry. The Ministry (CL-II Section)

would issue a notice and upload the same on MCA's website

stating that these companies were not found to be existing at

their place of business as declared to the respective Registrars of

Companies, and their directors were also 'not traceable' and i f

any person deals with them, it would be at his own risk;

(Action: All RDs; CL-II Section)

(v) It was directed that the matter relating to the vanishing

companies not found to be maintaining their registered offices at

the declared addresses and their directors are also not traceable

needs to be examined for the purpose of ,declaring them as

'Proclaimed Offenders'. The Ministry (CL-II Section) would

prepare a note on the matter and seek advice of the Ministry of

Law as to whether an application should be moved by the Ministry

before the respective Courts, or whether thecourts themselves

should take cognizance of the matter and declare the directors

not appearing before the Courts as 'Proclaimed Offenders';

(Action: CL-II S e c t i o k

28.3 Review of working of the Task Forces:

28.3.1 All RDs informed that the meetings of respective Task Forces in their

region were being held regularly.

28.4 Presentation by SEBI:

28.4.1 Representative of SEBI informed that as discussed in the 27th meeting

held on 23-07-2013, Show Cause Notices were not issued in respect of 27

vanishing companies out of total of 87 companies. He further informed that 11

companies out of these 27 were neither listed on BSE, or on NSE and that 3

companies had been compulsorily delisted from BSE. Of the remaining 13

companies, 6 companies were found to be compliant and therefore SEBI was

required to issue SCN against 7 companies. I t was informed by the representative

from SEBI that action in respect of issue of Show Cause Notices to these 7

vanishing companies has been completed.

28.4.2 Further, as informed in the previous meeting that the other 60

companies against which SEBI had issued orders of debarment, 8 companies were

found to be non-compliant with various provisions of the listing agreement and

it had been decided that action be initiated against these companies.

Accordingly, it was informed that SEBl has already completed the action against

those 8 companies also.

28.4.3 SEBl's representative further informed action taken in respect of

renewal of order of debarment of directors. He stated that the matter was under

examination by the Legal Cell of SEBI. I t was decided that SEBI will inform the

Committee regarding the legal opinion obtained in the matter.

28.4.4 Regarding physical verification of the premises of delisted Vanishing

Companies jointly with the concerned ROCs, SEBI's representative informed that

reservation has been expressed by some of the Stock Exchanges regarding

jurisdiction over delisted companies. I t was decided that considering the

responsibility of SEBI as a regulator of Capital Market, the matter may be

examined by the Legal Cell of SEBI, and the Committee may be accordingly,

informed so as to decide the future course of action.

(Action: SEBI)

28.5 Presentation by RBI:

28.5.1 Sh. Manish Parashar, representative of RBI informed that the matter

regarding cancellation of certificate of Registration by RBI of Mls SSK Fiskal

Services Ltd. was examined. He further informed that as per legal opinion, RBI

has no locus standii in the matter to file winding up petition against the company.

The Committee took note of the information.

28.6 Addition to the list of Vanishing Companies:

28.6.1 RDs informed that wherever the premises of vanishing companies have

been physically verified and companies were not found to be maintaining their

registered offices at the declared addresses, the proposals for addition of the

names of such companies to the l i s t of 'Vanishing Companies' are being examined

in the respective RTFs. Further course of action will be decided upon the

recommendations of the RTFs. The Committee took note of the matter.

28.7 Deletion from the l is t of Vanishing Companies

28.7.1 RD-NWR explained the proposal sent by RTF regarding deletion of the

names of following three companies from the l i s t of vanishing companies:

i) i i)

iii)

MIS Cromakem Ltd. MIS Shri Mahalaxmi Agricultural Development Ltd. MIS Girish Hotels Resorts and Health Farm Ltd.

28.7.2 It was informed by the RD that in these three cases:

(i) the proceeds of lPOs were indicated in the books of account and as such there was there was no instance of diversion or misutilisation of proceeds1 funds in these three cases;

(ii) no complaint was pending against any of the companies; and (iii) the companies have also started operations and are earning

profits.

28.7.3 RD-NWR further explained that RTF had made an unambiguous and clear

recommendation for deletion of the above mentioned three companies as per

the criterion for deletion of vanishing companies and putting the same in the

'Watch List'. After discussion, i t was decided to delete the names of the

above mentioned three companies from the list of Vanishing Companies and

place them under 'Watch List'.

(Action: CL-II Section)

28.8 Deletion of Companies from the 'Watch List':

28.8.1 RDs informed that there was no proposal for deletion of companies from

the 'Watch List'.

The meeting ended with a vote of thanks to the Chair.

Annexure-I

List of Officers who attended the meeting on 25-04-201 4

1. Shri Naved Masood, Secretary, MCA - In chair

2. Sh. M.J. Joseph, Additional Secretary, MCA

3. Shri U.C. Nahta, DII, MCA

4. Dr. Navrang Saini, RD (ER), MCA

5. Shri B.N. Harish, RD (SER), MCA -

6 . Shri S.K. Agarwal, RD (NWR), MCA

7. Shti B.K. Bansal, RD (SR), MCA

8. Shri A.K. Chaturvedi, RD (NER), MCA

9. Shri K.L. Kamboj, RD (WR), MCA

10. Shri Alok Samatrai, RD (NR), MCA

11. Ms. P. Sheela, JD, RD-NR

12. Shri K. Thirumalaimuthu, JD, RD-SR

13. Shri Amit Pradhan, RM-Northern Region Office, SEBl

14. Shri Manish Parashar, Deputy General Manager, RBI, Mumbai

15. Ms. Richa Kukreja, Joint Director, SFIO, MCA

16. Shri Sanjay Sood, DD, MCA