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