Financial Daily from THE HINDU group of publications
Friday, Nov 19, 2004
Financial Daily from THE HINDU group of publications Friday, Nov 19, 2004 |
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Corporate
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Regulatory Bodies & Rulings Revised exit scheme for defunct companies planned Our Bureau
New Delhi , Nov. 18 THE Ministry of Company Affairs is contemplating bringing out a revised scheme for exit of non-functional or defunct companies, the Minister for Company Affairs, Mr Prem Chand Gupta, said at the Economic Editors' Conference here. In fact, earlier the Ministry had launched a Simplified Exit Scheme in March 2003, which was operational for a year. The purpose of the scheme was to provide an easy exit to small non-functional and defunct companies. However, there were not many takers for the scheme. Eventually 25,000 applications were filed and about 13,000 companies took advantage of the scheme. "It was noted that the scheme needed to be further simplified," the Minister stated. The matter was reviewed in consultation with experts and industry associations. "There are over six lakh companies out of which more or less half are defunct," the Minister said. This scheme is intended to lessen the burden on the Registrar of Companies offices. Outlining the various initiatives taken by the Government to become more corporate and investor friendly, Mr Gupta said, that to re-codify the existing company law, the Ministry had come out with a Concept Paper on Company law. The Paper, which was exposed to all stakeholders inviting their response before framing of a formal legislation, has elicited good response. To examine these responses and draft a model company law, the Ministry is setting up an expert panel to be headed by Dr J.J. Irani. Besides, Dr Irani, the panel will comprise Mr Ravi Parthasarthy, and nominees from the Public Sector Undertakings, professional institutes and industry associations. Reiterating that his Ministry was committed to investor protection, the Minister said that the Government has taken stringent action against vanishing companies. He also gave details of the initiatives taken up by the Ministry. On the computerisation programme DCA-21, which would enable the Department to offer all services to corporate sector, stakeholders and public at large by the use of information technology, Mr Gupta said that the system is expected to be fully operational by the end of 2005. Regarding the Serious Fraud Investigation Office, a body set up to investigate white collared crime, the Minister said that the Office would be strengthened further.
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