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Richa Mishra

New Delhi , April 2

PEOPLE who have lost money in vanished companies can now raise a cheer. The Finance Minister is involved in the investigation to track the progress of high value cases.

Recently, the Minister called a high-level meeting of senior Government officials and the Securities and Exchange Board of India, after which the Ministry of Company Affairs (MCA) began looking at the prospects of referring large value cases of vanishing companies to the Serious Fraud Investigation Office, so that investors can get back their money quickly.

It was decided that for the cases in which the MCA has lodged first information reports, the banking sector would co-operate fully to trace the trail of funds.

The Finance Ministry believes that action on such entities should be given publicity to restore confidence in the minds of investors.

Subsequently, at a meeting of the Coordination and Monitoring Committee, co-chaired by the MCA Secretary and the SEBI Chairman , the Ministry, in its action report, said it has filed two petitions before the Company Law Board against such companies with a view to getting back the funds fraudulently collected from the public by the promoters and directors of these companies. This was one of the suggestions made at the FM meeting.

Petitions have been filed against Nuline Glassware (India) Ltd and AVI Industries Ltd under the provisions of the company law to get back the properties and monies fraudulently obtained from the public by the promoters and directors of these vanishing companies, official sources said.

To ensure that the parties concerned have received the summons, the Ministry proposes to issue advertisements regarding the petitions initiated.

The MCA has filed prosecutions against 111 vanishing companies in various courts of law. FIRs have been launched against 92 such entities, out of which 63 have already been registered, official sources said.

The Ministry had furnished a list of the vanishing companies and their directors to the Central Board of Direct Taxes early this year.

The Finance Ministry has directed SEBI to consider treating the cases where final orders on debarment have not been passed as continuing offences and impose monetary penalties on them under the amended SEBI Act.

Similarly, end-use of funds in a manner other than that disclosed in the prospectus should be considered as violations inviting monetary penalty. Meanwhile, SEBI has passed orders against 100 vanishing companies and 378 directors debarring them from accessing the capital market.

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