Financial Daily from THE HINDU group of publications
Tuesday, Sep 20, 2005
Financial Daily from THE HINDU group of publications Tuesday, Sep 20, 2005 |
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Corporate
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Sick Units Exit scheme for defunct cos evokes good response More firms make use of the scheme's extension till August Richa Mishra
New Delhi , Sept 19 THE gamble of the Ministry of Company Affairs to extend the Simplified Exit Scheme (SES) 2005 by a month seems to have paid off, with the Government receiving a significantly higher number of applications towards the end of the scheme from those companies that are keen to get their names struck off. SES 2005, that ended on August 31, gave an opportunity to defunct companies to come forward and get their name struck off the register of the Registrar of Companies (RoCs) through a simplified procedure. As per the estimates, the total number of defunct companies as on April 1, 2005 was 1,93, 774, out of which applications from 26,483 were received, and 4,226 disposed of. About 22, 257 applications were being processed. Till June 30, just a few defunct companies had come forward to make use of the opportunity. The estimates as on June 30 showed that the total number of defunct companies was 1,51,759, of which the Ministry had received applications from only 1,682. The Ministry had approved 913 cases while 769 applications were being processed as on June 30. This scheme (SES 2005) could be called a success, as it has been able to attain a similar result in seven months than the earlier scheme (SES 2003) had achieved during the full year, sources said. During 2003, the Government had announced a similar scheme that ran from March 25, 2003 to March 31, 2004, and had received 30,582 applications of which 26,714 were approved and 3,868 rejected. SES 2005 was to come to an end on July 31 initially. On account of difficulties experienced by companies due to adverse weather conditions in different parts of the country, the Government extended the scheme till August 31. The scheme was launched on February 1. Under the SES 2005, the Ministry has been able to collect a total amount Rs 7.94 crore in the form of fee for using the scheme (Rs 3,000). The highest number of defunct companies was from Mumbai in the western region followed by Delhi in the northern region. The number of defunct companies in Mumbai as on April 1, 2005 was 40,110 out of which applications were received from 3,496. Till the date of the closure of the scheme, no cases were disposed of. Delhi accounted for 37,765, out of which applications were received from 3,260. Almost 282 applications were disposed of and 2,978 were in process. In the southern region, there was a tie between Chennai and Hyderabad, with the number of defunct companies in both the centres as on April 1, 2005, standing at 15,710. However, while 3,765 applications were received in Chennai, the number was far less in Hyderabad at 1,615. The cases cleared in Chennai were 1,624, while in Hyderabad it was 60. According to estimates in the eastern region, Kolkata accounted for 22,146 defunct companies as on April 1, 2005, out of which applications were received from 2,055.
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