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Richa Mishra

New Delhi , Sept. 25

COMMITTED to taking appropriate measures to get rid of defunct companies in a time-bound manner, the Ministry of Company Affairs (MCA) has asked its officers to issue default notices to all such firms that have not made use of the Simplified Exit Scheme (SES) 2005.

SES 2005, which was in operation for seven months, gave an opportunity to defunct companies to get their names struck off the roster of the Registrar of Companies (RoCs) through a simplified procedure. The Minister for Company Affairs, Mr Prem Chand Gupta, has directed the RoCs to submit a compliance status on the action taken against such companies before the month-end.

Poor response to SES: While reviewing the outcome of the scheme, the Minister felt that despite more companies making use of SES 2005 during the last month of the scheme, the overall response was discouraging, necessitating immediate and thorough analysis.

The Minister told Business Line that appropriate measures are required to get rid of defunct companies. Out of 1.93 lakh companies identified as defunct as on April 1, 2005, less than 14 per cent have made use of the scheme. 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.

Further, there was also a wide variation in the region-wise response, which was 21.25 per cent in southern region as against only 9.87 per cent in the northern region, the Minister said. The Regional Directors have been directed to ensure a timely disposal of applications received under the scheme by the RoCs to avoid undue delay in striking off the names.

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 closure of the scheme, no cases were disposed of.

In the southern region, the number of defunct companies in Chennai and Hyderabad, as on April 1, 2005, stood 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 60 were cleared in Hyderabad.

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, and nil disposed of.

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