Financial Daily from THE HINDU group of publications
Tuesday, Jan 17, 2006
Financial Daily from THE HINDU group of publications Tuesday, Jan 17, 2006 |
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IPOs Corporate - Regulatory Bodies & Rulings Cos planning IPOs: `SEBI can crosscheck records of RoCs' Richa Mishra
New Delhi , Jan. 16 THE Ministry of Company Affairs has suggested to the capital market regulator Securities and Exchange Board of India (SEBI) that it could crosscheck the records of the companies wanting to float an initial public offer (IPO) with the Registrar of Companies (RoCs), whenever required. The Central Coordination and Monitoring Committee (CMC), co-chaired by the SEBI Chairman and Secretary, Company Affairs, has said that SEBI could crosscheck the records of such companies with RoCs before giving its go ahead to ensure that the investors' interests are effectively protected, a Ministry official said. It was found that a number of companies, which had come out with an IPO and then vanished, had furnished a different set of records - balance sheet - with the RoCs and SEBI. While the information available with SEBI gave different numbers, the one available with the RoCs said a different story, raising doubts on the company's credentials, the official elaborated. The CMC, which met recently, felt that more coordination between the capital market regulator and the Ministry would help in protecting the investors' interests. Besides, the Ministry is implementing an e-governance project under which the identity of authorised directors and professionals is ensured in a secure manner, the official said. While declining to disclose the names of such companies, the official said, a list is being prepared and would be made available to the Serious Fraud Investigation Office (SFIO). At present, 114 companies stand identified as vanishing companies with issue size of approximately Rs 799.31 crore. Originally, 229 companies were identified as vanishing companies which came out with IPOs during the period 1992-1998, out of which 71 companies are such which came out with IPOs during 1993-95 for raising a sum of Rs 607.65 crore from the public. The Government has taken action against the vanishing companies and their promoters/directors by filing prosecutions through the RoCs under the Companies Act 1956 in respect of 107 companies out of a total of 114 vanishing companies. In addition, FIRs have also been filed in respect of 100 companies and their promoters/directors for the offences punishable under the Indian Penal Code. The CMC, which was constituted in the context of vanishing companies, has been monitoring at regular intervals issues relating to vanishing companies and their promoters and to monitor the progress of action taken against them.
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