Twenty-four hours after inspections blew the lid off 114 shell companies functioning from a small room in posh Jubilee Hills, the Registrar of Companies (ROC), Hyderabad, has begun de-registering 13,560 defaulting companies in Telangana and Andhra Pradesh. This is part of second phase of the drive to weed out briefcase firms.
In the first phase, around 15,000 companies were de-registered in both Telugu states. Defaulting firms, mostly non-starters, are those who fail to file financial statements or annual returns continuously for three years. In the first phase, around 400 chit fund companies were among those deregistered and accounts frozen.
ROC officials said, notices have been slapped on all 13,560 companies and if they fail to respond within a stipulated time-frame, they will be de-registered and their bank accounts frozen. With this, at least one-fourth of the companies in T will go defunct.
“Most of these companies are non-starters or paper companies used to circulate and take money out of the system or pump it into the system. In the first phase, more than 400 chit fund companies operating in AP and Telangana were de-registered as there is a huge public interest involved in chit fund companies,” an ROC official said.
The first phase that began in 2017 ended around January 2018. The second phase process will be completed in two to three months.
An analysis by ROC officials found many Kolkata-based shell companies were transferred to Hyderabad to escape heat from raids in eastern India. “Most of these companies function from shady premises. In first phase, we excluded companies that took loans from banks and also those who have a registered Form 8, which is about public deposits and loans. In the second phase, we are taking a re-look as banks loans may have been paid off. In such a manner, companies that have been floated for fraudulent purposes will be de-registered.”
Courtesy: Times of India