In a move by ministry of corporate affairs that aims to weed out shell companies, around 1,313 companies are likely to be removed from the registrar of companies (ROC), reported Financial Express.
These companies have not filed their reports for the past two years, the paper reported on Monday.
A senior ministry official, as mentioned in the report, said that the status of most companies will be altered from “listed” to “unlisted” as it is found that despite claiming to be “listed”, in reality they are not.
“They might have sought permission from the MCA to file draft prospectuses for initial public offerings (IPOs) but did not complete the process. That is why they are categorised as ‘listed’,” the official was quoted by the paper.
In its first drive during financial year 2017-18, registrar of companies(ROCs) identified and removed the names of 2,26,166 shell companies from the register of companies, disqualifying around 3,09,619 directors.
The task force on shell companies, which was constituted in 2017, is taking pro-active and coordinated steps to tackle malpractices by shell companies or fraudulent companies.
These illegal activities could include showing transactions on paper as legitimate business transactions, which helps turn black money into white. This lets the business person avoid paying tax on the laundered money.