Loss of Rs 1381 cr due to non-holding of AGM by companies:CAG

New Delhi, Dec 17 (UNI) The Comptroller and Auditor General of India has castigated the non-recovery of fine of Rs 1,381.76 crore by Registrar of Companies (RoCs) in five states against 2,353 companies for not holding or delaying annual general meeting during 2000-01 to 2004-05.

The CAG, in its latest report, has held the Ministry of Company Affairs responsible for its failure "to perform its primary function of administering the Companies Act, 1956, especially in the area of identification of defaulting companies and launching prosecutions against them." According to the report, tabled in Parliament yesterday, test check of computerised database and manual checking of document files in the five RoCs in the five-year period from 2000-01 revealed poor monitoring and control for timely detection of non-compliance with the Act's provisions due to which 2,353 companies had either delayed or not held AGMs.

Of them, Orissa accounted for 1,960 companies (based on computerised data) where AGMs were not held and 18 cases where it was delayed up to nine years in some cases resulting in a loss of Rs 131,837 lakh, followed by Madhya Pradesh where 165 companies similarly failed to comply at a cost of Rs 1,311 lakh.

In Meghalaya, non-action against 56 non-compliant companies over a ten-year period led to losses of Rs 4,465 lakh. RoCs in Delhi and Haryana also did not initiate action against 125 companies to recover Rs 517 lakh and Rs 43 lakh from 27 defaulting companies in Uttar Pradesh.

Under the Ministry's three-tier organisational set up, the RoCs are vested with the power to prosecute the defaulting companies for their failure to file the specified returns/documents for safeguarding the interests of the shareholders/investors/depositors.

In fact, "only 58, 189, 98 and 13 prosecution cases were launched in respect of all the 22 RoCs during 2000-01, 2002-03, 2003-04 and 2004-05 respectively," the CAG noted.

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