SFIO traces 116 vanishing companies

New Delhi, Aug 31: The legislative response to corporate frauds during the time of initial public offer (IPO) by a company has resulted in the Serious Fraud Investigation Office (SFIO) tracking 116 companies from 229 companies which were originally identified as vanishing companies.

The Minister of Corporate Affairs Prem Chand Gupta in a written reply in the Lok Sabha today said that the Coordination and Monitoring Committee (CMC), co-chaired by Secretary, the erstwhile Ministry of Company Affairs (MCA) and Chairman, SEBI was set up in March 1999 to settle the policy issues regarding the delinquent companies/promoters and to monitor the progress in regard to action against vanishing companies.

Out of the companies that came out with the IPOs during 1992-98, a total of 229 companies were originally identified as vanishing companies.

With the continuous efforts of CMC, 116 companies have been traced back, resulting in the number of vanishing companies being reduced to 113.

Subsequently, the task forces have also undertaken a similar exercise in respect of the companies that came out with IPOs during 1998-2001.

As a result of this exercise, nine companies have been identified as vanished. Thus, the total number of vanishing companies as of now stands at 122.
SFIO which set up in January 9, 2003 only started functioning from October one, 2003 and Mr Gupta added that the SFIO has no role to play with regard to the monitoring of action taken against vanishing companies.

UNI