Two lakh shell cos to have their bank accounts frozen FM

New Delhi: Finance ministry on Tuesday said that it has asked banks to restrict the operation of bank accounts of two lakh companies that have been struck off from the Register of Companies as a part of its anti-blackmoney drive.

“The department of financial services has, through the Indian Banks Association, advised all banks that they should take immediate steps to put restrictions on bank accounts of such struck off companies. A list of such companies, registrar of companies wise, has been published on the website of the ministry of corporate affairs,” said the ministry.

The government has launched a crackdown on shell companies which are allegedly used as conduits for illicit fund flows and tax evasion. Such firms exist only on paper, without any active operations. These firms had failed to file tax returns and comply with other regulatory provisions.

In addition to such struck off companies, finance ministry said banks have also been advised to go in for enhanced diligence while dealing with companies in general.  “A company even having an active status on the website of the ministry of corporate affairs but defaulting in filing of its due financial statement(s) or annual return(s) of particular of charges on its assets on the secured loan should be seen with suspicion as, prima facie, the company is not complying with its mandatory statutory obligations to file this vital information for availability to its stakeholders,” said the ministry.

Names of over 2.09 lakh firms have been struck off from register of companies for failing to comply with regulatory requirements. Finance ministry said the directors of deregistered firms would not be able to operate the bank accounts till these entities are legally restored.

“The names of 2,09,032 companies have been struck off from the register of companies under Section 248 (5) of the Act. The existing directors and authorised signatories of such companies will now become ex-directors or ex-authorised signatories,” it said.