Ministry of Corporate Affairs is currently probing the personal details and background of all the directors of the 2.10 lakh shell companies which were put under scrutiny.
The Ministry of Corporate Affairs has identified 106,578 directors of shell companies to be disqualified in a move to strengthen its battle against shell companies.
Earlier, the government had cancelled the registration of over 2.09 lakh shell companies which have not been carrying business activities for a long time. The Finance Ministry had also directed banks to restrict bank operations of shell company accounts.
The disqualification comes as a stern step under Section 164 2(A) of the Companies Act which states that any director violating the regulatory requirements could be subject to penalization and disqualification.
A director of a company that has not filed financial statements or annual returns for three financial years continuously would not be eligible for re- appointment in that company or any other firm for five years, the Act says.
CNBC TV18 reported that Ministry of Corporate Affairs is currently probing the personal details and background of all the directors of the 2.10 lakh shell companies which are under scrutiny.
Minister of State (MoS) PP Chaudhury is personally monitoring the probe which is enquiring instances of money laundering and matters related to black money.
Serious Fraud Investigation Office (SFIO), Registrar of Companies (ROC) and other enforcement agencies are assisting the corporate affairs ministry in the probe.
The ministry, which is implementing the companies law, has also identified professionals, chartered accountants, company secretaries and cost accountants associated with the defaulting companies.
There are about 11 lakh companies with active status after deregistration of over 2.09 lakh firms.
"The fight against black money shall be incomplete without breaking the network of shell companies. The possibility of using the shell companies for laundering the black money cannot be undermined," Minister of State for Corporate Affairs PP Chaudhary said.
He also said that the whole exercise would go a long way in creating an atmosphere of confidence and faith in the system paving the way for ease of doing business in India.(With PTI inputs)