DCA FILES CHARGE SHEETS AGAINST
VANISHING COMPANIES
The Department of
Company Affairs (DCA) has filed charge-sheets against ten fly-by-night
(vanishing) companies and their directors and promoters based
in Uttar Pradesh and Uttaranchal. These vanishing companies had
mopped up a huge amount in hundreds of crores during the boom
time in early 90s from the capital market following opening up
of Indian economy and vanished thereafter putting the investors
in deep hardships.
The first
charge sheet has been filed on May 29, 2002 in court of Special
Chief Judicial Magistrate (CJM), Agra against Vidiani Agro-tech
Industries Ltd., District Mathura (UP), followed by a charge sheet
against Rizvi Exports Ltd, Kanpur, on May 2, 2002 in the court
of Special CJM, Rich Capital & Financial Services Ltd., Kanpur
on May 13, 2002 in court of Special CJM, Kanpur, Swarnima Oil
Industries Ltd., Gautam Budh Nagar, UP on May 27, 2002 in court
of Special CJM, Meerut, Danin Leathers Ltd., Agra on May 23, 2002,
in the court of Special CJM, Agra, Sidharatha Pharchem Ltd., Moradabad
on May 17, 2002 in the court of Special CJM, Lucknow, Shefali
Papers Ltd, Saharanpur, on May 27, 2002 in the court of Special
CJM, Meerut, Raymed Labs Ltd, Saharanpur on May 27, 2002 in the
court of Special CJM, Meerut,
SRP Industries Ltd., District Varanasi on May 28, 2002 in the
court of Special CJM, Varanasi, and Vijayshree Chemicals (India)
Ltd., Mathura on June 10, 2002 in the court of Special CJM, Agra.
This
follows intensive investigations into the affairs of 229 vanishing
companies out of which 225 such companies are on the high list
of prosecutions. The DCA has been functioning in close coordination
with the Securities and Exchange Board of India (SEBI) and the
Reserve Bank of India (RBI) in this regard. A coordination committee
with Secretary, DCA and Chairman, SEBI has been functioning for
the last several years since the securities scam surfaced in early
90s. The charge sheets against other vanishing companies and their
promoters and directors will be filed as soon as the ongoing investigations
are complete.
The efforts of
the Government are intended to strengthen the confidence of investors
and protect their interests so that no companies are able to swindle
the gullible investors in future. To supplement this, the Government
has been issuing updated CD-ROM of financial profiles of companies
both registered under the Companies Act and listed with the SEBI,
which has been working as a watch list to investors, shareholders
and stake holders so that they are guarded and take all precautionary,
protective and preventive measures before any investment in such
companies.
