The crackdown on shell companies has gathered a lot of steam in the past 3-4 months. In the latest, the Ministry of Corporate Affairs (MCA) revealed that of the 2.24 lakh companies whose registrations were struck down, over 1.3 lakh companies did not have a permanent account number (PAN) even as they were dealing in currencies worth crores of rupees.
According to the government rule, PAN is mandatory for any transaction above Rs 50,000. And the probe by the MCA found that only 93, 000 companies of the total deregistered companies have PAN.
"The findings showed these firms did not pay taxes and made it difficult for the authorities to track their transactions. The absence of statutory filings was cited as a reason for deregistering the firms," sources told Business Standard.
The government is also probing 809 listed companies, whose records are not traceable by the capital market regulator — the Securities and Exchange Board of India (Sebi).
Sources confirmed to BS that now they are likely to examine whether all active companies which are registered with the Registrar of Companies (RoC) have PAN or not. After the last round of deregistration 11.3 lakh companies remain active with the RoC.
Earlier the MCA had identified 300,000 directors and barred them. 100 disqualified directors appealed against the government's decision in various high courts of the country.
However, sources told the business daily that number of disqualified directors could increase in future and can go well over 450,000.
Last month, the government said that over 2 lakh shell companies can face criminal action for depositing unexplained high-value notes during demonetisation or for operating bank accounts after their names were blacklisted.
According the new Companies Act, if found guilty, the firm owners can get imprisonment of three to 10 years for fraud. Moreover, a penalty can be levied on the fraudulent firm, which is equal to the value of the offence.
A task force has been formed by the Prime Minister's Office (PMO) to scrutinise and deal with deregistered companies. The task force is working with other enforcement agencies and is jointly chaired by the revenue secretary and the corporate affairs secretary.