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Directors and top management of deregistered companies who tried to siphon off money from the firms' bank accounts can face up to 10 years' imprisonment, the Central government said on Wednesday.

The government further mandated that the directors of these shell companies who have failed to file tax returns for three or more years would be barred from holding positions in other companies, PTI reported.

"In case the director or authorised signatory of any 'struck off' company tries to unauthorisedly siphon-off money from its bank account, he/she may attract punishment of imprisonment of not less than six months extendable to 10 years," an official release said.

The government said identification of more shell companies is in progress and efforts are on to find out the "actual beneficiaries and persons" behind such entities.

Earlier on Tuesday the Finance Ministry confirmed that it had frozen the bank accounts of 2.09 lakh suspected shell companies as part of a crackdown on illegal transactions and tax evasion.

Under the order, the owners and their nominated signatories will not be able to operate bank accounts until such companies are legally restored, the ministry said in a statement. "It is expected that as a result of this exercise, at least two to three lakh of such disqualified directors shall get debarred," the release said.

In an effort to identify the actual beneficiaries the government said the profiles of directors are being gathered by the agencies. Details such as background, antecedents and their role in the operations/functioning of shell companies are being compiled in collaboration with enforcement agencies, PTI reported.

"The professionals, chartered accountants/ company secretaries/ cost accountants associated with such shell companies and involved in illegal activities have been identified in certain cases," the agency quoted the release as saying.

Tax officials say owners of shell companies create elaborate smokescreens, including naming personal servants and chauffeurs as board directors, to obscure the ultimate beneficiaries, conceal political investment, evade tax, commit fraud or manipulate tenders.

The exercise of weeding out shell companies would not only help check the menace of black money but also promote an ecosystem of ease of doing business and enhancing investors' confidence, said PP Chaudhary, Minister of State for Corporate Affairs.

Financial status of the companies would be reflected in a true and fair manner which would minimise the possibility of frauds and tax evasion, the minister further added.

More than 13,000 shell companies were identified in August by investigation agencies following the demonetisation process initiated by the government in November last year. This comprehensive list included the 331 companies that market regulator Securities and Exchange Board of India (SEBI) had banned trading in.