87 companies disappeared after raising funds through IPO: Govt

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SummaryThe government on Monday said as many as 87 companies remained untraced at the end of 2011-12 after having raised funds through initial public offerings.

The government on Monday said as many as 87 companies remained untraced at the end of 2011-12 after having raised funds through initial public offerings (IPOs). Responding to a question, the ministry of corporate affairs (MCA) said that there were 238 firms in the list of "vanishing companies" in the last fiscal.

"Of 238 firms, 151 companies have been traced (including 32 under liquidation) and other 87 remained untraced. As on March 31, 2012, there were 87 companies that remained untraced after having raised funds through IPO," MCA minister Sachin Pilot said in a written reply to the Rajya Sabha on Monday.

Vanishing companies are those firms which cease to file their statements of return or where, after raising capital, whereabouts of their registered office or directors are not known.

Pilot said that government has been taking action against companies and their directors that disappeared after raising money from public. He said that a central coordination and monitoring committee, co-chaired by MCA and market regulator Sebi monitors efforts to identify "vanishing companies" and take stock of action against them. The minister said that government is seeking assistance of police authorities and filing FIRs.

Besides, Pilot said that provisions in laws and rules have been made to ensure that companies raise money in a manner which is transparent, accountable and is in accordance with provision of the Companies Act and other enactments.

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