The case of the 78 'vanishing firms'

Written by ENS Economic Bureau | New Delhi | Updated: Sep 9 2014, 15:46pm hrs
Fraud31 firms have been identified by the SFIO where frauds have taken place.
The Serious Fraud Investigation Office (SFIO) has zeroed in on 78 companies, which have been identified as vanishing firms and after detailed investigations against them, the agency has detected frauds amounting to Rs 10,818 crore, according to the corporate affairs ministry.

To strengthen investigations against the errant firms, the SFIO has set up a Market Research and Analysis Unit (MRAU) to analyse media reports relating to frauds. A forensic lab with appropriate technology and skilled technical manpower has also been set up in the SFIO as part of MRAU. Besides, an Early Warning System is being developed that would generate alerts for analysis and early detection of potential frauds. A pilot testing has already been carried out during the year 2013-14.

Under SFIO lens

* 31 firms have been identified by the SFIO where frauds have taken place

* 238 firms were initially branded as vanishing companies which had raised funds through public issues and had stopped filing annual returns with the concerned regulators

* 128 firms out of the total, were removed from this category and placed under a Watch List, as they started filing their annual returns

* 32 firms are currently under liquidation

* 78 companies still continue to be classified as vanishing firms